Renewable Energy Gets A Curfew Pass For Lockdown, Gives Guarded Welcome

The notification by the MNRE (Ministry of New and Renewable Energy) that requested states to consider renewable energy as an essential service has come as a reassuring show of support for the sector. The MNRE notification, issued yesterday, told states to allow movement of material and personnel to ensure continuous renewable power generation.

“Power generation (including renewable power generation) is an essential service for securing smooth and uninterrupted power flow across and within states ,” the ministry said in a notification addressed to concerned authorities of all states. There is a need to ensure uninterrupted power supply in the current scenario of Covid-19 outbreak and nationwide lockdown, it said.

Besides allowing permission for staff, vehicles and associated workforce to move around, the ministry also asked states for a waiver under Section 144, nationwide lockdown, curfew or any other limitation on a “number of people to gather in locations like sites, substations, transmission lines and towers etc. and other related locations where it may be required for operation and maintenance activities of renewable power generation and associated equipment”. Importantly, it seems to indicate support for existing, functioning projects. Not projects under construction, which have been given a time extension.

However, with the widely reported  disruptions already experienced by other services with similar exemptions, it  remains to be seen exactly how well this unfolds on the ground.  While some key developers welcomed the move for its intent, others were not so sure about the benefits instantly.

” We need to first consider the impact of the lockdown on the workforce, its availability and logistics, before we focus on the project completion dates”, said one leading developer.

Key leaders like Saibaba Vutukuri, CEO, Vikram Solar, have gone on record saying that the indusry faces a very tough time with all these disruptions.  He had pointed out that even domestic manufacturers source components from China, and despite resumption of production in China, the new disruptions in Indian ports and logistics would have an impact.

Other developers actually expressed doubts if this will really help, beyond the optics. He pointed out that despite clear communication on issues like the impact of GST when it came in, multiple contracts did get into trouble, and had to be settled by state, national and tribunals like APTEL. ” All these announced measures, like treating Coronavirus as a Force Majeure, or renewable energy generation  as an essential service , will only work if followed by clear guidelines on the ground. Otherwise, it backfires, with discoms or trading agencies pointing to these to pressure us to deliver on time, irrespective of actual ground realities”.

Another developer pointed out that this will become more valuable should lockdown period be extended beyond April 14, as is being widely expected.

It’s a point well made, and going by past experience, we are not very optimistic that these timely notifications and clarifications will ensure little involvement of the courts, as these projects in the pipeline that are impacted get closer to completion. In fact, the current crisis could well be a test of the robustness of PPA’s signed between parties again, considering the issues at two ends. Demand contraction in energy  as well as project delays for ongoing projects. Both issues have been tricky in the past, and discoms have not exactly been bothered about the interests of renewable energy producers, when it comes to low demand at least.