India to blacklist renewable firms for missing project deadlines

By Sarita Chaganti Singh

NEW DELHI (Reuters) -India will exclude renewable power companies from government contracts for between three and five years if they do not meet project completion deadlines, a government order seen by Reuters shows, as the country looks to speed up green power projects.

“If any renewable energy project is not completed by the prescribed date of completion, then its bank guarantee should be encashed and the developer blacklisted after asking to show cause,” the order issued by the new and renewable energy ministry said.

The blacklisting will be for a period of three to five years, the order issued on Wednesday said.

The ministry did not immediately respond to queries about the policy sent by Reuters.

So far India has not blacklisted any company from renewable energy generation contracts for delays, but the government order said the blacklisting was in accordance with the government’s General Financial Rules and would apply to all tenders.

India needs to install more than 40 gigawatts of capacity annually – about 2.5 times the rate of addition in 2022 – to achieve its commitment to increase its non-fossil fuel capacity to 500 gigawatts by 2030.

Renewable energy installations have been hit by disruptions in equipment supply in recent months, due to heavy import duties on solar equipment, industry officials say.

As a result of the pandemic, the ministry allowed several extensions, most recently an order in December 2022 which granted a one-year extension to March 2024 year for the completion of various projects.

The country had set a target to achieve 175 GW in renewable energy capacity by 2022 but failed to meet that objective. Green energy capacity currently stands at 121.55 GW, government data show.

Big hydro projects make up 46.85 GW of the total while nuclear makes up 6.78 GW of total capacity of 411.65 GW including thermal, the data show.

The energy-hungry country’s thermal capacity – which includes coal and gas-fired generators – accounts for 236.47 GW, or 57.4% of total installations.

(Additional reporting by Sudarshan Varadhan in Singapore; Editing by Barbara Lewis and David Holmes)