India Will Blacklist Renewable Energy Companies for Missing Deadlines

The Union Minister of Renewable Energy & Power R.K. Singh recently made a slew of announcements in the Rajya Sabha, shining the light on the progress made in renewable energy in the country. Here is a look at some important advancements

The Union Ministry of New and Renewable Energy (MNRE) has issued an order which says that renewable energy firms could be blacklisted in case they fail to meet deadlines to complete renewable energy projects. The order states that the blacklisting will be for a period of three to five years.

India has introduced blacklisting of renewable energy companies for project completion delays for the first time.

The government will follow the due procedure: it will first issue a show cause notice to non-performing companies and then encash bank guarantees and blacklist them.

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The order for blacklisting of non-performing firms also stands in accordance with the General Financial Rules of the Central Government. It is expected to apply to all tenders henceforth.

To give a push to the solar expansion in the country, MNRE Minister RK Singh has also announced the exemption of solar projects in the country from the Approved List Of Module Manufacturers (ALMM) scheme for the next two years. That provides them the freedom to import modules, though the 40% duty will still have to be paid, even as cell imports carry a 25% duty burden.

Currently, India’s renewable energy installed base stands at nearly 168 GW gigawatts. The country has already missed its 2022 targets – mainly in solar and wind capacities – by huge margins.

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On an average the RE installation has been less than 15 GW per year.  It was largely hampered by disruptions in the supply chain due to COVID-19 led pandemic and also heavy import duties on solar equipment.

Industry sources say that the new policy of blacklisting of companies – whether domestic or international – that delay projects will have a positive impact on the renewable energy sector as a whole. The new policy will lead to greater transparency and accountability in the renewable energy sector. Other point out that this will bring clarity to the pending pipeline of projects, many of which are considered unviable due to an unanticipated rise in module costs, and more recently financing. Those developers might yet try and surrender their allotments.

The new MNRE order will encourage firms to complete the renewable energy projects in time and help India achieve its RE targets to better fight the vagaries of climate change.

The Central Government has set a target to achieve 500 GW of installed renewable energy capacity by 2030 and a speed in the completion of RE projects is imminent as the target will require India to add at least 40 GW of renewable capacity every year from here.