Coronavirus outbreak, which has claimed thousands of lives across continents, has virtually brought the world economy to a standstill with millions of people placed under lockdown and global supply chains thrown into disarray.
As the pandemic rages on,renewable energy sector too is taking a hit. Factory shutdowns across the world, including in China have disrupted both upstream and downstream supply chains for wind turbines and solar panels, with consequences for clean energy progress this year around the world.But disruption in supply is only part of the equation. It is being feared that as policymakers and businesses focus on short-term stimulus packages to help the economy, energy infrastructure investments and planning will temporarily go by the wayside.
While world leaders are busy taking action to contain the pandemic, only time will tell when the crisis matures and what will be its impact on the humanity as well as the economy. It is certainly a progressing story, by the minute.
Renewable Watch will be running this live tracker about the key developments in the clean energy space that may impact or influence India’s renewable energy sector.
Discoms invoke force majeure due to cash crunch during coronavirus pandemic
With demand for electricity falling due to the coronavirus-induced nationwide lockdown, many state discoms are invoking force majeure clause as allowed by their power purchase agreements (PPA) with power producers.This has led to fear among the power generating companies that discoms may default on payment.State discoms like Uttar Pradesh, Madhya Pradesh, Andhra Pradesh, Telangana, Punjab, and Haryana have already invoked the force majeure clause of their PPAs.
For instance, Andhra Pradesh has informed renewable power producers that its electricity discoms will not be able to pay renewable energyproducers as they are facing a reduction in collections due to the lockdown to contain the coronavirus outbreak. Likewise, The Punjab State Transmission Corporation Limited (PSTCL)has instructed the renewable generators to discontinue their generating facilities immediately from the Punjab State Power Corporation Limited (PSPCL) and PSTCL systems until the COVID-19 epidemic lasts.
MNRE addresses invoicing issues faced by renewable generators due to coronavirus pandemic
The Ministry of New and Renewable Energy has issued a memorandum addressing problems that domestic renewable energy generating stations are facing while invoicing for renewable energy supplied amid the COVID-19 pandemic.The MNRE said it received several notifications regarding invoicing difficulties from renewable energy generating stations in issuing physical copies of invoices under current circumstances.
For Regional Energy Accounts (REA), State Energy Accounts (SEA), and billing through Joint Meter Readings (JMR), it declared that invoices are to be issued over e-mail. It noted that due dates are to be calculated as per the terms of the power purchase agreements between the involved partiesand waived off hard copy submissions. It added that in the event a JMR could not be signed because of the lockdown, an invoice can be generated by the renewable energy developer based on the meter readings, with attached photographs of the readings or downloaded meter data.MNRE directed that alternatively, discoms could pay based on the invoice for the same period in the last year if it is lower. It, however, noted that once the lockdown ends, all power developers are expected to submit hard copies within 15 working days.
Deemed usage charge for not honouring green PPAs
The government said in a notice that discoms not honouring their power purchase agreements will be charged for ‘deemed generation.’ This move is aimed at providing relief to renewable energy producers as some of the discoms are still resorting to RE curtailment without any valid reason. Discoms that curtail the use of renewable energy will have to pay solar and wind power developers for the electricity deemed to have been generated and the only exception would be on account of issues arising due to grid safety.
3,000 MW of solar and wind energy projects face delays due to coronavirus lockdown
India could face over 21.6 per cent or 3 GW of solar PV and wind power installations being delayed as a result of the country’s lockdown, according to Wood Mackenzie.Indian states like Gujarat, Rajasthan, Karnataka and Tamil Nadu, which have the highest coronavirus infection rates, also correspond with the areas that are favourable to wind and solar development. The research and consultancy firm said in a statement the timing of the lockdown is unfortunate as the first quarter is typically one of the busiest periods for wind project installations.With over 3 GW of wind projects under construction scheduled for 2020 completion, supply and labour disruptions from the current lockdown could delay 400MW into 2021, equating to a downgrade of 11 per cent for 2020.
