India’s government confirmed the renewable energy sector can cite force majeure over coronavirus disruption, as its wind and solar sectors face project delays that could prove the final blow to the country’s flagship 175GW target for 2022.
The country’s Ministry of New and Renewable Energy (MNRE) and its various agencies will treat delays caused by disruption to supplies from China and elsewhere as force majeure events, as it considers requests for extensions and waivers over previously-agreed project delivery deadlines, said a statement.
The move was welcomed by India’s renewable energy sector, with the solar industry in particular facing a crunch in deliveries from Chinese suppliers as it races to build projects that won capacity in auctions run by Indian government tendering body SECI. State officials are asked to adopt a similar approach.
Analysts said the move will be a relief to project developers facing fines through no fault of their own and already under pressure from the looming economic fallout from the virus in India, which has imposed a massive societal lockdown in response to a growing number of infections.
Ashish Nainan, a Mumbai-based renewable energy analyst, told Recharge the move “would definitely help the firms involved in development of capacity, which may be staring at shutdowns and stoppage of work due to coronavirus.
“This in other words should be looked upon as a stimulus for the renewable energy sector from the government. The government just wants to contain the financial burden on the industry due to coronavirus.”
As well as presenting major short-term challenges, the coronavirus disruption could be the decisive blow to India’s hopes of meeting its 2022 renewable energy goals.
India is engaged in a massive national push to deploy 60GW of wind and 100GW of solar by then to provide the bulk of its 175GW renewable energy ambition, one of the flagship policies of Prime Minister Narendra Modi. Reaching that goal had already been questioned by an array of analysts and commentators, and most recently by India’s parliamentary energy committee.
Atin Jain, an associate at analyst group BloombergNEF, told Recharge the targets were in question anyway. “India was unlikely to meet its 2022 renewable energy targets due to the challenges around land acquisition, grid unavailability, permitting, supply chain and financing of projects.
“The newly imposed lockdown in response to rising Covid-19 cases across the country will delay the engineering and construction activities of projects that were due to come online in 2Q 2020.
Jain added: “Any extension of the current lock down could lead to a significant reduction in our project commissioning forecast for 2020.”
BloombergNEF had previously said it expects 2.6GW of wind to be installed in India in 2020.