Power minister warns developers against delayed projects in India

RE

Three months after the government issued an order warning developers against any delay in renewable energy projects, Union Minister for power RK Singh on May 25 said failing to meet the Scheduled Commercial Operation Date (SCOD) would attract a ban of one year from any further bidding processes and defaulting the second time would lead to a ban for a period of five years.

Speaking at a conference of the Confederation of Indian Industry (CII) held in New Delhi, Singh said India is the next big market for renewable energy after China due to the exponential growth in demand.

However, he said, capacity addition has been full of challenges and added that India currently has nearly 50,000 megawatts (MW) of capacity which bidders are "sitting on".

"Businesses think if there is a bid, they must grab as much as possible. If the rates are not favourable or profits are not 25-30 percent, then they just put the project on hold. That will not work. I have nearly 50,000 MW of capacity for which people have won bids and are sitting on it," Singh said.

On February 15, the government issued an order stating that if any renewable energy project is not completed by the prescribed date of completion, then its bank guarantee would be encashed and the developer blacklisted for a period of three to five years after asking him/her to show cause.

The government has been imposing a basic customs duty (BCD) of 40 percent on any import of solar PV modules and 25 percent on the import of solar PV cells since April 1, 2022. The imposition of BCD affected solar projects of about 26,000 MW because of which on December 29 last year, MNRE said the projects for which bids were submitted before March 9, 2021, will be given the time for completion of the project up to March 2024.

But on May 1, the central government came out with a clarification that an extension of the timeline for the completion of solar or hybrid projects for which bids were finalised before the announcement of the BCD on modules may not be given to all the affected project developers. Projects, where the government finds that measures taken by the developer towards its implementation were inadequate, will be cancelled, it said.

Chasing an ambitious target of having 500 gigawatts (GW) of renewable energy (RE) capacity by 2030, the government on April 25 this year released a detailed agency-wise break-up on inviting bids for RE projects totalling 50 GW for 2023-24.

India's current total renewable energy capacity, excluding large hydro and nuclear plants, was 125 GW (125,159.81 MW) till March 2023, the latest report by the Central Electricity Authority (CEA) showed. At present, RE has a share of 26.53 percent of the total installed generation capacity in the country.