Similar to the wind sector, India’s solar PV installations are expected to be hit hard as the industry is dependent on Chinese PV module imports for 80 per cent of total requirements which has been disrupted due to the coronavirus. The firm remains cautious on the outlook for the second half of the year as supply and logistics bottlenecks linger. Consequently, its full year downgrade stands at 2.9 GW, a 24.8 per cent reduction resulting in a revised 2020 outlook of 8.9 GW of solar PV installations.
CERC defers real-time power market implementation to June 2020 amid COVID-19 lockdown
Amid the COVID-19 outbreak in India, the Central Electricity Regulatory Commission has decided to defer implementing the real-time power market (RPM) until June 1, 2020.It was scheduled to start from April 1, 2020. However, due to the COVID-19 outbreak, necessary trials could not be completed, and the date had to be postponed.CERC amended three regulations – the Indian Electricity Grid Code Regulations, Power Market Regulations, and Open Access in Inter-State Transmission Regulations to introduce the framework of real-time markets.
Manufacturers need extension for ALMM as solar industry copes with coronavirus
The Ministry of New and Renewable Energy’s decision to mandate the implementation of the approved list of models and manufacturers (ALMM) for government projects starting March 31, 2020, may not be feasible, say several solar module manufacturers.The industry has written to the MNRE asking for the implementation of ALMM to be extended to at least June 30, 2021, citing the ongoing Coronavirus pandemic, among other issues. Many manufacturers are unhappy with certain conditions like fee structure and range of power wattage and have started to back out of the ALMM process.
Wind turbine firms close Spanish factories as coronavirus restrictions tighten
Europe’s largest wind turbine makers have had to shut down factories in Spain, a major hub for the continent’s renewables sector, in response to an almost total lockdown in the country to contain the coronavirus outbreak.Denmark’s Vestas has suspended production at its two Spanish plants, a spokesman told Reuters, adding that its service and maintenance business was still working. Vestas has also paused manufacturing and construction in India, which is under a nationwide lockdown too, he said.Top rival Siemens Gamesa suspended production at six Spanish factories on Monday, bringing total closures there to eight, a spokeswoman said.
Ministry issues clarification regarding payments to renewable energy generators
In a new notification released by the Ministry of New and Renewable Energy, renewable energy generators have been provided ‘must run’ status during the course of the COVID-19 lockdown.Furthermore, considering the ‘small contribution of renewable power producers’ to the total power mix, discoms have also been told to continue the regular payments cycle due to renewable energy producers, as existed before the lockdown. This was done in response to state discoms in Punjab,Andhra Pradesh, Uttar Pradesh and Madhya Pradesh serving notices on their renewable energy generators to curtail production, and for expressing an inability to pay them.
SECI asks discoms to allow digital invoices amidst coronavirus lockdown
With the country under lockdown due to the COVID-19 pandemic, the Solar Energy Corporation of India (SECI) has requested all state discoms and agencies to allow submission of invoices digitally. According to SECI, the submission of digital invoices will make it feasible to release the payment to developers, making their projects sustainable. SECI’s office is closed until the lockdown period due to which it is not viable for power developers to submit the energy invoices in SECI’s office, and similarly SECI cannot raise the hard copy of the invoice of its buying utilities. Since SECI is a trading agency and its income is limited to the trading margin, it cannot make payments against invoices without disbursements by utilities buying power even though they are consuming the energy generated.
SBI raises $100 million via green bonds amid COVID-19 scare
The State Bank of India has raised $100 million via dedicated bonds despite challenges in global financial markets, charred by COVID19 outbreak. The transaction reinforces that investors still bet on sovereign-backed issuances from emerging markets like India. Japan-headquartered MUFG Securities has solely helped the lender for this issuance. The proceeds will be used to fund non-convention energy sector. This is the third set of green bonds the government-backed bank offered. The bonds will be issued through SBI’s London branch on the last day of the financial year and will be listed on the Singapore’s stock exchange – SGX. Rating company Fitch graded the issuance with BBB- on par with New Delhi’s sovereign issuance. The bond sale is supposed to be the first green issuance by a public sector bank in the financial year that ended on March 31, 2020.
