Published 16:13 IST, February 17th 2020
Solar projects at risk of missing deadlines, facing penalties due to coronavirus outbreak:Crisil
As many as 3 GW of solar projects worth Rs 16,000 crore could be at risk of penalties for missing their respective scheduled commercial operation date (SCOD) if the impact of novel coronavirus on trade with China prolongs, says Crisil
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As many as 3 GW of solar projects worth Rs 16,000 crore could be at risk of penalties for missing ir respective scheduled commercial operation date (SCOD) if impact of vel coronavirus on tre with China prolongs, says Crisil. According to ratings ncy, n-herence to completion of timelines attracts penalties, including downward renegotiation of tariffs, as per standards of PPAs.
India imports nearly 80 per cent of its solar modules from China, where tre has been impacted due to measures implemented to combat spre of virus. clampdown has forced several manufacturers to run ir plants at low utilisation, or to stall operations altoger.
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Besides, modules alrey manufactured are facing delays in transit to project sites on account of precautionary restrictions on transit at ports, it said. "This puts at risk around 3 GW of solar projects worth Rs 16,000 crore, auctioned between July and August, 2018, which need to meet ir SCODs by July 2020," Crisil's Senior Director Manish Gupta said.
He furr said given orders for modules are typically placed with a le time of six months from SCOD, se projects are w in process of eir placing orders or receiving delivery of modules and any delay at this st can prove costly. Crisil, however, ted that to meet commissioning timelines, developers may choose to implement projects with more expensive modules sourced from locations or than China.
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"But this could erode returns as modules may be 15-20 per cent costlier, shaving as much as three percent points off ir returns. Also, developers can invoke 'force majeure' clause in PPA under which y can seek relief under unforeseen and uncontrollable events. However, this is yet to be tested and may face legal and regulatory hurdles," Gupta ded.
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16:13 IST, February 17th 2020