Coronavirus Update: Renewable Energy Projects Must-Run Says Indian MNRE

The Ministry of New and Renewable Energy (MNRE) has issued a notice to Discoms stating to clear their dues regularly as was being done before the lock down and the notice also states that they should continue to buy power from renewable energy producers.

According to the notice, the power ministry has recently issued instructions providing a moratorium to Discoms for making payments to electricity generating companies in the wake of the COVID-19 outbreak. Some state Discoms, however, used that order to start curtailing renewable energy power(Partially or completely) terming the prevailing situation a ‘force majeure’ condition.

The matter was examined by MNRE and it ordered that “Renewable energy generating stations have been granted ‘must-run’ status and this status of ‘must-run’ remains unchanged during the period of lockdown”

The notification also states that “Since Discoms have already been given sufficient relief and as electricity from renewable energy (RE) comprises only a minor portion of the total electricity generation in the country, the payments to RE generators be done regularly as was being done before the lockdown,”

On March 31, Indian Renewable Energy Alliance wrote to the ministry stating that the generators need a continuous flow of cash to ensure they stay afloat, keep plants running, repair any failures, buy spare parts and continue to employ a workforce and despite there being no mention of a moratorium on the payments to be made by the discoms (to renewable energy generators), some discoms are purposely misconstruing the intent to deny payments to RE generators. 

The letter also stated that “On top of that, if generation payments abruptly stop from the discoms who are buying our energy, there will be hugely negative consequences for the entire RE industry,”.

On March 30, Industry chamber FICCI also wrote to Power and Renewable Energy Minister R K Singh stating if generation payments abruptly stop from all discoms, who are buying their energy, there will be huge negative consequences for the entire RE industry, impacting their ability to operate and maintain the power plants.

Recently MNRE has issued the circular on time extension in the scheduled commissioning date of RE projects considering disruption of the supply chains due to the spread of coronavirus in China or any other country as a force majeure event. The letter states that the Renewable Energy implementing agencies may grant a suitable extension of time for projects, on account of coronavirus, based on evidence/documents produced by developers in support of their respective claims of such disruption of the supply chains due to spread of coronavirus.