Discoms get three months for payment to ensure 24×7 power supply
The union government has approved a financial relief package for the power sector, that entails a three-month moratorium on state owned discoms to make payments for the electricity bought by themand reducing the payment security amount by half for future power purchases. These measures including waiving penalty for late payments, are part of the government’s efforts to ensure round-the-clock electricity supply during the three-week long countrywide lockdown to prevent the spread of coronavirus pandemic.CPSU generation or transmission Companies will continue supply or transmission of electricity even to discoms which have large outstanding dues to the generation ortransmission companies. During the present emergency there will be no curtailment of supply to any discom.
Within ten days, 26 per cent fall in India’s energy consumption
In a significant development, India’s daily power consumption has suffered a 26 per cent fall in less than ten days since March 18, 2020. The fall, captured in official data released by Power System Operation Corporation (POSOCO), is attributed to the slump in the economic activity in the wake of the Coronavirus outbreak.The drop has already pulled spot power prices to the lowest level in more than two years and could spell further financial troubles for the ailing discoms.
Data released by POSOCO, showed the country’s overall energy consumption dropped from 3,586 GWh on March 18 to 2,652 GWh on March 26. The percentage fall in daily energy consumption itself has grown from 15 per cent to 26 per cent during this period.Data also shows the steepest decline in consumption was recorded in the Western region where it fell 35 per cent to 771 GWh on March 26 as compared to 1,187 GWh on March 18. The region houses a bulk of India’s industrial activity spread across states like Gujarat and Maharashtra.
Scatec Solar to put off dividend payout amid COVID-19 market weakening
Norway’s Scatec Solar ASA (said its board of directors will propose to delay a planned dividend allocation due to the weakened capital market conditions in the wake of the COVID-19 crisis.The solar developer and power producer said in a bourse filing on Thursday it will seek approval to distribute the dividend payout of $0.10per share “at a later stage” when the situation in the capital markets has improved.The move is intended to help the company keep its financial flexibility.In line with the same goal, Scatec Solar announced it has secured $165 million in debt so as to reduce funding cost and support growth.
Earlier this week, Scatec Solar announced that it is still too early to determine the impact of the coronavirus outbreak but added that travel constraints and local regulations have started to impact construction, commissioning and testing of some of its solar farms.
MNRE Extends Deadline for All Renewable Projects Under Construction
All renewable energy projects currently under implementation will be given an extension of time in light of the ongoing lockdown due to the Covid-19 pandemic, tweeted Anand Kumar, Secretary Ministry of New and Renewable Energy.The duration of the lockdown and the time required to remobilize the workforce will also be taken into consideration while granting the extension, according to his tweet. The announcement was made in light of the Prime Minister of India’s recent declaration of the 21-day nationwide lockdown to contain the spread of the novel coronavirus.
Industries, including the renewable energy sector, could potentially be hit hard by this lockdown as supply chains get disrupted due to the restrictions in movement.Renewable energy projects are also under stress because of the lack of manpower. Although power has been declared as an “essential” activity, power projects are only allowed to operate with minimum manpower.
MNRE asks states to allow free movement of material and engineers
A Ministry of New and Renewable Energy notification to the state authorities has mentioned that power generation (including renewable power generation) is an essential service for securing smooth and uninterrupted power flow across and within states. There is a need to ensure uninterrupted power supply in the current scenario of COVID-19 outbreak and nationwide lockdown. Besides allowing permission for staff, vehicles and associated workforce to move around, the ministry has 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”.
COVID-19 has ‘no material impact’ so far on ENEL’s renewables supply chain
Enel Group has sought to downplay the potential effects of the COVID-19 crisis on its growth plans for 2020, a year when it could add almost a third of its 14GW-plus green energy target by 2022.In its financial results, the Italian energy giant said the virus currently poses “no material disruption” to its renewable project supply chain. Deployment, the firm said, remains so far “in line with target”.At more than 35,300 people, over half of Enel’s global workforce is now working remotely, with COVID-19 concerns forcing operational changes after a year when the firm increased revenue by 6.3 per cent to $86.2 billionand EBITDA by 8.3 per cent to $19 billion.In its financial results, Enel claimed green energy generation was its “main growth driver” last year. Going forward, and as already announced last November, Enel intends to add a fresh 14.1GW of renewables by 2022. The lion’s share will be fleet decarbonisation in Italy, Spain and Chile (5.4GW) and PPA-backed green energy developments in Brazil and the US (5.1GW).
