As India struggles with the Covid-19 outbreak and the resulting 21-day lockdown, the government has taken measures to insulate the renewable energy sector as much as possible.
India imposed a 21-day lockdown on the 25th of March. The lockdown immediately resulted in a sharp decline in power demand as all commercial and industrial activity ceased. A number of thermal power plants had to be shut down so as to match demand with supply.
With the decline in the share of predictable and controllable power generation in the grid, there are apprehensions about the impact of increased share of unpredictable and intermittent renewable energy generation on the grid. Anticipating possible curtailment by various states the Ministry of New and Renewable Energy (MNRE) reiterated the must-run status accorded to renewable energy projects.
Must-run status means that electricity retailers are obligated to buy all electricity generated from renewable energy projects irrespective of the cost or other parameters.
A number of power retailers are looking to delay payment to power generators for the next few months as they have extended concessions to consumers to delay payment of electricity bills. In this regard, MNRE has ordered that payments to renewable energy generators should not be stopped.
Another relief extended to renewable energy project developers is an extension of commissioning deadlines. Developers with projects under construction shall be allowed to use the force majeure clause to seek an extension of commissioning deadlines. This decision is crucial because a large majority of Indian projects are dependent on Chinese solar modules.
Immediately after the announcement of nation-wide lockdown on the 25th of March, the government clarified that essential services will continue without any stoppage. Electricity generation, including from renewable energy projects, was also identified as an essential service.
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