MNRE Acknowledges Supply Disruptions In PV Imports With Order On Dispute Resolution

It is no secret that import schedules of PV modules and even cells have been hit in recent months due to the series of disruptions in the exporting markets, especially China, and linked to that, even some of the main South East Asian exporters. With developers finally running into the delays that have been predicted, the Ministry of New and Renewable Energy (MNRE), in an order issued on November 3, has acknowledged these issues, and provided for some help to such developers. The order takes forward the earlier laid down rule to treat supply disruptions as force majeure, issued before the Covid wave started Worldwide last year. At SaurEnergy, we have already been highlighting how the situation was escalating to a stage where a holistic view will need to be taken soon on projects whose SCOD is coming up in the next 12 months at least.

For projects scheduled to be commissioned before April 1, 2022, the MNRE has empowered DRC or Dispute Resolution Commitees to look into additional extension requirements of these projects, to be approved by MNRE on a case by case basis. The order will apply to projects tendered by MNRE’s Renewable Energy Implementing Agencies (REIA’s) namely NTPC, SECI, and NHPC. A developer is supposed to first approach the relevant REIA, and in case not satisfied with the decision, they can move the DRC.

The April 1, 2022 cut off is important for now, as that is the data from which the new BCD (Basic Customs Duty) regime is to kick in, with 40% duty on modules and 25% on cell imports. While the MNRE has highlighted the extensions it has already given on account of Covid wave 1 and 2, and now the latest supply disruptions, at this stage, one has to say that even the April 1 cut off will come under severe pressure, as disruptions for the larger projects have been for a longer period, and developers facing the much higher prices currently, might actually prefer to wait it out till prices stabilise. Importantly, some additional domestic capacity will also start coming online from April and beyond in 2022, opening up new opportunities for at least some. Though pricing again will be an issue there we suspect.