Govt allows renewable energy supply chain disruption to be treated as Force Majeure
The government on directed all the renewable energy implementing agencies under the Ministry of New & Renewable Energy (MNRE) to treat delay on account of disruption of the supply chains due to spread of coronavirus in China or any other country, as Force Majeure.These implementing agencies may grant suitable extension of time for projects, on account of coronavirus, based on evidences or documents produced by developers in support of their respective claims of such disruption of the supply chains. MNRE has asked all project developers claiming disruption and desirous of time extensions to make a formal application to SECI or NTPC or other implementing agencies, giving all documentary evidence in support of their claim. The implementing agencies have also been asked to ensure that no double relief is granted due to overlapping periods of time extension granted for reasons eligible for such relief.
Sterling and Wilson Solar set to execute orders worth Rs 130 billion despite coronavirus, debt
Sterling and Wilson Solar (SWSL), a Shapoorji Pallonji group company, is set to execute its order book, which is valued at Rs 130 billion, despite the delay in shipping of solar panels from China and forthcoming debt repayments.In November, the promoters of failed to honour their repayment commitments and sought more time from the company’s board to repay loans worth Rs 23,410 million. They repaid Rs 10,000 billion in December 2019 and proposed to facilitate entire repayments of balance loan amounts in phases by September 2020. Almost 90 per cent of the company’s solar panels procurement is from China. While the company’s solar procurements from China have been affected because of the coronavirus outbreak, but the company is positive deliveries will happen on time and will not severely affect project schedules.
Canadian Solar reports limited impact from Covid-19
Canadian Solar, a leading solar PV module manufacturer, has stated limited impact of the Covid-19 outbreak on its production facilities. The company, which has almost 73 per cent of its manufacturing capability located in China, had faced severe disruptions from mid-January by way of capacity loss amid the Covid-19 carnage. However, Canadian Solar’s manufacturing subsidiaries in China are located in Changshu, Jiangsu province, which has not been seriously impacted by the Covid-19 outbreak, hence were able to resume the production post extended Chinese New Year holidays. Canadian Solar stated that the impact on its delivery schedule is mostly limited to the capacity loss in the last week of January and the first ten days of February. Since mid-February production has been restarted and, the company is now settled to make up for the lost production.
Windergy India 2020 postponed due to COVID-19
Due to the evolving public health concerns and travel advisories around COVID-19, WINDERGY India 2020, scheduled to be held from 28-30 April 2020 is currently postponed. The organisers, Indian Wind Turbine Manufacturers Association (IWTMA) and PDA Trade Fairs Pvt Ltd believe, this is the best option to prioritise the stakeholders’ health and safety. The new dates are yet o be announced.
JinkoSolar expects no “material’’ COVID-19 impact in 2020 after record 2019
JinkoSolar believes it could take shipments past the 20GW mark in 2020 after breaking financial and operational records last year, amid claims that COVID-19 will not “materially” hurt its business.Over Q1 2020 alone, the company expects $1.00-1.08 billion in revenues, gross profit margins of 19-21 per cent – up from 18.2 per cent in Q42019 and 18.3 per cent in FY 2019 – and shipments of 3.4-3.7GW. The firm continues to believe it will end this year with shipments of 18-20GW, nearly all of which are likely to be high-efficiency mono products.
