Giving relief to solar developers amid the Covid-19 crisis, the Ministry of New and Renewable Energy (MNRE), in its latest notification, has stated that the renewable energy projects having their commissioning dates on or after April 1, 2021, can claim extension owing to the second surge of the Covid-19 pandemic. MNRE has, however, cautioned developers that the time extension should not be used as a ground for the termination of the power purchase agreement (PPA) or claiming any increase in the project cost, including interest during construction or upward revision of tariff.
The Ministry made it clear that the actual quantum of the time extension will be decided in due course depending on the developments related to the Covid-19 pandemic in the coming weeks.
Also, the Ministry clarified that on receipt of an application for the time extension, the implementing agency would not initiate any coercive action on the project to recover penalty on delayed commissioning until the extended time frame is decided upon.
Once the project is granted an extension, the intermediate milestones of the project will also be extended as per the leeway granted. The developer should pass on the benefits of the extended deadline to other stakeholders down the value chain, including engineering, procurement, and construction contractors, material and equipment supplier, and original equipment manufacturers.
The Ministry took this decision based on the resurgence of the Covid-19 pandemic and the lockdown measures being put in place by several state governments in localized fashions to contain the pandemic.
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.
MNRE had also issued a notification denying requests for another five-month extension for commissioning renewable energy projects, stating that these extensions would not be granted routinely from now on.
Again, MNRE clarified that the extension provided by implementing agencies on account of the first wave of the Covid-19 pandemic should in no case be more than six months, including the five-month blanket extension given earlier. The Ministry said that if the implementing agencies felt the need for an extension beyond six months, they should make a reference for consideration of MNRE with due justification and supporting documents.
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Rakesh is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). More articles from Rakesh Ranjan.