RENEWABLE ENERGY

Relief to renewable energy: MNRE declares Coronavirus force majeure

In a relief to upcoming renewable energy projects worth about Rs 3.5 lakh crore, the Ministry of New and Renewable Energy (MNRE) on Friday announced that “delay on account of disruption of the supply chains due to spread of coronavirus in China or any other country” would be considered as a force majeure event.

This means project developers will not have to pay any penalty for missing commissioning deadlines, if they can prove their consignments were delayed by global restrictions on freight movements stemming from the pandemic.

Force majeure refers to unforeseeable circumstances that prevent someone from fulfilling a contract.

As on February 29, the installed renewable energy capacity was 86.8 gigawatt (GW). Further, an additional 35.1 GW is under various stages of implementation and 34.5 GW under different stages of bidding. Every GW requires investments of about Rs 5,000 crore. Solar capacity has gone up by more than 13 times to 34.4 GW since March 2014 and more than 80% of equipment has been imported, mostly from China, where panels are substantially cheaper.

Though gradually falling since the imposition of the safeguard duty in July 2018, China remained the largest source of solar cells in April-December FY20, with imports worth $1.2 billion. Overall, in the first nine months of FY20, solar equipment of $1.5 billion was imported. Total such imports in FY19 was $2.2 billion.

The government in July 2018 had imposed a 25% safeguard duty on import of solar cells from China, Malaysia and developed countries. The duty period ends in July and currently the safeguard duty stands at 15%.

Source
financial express
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