BNEF lowers 2020 global PV outlook due to coronavirus concerns
BloombergNEF (BNEF) published its outlook for the solar PV industry, as the world braces for a global economic downturn due to the coronavirus outbreak. But while stocks and oil prices are already falling, the full extent of the unfolding crisis is still not clear.BNEF reports that production of PV components is starting to resume in China. This could alleviate pressure on supplies of key components and equipment. However, there will be shortages in the short term.The current situation in China has shown that the value chain for renewable energy needs to be regionally diversified, says BNEF. More production facilities are also needed in Asia, Europe and the United States – especially for batteries.BNEF’s revised forecast suggests that the global PV market could be poised for a significant contraction this year.
Tariff ceilings and COVID-19 worries haunt 500MW solar tender in Gujarat
Indian utility Gujarat Urja Vikas Nigam Ltd (GUVNL) has garnered just 430MW of submissions in its latest 500MW solar tender.Tata Power, Juniper Green and Vena Energy were the only firms to submit bids under the tender, resulting in undersubscription. A reverse auction was due for March 16, 2020. The tender had a low ceiling tariff of Rs 2.65 per kWh, despite an order from the Ministry of New and Renewable Energy directing state utilities and central agencies not to include upper ceiling tariffs in future renewable energy auctions. The low ceiling tariff combined with the uncertainties due to COVID-19 are believed to be responsible for the lukewarm response.
Taiwan and India extending PV power project completion dates as COVID-19 impacts
Taiwan has extended PV power project completion dates as a result of component shortages caused by the COVID-19 outbreak in China. Taiwan’s Ministry of Economic Affairs said that PV power plant projects nearing completion would be granted a two-month extension, due to component shortages coming from China.The extensions apply to earlier 2019 projects to June 2020 and later 2019 projects to August 2020.Chinese PV trade bodies have already requested a similar policy be adopted in China. Reports also suggest that India’s Ministry of New and Renewable Energy is expected to announce extensions for completions dates of PV power plants, again due to components coming from China.
Indian government declares coronavirus a force majeure
India’s Ministry of Finance has declared solar project developers who miss contractual obligation deadlines because of coronavirus-prompted supply chain disruption can invoke force majeure clauses to avoid financial penalties.The announcement came after the lobby group, the National Solar Energy Federation of India, wrote to the Ministry of New and Renewable Energy to request the extension of scheduled commissioning dates for affected projects to help Indian developers cope with delayed deliveries and component shortages due to the virus outbreak in China.
Solar panel maker LONGi Group announces production will be back on track soon
LONGi Group, a major global solar technology provider based in Shannxi Province, China, today announced there has only been a limited impact on operation due to Coronavirus outbreak and the production will be on track soon.The company said in a statement some of LONGi’s production bases have started production while other manufacturing facilities will resume work in line with regulations. The company says that as the production capacity for monocrystalline cells and modules enjoy a certain level of flexibility, production will accelerate when the virus outbreak is over.
India mulls solar project deadline extensions to help with coronavirus delay
India is considering extending solar commissioning deadlines in order to counter the disruption caused by the coronavirus on Chinese solar imports, Anand Kumar, Secretary, Ministry of New and Renewable Energy said. A Crisil report warned that 3GW of solar projects worth Rs 160 billionare at risk of incurring penalties for missing their scheduled commercial operation date. Anand Kumar told media that the government would consider loosening schedules ifdevelopers can prove shipment delays due to the virus.India sources 80 per cent of its solar modules from China, where supply chains, manufacturing processes and transportation have been ruptured as the country deals with the virus outbreak.
Tongwei investing $2.86 billion in new 30GW solar cell manufacturing hub in China
Major polysilicon and merchant solar cell manufacturer, Tongwei Group and subsidiary Tongwei Solar are to significantly increase high-purity polysilicon production and high-efficiency solar cell production over the next five years.Tongwei said that a new 30GW solar cell manufacturing hub in Jintang County, Chengdu, China would be built over a five-year period at an estimated cost of $2.86 billion and be built on 600 acres of land.The first phase of the 7.5GW solar cell project would be started before March 2020 and is expected to be completed during 2021. Phase two will bring the new cell capacity to a total of 15GW.Tongwei expects to reach a cell capacity of 60GW in 2022 and could expand capacity to between 80GW to 100GW in 2023, subject to demand.