Fresh Covid Guidelines: RE Projects Allowed From April 20

The renewable energy industry, especially utility-scale solar and wind energy projects, received a small relief, in the form of permission to restart construction work on ongoing projects, as well as fresh projects possibly, from April 20 onwards. In an order dated April 15, signed by the Union Home Secretary, the order laid down the new rules of engagement for managing under the lockdown in force. The lockdown had been extended to May 3 earlier by the Prime Minister in his speech to the nation on April 14.

The big ray of hope had been the promise to re-look conditions from April 20, based on a strict evaluation of district wise status and compliance with instructions issued by the government earlier.

However, it remains to be seen how many firms can actually take advantage of this opening up, and restart operations. Multiple issues are involved, from mustering workforce for projects, to moving equipment or fresh supplies to project sites. In that respect, the allowance of movement for all cargo goods now, as compared to essential goods as defined by the government earlier will come as a relief too. Rooftop solar, of course, remains in limbo, as even the fresh allowances make it virtually impossible to meet all conditions for work inside cities and establishments.

EPC Firms might also struggle with cash flow issues, as they have gone almost a month without any work progressing, and many firms are paid on reaching project milestones.

Other operating conditions laid down for working under the new lockdown regime could also add to costs, and become a bone of contention between developers and EPC’s, according to industry sources. These range from a one hour break between shifts, to staggering lunch hours, to regular disinfectant use on-site and on equipment used, besides mandatory thermal scanning of workers, mandatory health insurance of all workers involved, easy access to sanitisers, and if possible, even gatherings of groups of people over 10. Even where allowed, social distancing norms have to be followed at all times. Strict compliance with all these conditions, while not impossible obviously, will definitely add a little to costs which someone has to bear or approve, as the case might be.

On a quick response on the government’s move, Sanjeev Aggarwal, Founder and CEO of Amplus Solar, Asia’s one of the leading distributed energy company providing low carbon energy solutions to industrial and commercial (C&I) customers, has broadly welcomed the government’s move by saying that “the government’s step to allow resuming the construction of renewable energy projects is a welcoming move in favour of the renewable industry. We will be utilising the opportunity well while being extremely cautious at the same time. It is our duty to take necessary precautions at the site, maintain a safe working environment, keeping social distancing and sanitation a priority.”

While on asking about how the actual operation will work? or will there any challenges the companies going to face? K.R. Harinarayan, Founder and CEO, U-Solar Clean Energy, a solar EPC and developer company, clearly said “definitely challenges are expected once operations begin on 20th April, including the availability of manpower and material transport & delivery for project engineering activities. In order to address these challenges U-Solar is preparing by training our staff both on-site as well as the corporate HQ with our Health & Safety Handbook based on WHO’s health guidelines. There will be additional measures that will be implemented to all of the site operations, namely social distancing and health checks at the site, U-Solar will be providing masks and sanitizers for all site personnel. Logistic implications of Covid-19 will have to be navigated such as the issuance of passes for movement, local permissions for labor and inter-state travel guidelines/restrictions. It will take a bit of time for the wheels to start moving and there will be a gradual ramp-up of the project operations as these new measures come into place in the next couple of months. It is a good move to reiterate guidelines to facilitate solar projects as an essential service, moving forward clean energy will play an essential role in the energy power mix and India’s sustainable energy goals need to be met as well.”

In line with other stakeholders, Pinaki Bhattacharyya, CEO, Amp Energy India, commented that “Start of construction activity is a respite for the RE industry because stalled RE projects were adversely affecting project developers and also hampering new capacity additions. However, the developers need to exercise utmost caution if they resume work during the national lockdown and it may be prudent to start once the situation is controlled and transportation services resume. Although, it is yet to be seen if all the states implement these guidelines and in what manner. The casual labour class involved in construction activities that have been left unemployed due to the lockdown will no longer lose wages and that is a positive development. As a company we are ensuring that any daily wage labour stranded at the sites are provided resources like food, supplies and wages during this period.”

While exploring more on the effects of guidelines, we talked to Pawan Pandey, Director, Radite Energy, an EPC player having almost 700 MW of utility-scale build-ups, besides 12 MW of rooftop solar, initially he also welcomed the move.

However, on asking about the ground-reality he said that “there are challenges in the road ahead because right now export and import has not started yet and also we are currently struggling with the manpower as well.”

“Manpower is the biggest challenge right now in the construction sector because they are not available at all as they have mostly gone to their home towns due to lockdown. So we are not getting personnel at all,” he reiterated.

On the availability of local manpower, Pandey added that “it is having its own challenges. Even if we offer double remuneration then also the required number of people is not available for example – if we need 10 people we are able to get only 2.”

While asking about what can be done right now, optimistically Pandey suggested “So right now we can start with the operations & maintenance (O&M) activities only. Also, we can bring our material at a single location which was segregated earlier at different plants when they were working. Next, we can do planning for the upcoming time but it is not as such good enough until on ground we have manpower, even if we have material also without manpower there’s no use of it.”

On the flip side, he added that “but for starting the work on an under-construction plant or any new plant construction we are currently facing lot of challenges because in the construction field most of the labour belongs from states like UP, Bihar, Kolkata and Maharashtra and for these people the lockdown is up to April 30, 2020, atleast!”

“Government has allowed but with a lot of limitations, so it is very difficult to operate for the next 3 to 4 months,” Pandey concluded.

Some of the developers are already anxious to check if the state agencies appointed to oversee these projects will take April 20 as the end date for the disruption caused due to the coronavirus pandemic. Based on the limited feedback we could get, for now, it is very clear that the industry will be pushing for a date as June 1 to be considered as the fresh date for considering a return to some kind of normalcy in operations.

With an active MNRE intervening regularly for the sector in the past few weeks and 2020 in fact, hopes are high that the ministry will continue to take a pro-industry view on resolving issues preemptively.

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