Solar projects reprieved as Indian government declares coronavirus a force majeure

Share

India’s Ministry of Finance has declared solar project developers who miss contractual obligation deadlines because of coronavirus-prompted supply chain disruption can invoke force majeure clauses to avoid financial penalties.

The announcement came after lobby group the National Solar Energy Federation of India (NSEFI) wrote to the Ministry of New and Renewable Energy (MNRE) to request the extension of scheduled commissioning dates for affected projects to help Indian developers cope with delayed deliveries and component shortages as the virus continued to rage in China. The worldometers.info website this evening stated the global death toll from coronavirus had reached 2,629.

Subrahmanyam Pulipaka, chief executive of NSEFI, welcomed the announcement by the government of relief for PV developers, stating: “We, at NSEFI, are happy that our concern has been addressed on a timely basis.”

Impact

The lobby group has estimated around 4 GW of solar generation capacity is set to be affected in India by delayed deliveries from China.

“Developers have already entered into contracts with suppliers, especially for near-term projects which are scheduled for commissioning in FY 21 [2020-21],” stated NSEFI in its letter to the MNRE. “Such suppliers have started notifying developers on the delivery delays due to the current situation in China. Further, as of now it is unknown when normal operations will resume. Events like these qualify for force majeure, and the affected projects should be granted [extensions].

“As India imports [the] bulk of its solar module and inverter requirements from China, severe implications on the Indian solar industry are inevitable. Solar projects using domestic modules will also be impacted, as India imports a significant part of [its] wafer, cell, and other module raw material [requirements] as well.”

Request

The lobby group also sought extensions to commissioning dates for long-term, open access solar projects.

“[A] majority of these stated projects are ISTS [interstate transmission system] connected, therefore delay in commissioning of these projects will also result in [the levying] of transmission charges and POC [point of connection] charges by [the] Power Grid Corporation of India, due to operationalization of long-term open access [projects],” warned the solar body, if such projects were not given a reprieve on commissioning deadlines.