Relief to Renewable Power Sector due to COVID-19

The GoI had, in view of the COVID-19 pandemic, provided a moratorium period to the power distribution companies (‘DISCOMs’) in relation to payments to be made to power generating companies. Some of these policy directives and decisions of the Government were being interpreted by some of the DISCOMs to mean that on account of the COVID-19 pandemic, such DISCOMs were excused from sourcing power from the renewable power projects and making payments to the renewable power producers. In this context, the Ministry of New & Renewable Energy, GoI by its office memorandum dated April 1, 2020, has clarified that: (a) all renewable power projects have been granted “must run” status and such status would not change even during the period of lockdown pursuant to the COVID-19 pandemic. Effectively, DISCOMs are required to continue sourcing power from the renewable power projects even during the lockdown; and (b) the DISCOMs have to make payment to the renewable power producers on a regular basis, as was being done prior to the lockdown.

Since the instructions of the Ministry of New & Renewable Energy may not be mandatorily binding on the DISCOMs, the actual effect/ implementation of the above clarifications is yet to be seen.