Supply Disruptions from China Might Slowdown Wind Installations in India

COVID-19 is expected to cause delays in commissioning of wind projects in India due to disruptions to the supplies from China

Wind energy at one point has been the fastest growing renewable energy sector in India in terms of installed capacity. India is the world’s fourth-largest onshore wind market with a cumulative installed capacity of 38.1 GW as of 2019. However, the COVID-19 pandemic is expected to cause commissioning delays for wind projects due to disruptions to the supplies from China, according to a new analysis by analytics firm GlobalData.

However, India would consider requests for extensions and waivers over previously decided project delivery deadlines.

India announced that the COVID-19 should be considered as a case of natural calamity and a force majeure event. This gives the right to state authorities and green energy agencies, including the Solar Energy Corporation of India Limited (SECI) and NTPC, to grant developers certain time extensions to the commissioning deadlines mentioned in their contracts.

Somik Das, Senior Power Analyst at GlobalData, said “with time extension granted to developers, the government has provided relief to project developers facing shutdowns due to the COVID-19 outbreak. The pandemic has led to a lockdown due to its high contagiousness. According to the new policy, developers will be able to apply for extended construction schedules if they show evidence and documents proving that the COVID-19 pandemic is impacting their supply chains.”

With the ongoing issues caused by the pandemic across the country, there is expected to be a delay in the engineering and construction activities of projects that were due to be commissioned in the second quarter of 2020.

“Lack of viable alternatives, transit delays, and the right to invoke force majeure clauses will, in all probability, see the estimates for wind annual installations decline in 2020. Since India is sufficient in terms of turbine production, India’s expected annual wind additions would perhaps not see a drastic decline.

“However, further extension of the current COVID-19 lockdown might perhaps lead to a significant reduction in the project commissioning forecast for 2020. Like other nations, the second half of 2020 will be a critical period for the wind sector of the country,” Das concluded.