India’s Ministry of New and Renewable Energy (MNRE), in its latest notification, has granted an extension of two and half months (75 days) for projects with commissioning dates between April 1 and June 15, 2021.
This is a move that will provide a much-needed relief to renewable developers amid the second surge of Covid-19 pandemic.
The Ministry noted that the step has been taken to provide relief to renewable developers dealing with the lockdown restrictions imposed by various state governments due to the second surge of the Covid-19 pandemic, which would expectedly result in project commissioning delays for solar projects.
Earlier in the year, the solar industry body National Solar Energy Federation of India (NSEFI), had requested for a three-month blanket extension over-scheduled commissioning date and for financial closure on the execution of the current projects until a stability in module prices and steel prices were observed.
In May 2021, MNRE had issued a notification that renewable energy projects with commissioning dates on or after April 1, 2021, could claim extension owing to the second surge of the Covid-19 pandemic.
However, MNRE had cautioned developers that the time extension should not be used as a ground for the termination of the power purchase agreement or claiming any increase in the project cost, including interest during construction or upward revision of the tariff.
The Ministry had also added that once the project was granted an extension, the intermediate milestones of the project would also be extended as per the leeway granted.
It is also expected that developer should pass on the benefits of the extended deadline to other stakeholders down the value chain, including engineering, procurement, construction contractors, material and equipment supplier, and original equipment manufacturers.
Last year, during the Covid-19 outbreak and the subsequent lockdown, the Ministry had issued a notification, stating that all under-development renewable projects would be given an extension of five months. The extension applied from March 25, 2020, to August 24, 2020.
In March this year, MNRE clarified that the extension provided by implementing agencies on account of the Covid-19 pandemic should in no case be more than six months, including the five-month blanket extension given earlier.
Recently, the Ministry of Power also granted an extension of three months to all interstate transmission projects under construction, with the scheduled commercial operation date (SCOD) falling after April 1, 2021, hit by the resurgence of the Covid-19 pandemic. Based on the completion of the transmission line whose SCOD has been extended by three months, the commencement date of long-term access provided to the generator by the central transmission utility will also be extended by three months.