Gujarat Regulator Rejects Captive Solar Project’s Time Extension Plea

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MNRE’s West Asia Advisory Offers More Time, but Developers Say Relief May Fall Short

The Real Cost of Energy Storage Systems Goes Beyond Battery Prices

Solar Module Capacity Under ALMM Rises to 225 GW

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					</table>The Ministry of New and Renewable Energy’s (<a href="https://mnre.gov.in/en/" target="_blank" rel="noopener">MNRE</a>) recent <a href="https://www.mercomindia.com/mnre-allows-four-month-extension-for-renewable-projects-hit-by-west-asia-crisis" target="_blank" rel="noopener">advisory</a> for renewable energy projects offers some relief to developers grappling with equipment supply, logistics, and construction disruptions arising from the prolonged West Asia crisis.
The advisory allows Renewable Energy Implementing Agencies and procuring entities to consider granting force majeure-based extensions of up to four months to eligible projects affected by the West Asia conflict. Developers and contractors may receive two to four months to comply with contractual obligations where the Scheduled Commissioning Date or Scheduled Commencement of Supply Date falls on or after February 28, 2026.
This relief is subject to applicable force majeure provisions, and developers must establish that the delays are directly attributable to disruptions arising from the West Asia situation.
Dilip Mehta, Director, Technical Services at <a href="https://www.hexaclimate.com/" target="_blank" rel="noopener">Hexa Climate</a>, said the West Asia war has affected the availability of transport fuel and liquefied petroleum gas (LPG), disrupting galvanization activities and the supply of steel and equipment for projects.
“Due to the conflict, crude oil prices suddenly spiked to $118 per barrel, which in turn increased the prices of all crude derivatives used in projects. Cable costs shot up disproportionately. Migrant workers had a hard time finding cooking gas at construction sites and had to leave,” he said.
The conflict also drove up freight rates in international shipping markets. According to industry stakeholders, container rates on West Asia trades increased by 30% to 40%, carriers added war risk surcharges, and vessels were repositioned.
The impact of the West Asia crisis can be gauged by the fact that recently <a href="https://www.grinfra.com/" target="_blank" rel="noopener">G R Infraprojects</a> issued a notice to terminate, with immediate effect, its engineering, procurement, and construction (EPC) agreements with NTPC to implement a battery energy storage system at NTPC’s Mouda Super Thermal Power Station. The company attributed the termination to continuing force majeure and war-risk circumstances, along with contractual issues arising from the agreement provisions.
A leading developer said the extension could help renewable projects facing delays in equipment supply, logistics, construction, or other activities directly affected by the disruption.
“Additional time without penalties can reduce the risk of liquidated damages and contractual disputes and provide developers greater flexibility to complete projects without absorbing costs linked to accelerated execution. This is particularly relevant for projects with tight commissioning schedules, where short delays can affect power purchase agreement (PPA) obligations, financing timelines, and transmission arrangements,” he added.
Too Little, Too Late?
Industry stakeholders, however, say the two-to-four-month relief may not fully reflect the duration of supply-chain disruptions affecting some projects.
Vatsal Kundalia, Managing Director at <a href="https://www.advaitgreenergy.com/" target="_blank" rel="noopener">Advait Greenergy</a>, said imported electrical equipment used in projects, including transformers, HT/LT switchgear, PCC panels, and PDB panels, has seen lead times increase from five to six months to 10 to 12 months or more.
“This has been accompanied by higher freight and marine insurance costs. Because these imports are dollar-denominated and the rupee has depreciated over the same period, landed costs have risen, further squeezing margins on projects that were already committed at fixed tariffs,” he said.
The shorter extension window may also be insufficient to address financing-related delays. Projects still working toward financial closure need enough runway for lenders to re-underwrite revised project costs and schedules. A two- to four-month window may be too short for this process,  Kundalia added.
“The disruption began at the end of February. The advisory came on August 21, 2026. Developers carried that risk for nearly six months while the file moved. For a project mid-procurement in February, four months is about right. For one that had to re-tender a supply package because a vendor walked, it is not. Six months would cover the real spread,” Mehta said.
Little Room to Pass on Costs
The extension addresses project timelines but does not, by itself, compensate developers for higher costs resulting from the disruption.
Lenders typically structure debt and disbursements around predetermined project costs and commissioning dates. When costs rise and deliveries are delayed, project economics and schedules may need reassessment.
For projects contracted at fixed tariffs before the cost escalation, developers may have limited ability to pass these expenses on to offtakers, leaving the additional expenditure to be absorbed through project margins.
Projects that have not achieved financial closure face an additional challenge, as lenders may need to reassess project costs, schedules, and financing assumptions before committing capital.
Establishing Force Majeure
Another potential challenge is establishing that a project delay is directly attributable to the West Asia crisis, as required under the MNRE advisory.
Project delays can result from several overlapping factors, including financing, land acquisition, statutory approvals, engineering changes, and supply chain constraints. Separating the impact of geopolitical disruptions from other project-specific delays can be difficult.
Industry stakeholders noted that overseas suppliers, particularly smaller vendors further down the supply chain, may not always issue formal force majeure certificates. They suggested that procuring agencies could accept a combination of supplier correspondence and shipping documentation to substantiate genuine claims where formal certificates are not available.
Mehta noted that the advisory does not amend a PPA. He pointed out that the advisory permits implementing agencies to consider granting relief but does not require them to approve an extension.
The words are ‘may consider.’ “So, the developer files under its own force majeure clause and waits, while bank guarantees sit encashable. MNRE should give agencies a defined window, say forty-five days, to decide a claim. Relief that arrives after the guarantee is called is not relief,” he added.
Conditional Protection
The extent to which the advisory may shield developers from liquidated damages and other contractual consequences will ultimately depend on individual contracts.
Kundalia noted that some existing PPAs, EPC contracts, and equipment supply agreements may contain narrower force majeure definitions that do not clearly cover indirect overseas disruptions that result in longer import lead times or higher costs.
Industry experts suggest that relief should recognize extended import lead times and conflict-related cost escalation, with equivalent relief flowing through the contracting chain to EPC contractors, original equipment manufacturers, and suppliers.
Looking Ahead
Kundalia said the advisory could be more effective if accompanied by a mechanism allowing developers to seek recognition of cost escalation directly attributable to the disruption where government entities are the procuring agencies. Without such a mechanism, extending project schedules leaves developers bearing the additional costs.
In the first half of 2026, the renewable energy sector’s capex increased by roughly 20%, with the West Asia conflict contributing to the increase, Mehta said.
Mehta said force majeure may excuse delayed performance but does not compensate developers for the resulting costs. He also noted that a foreign conflict would not ordinarily qualify as a change-in-law event, leaving developers exposed to the financial impact.
“Two things would help. Treat war risk premia as a pass-through, the way any other statutory cost movement is treated. And, let the extended commissioning date carry Interstate Transmission System waiver eligibility, so a project is not penalized twice for one delay.”
The MNRE advisory could give developers more time to manage conflict-related delays and reduce the immediate risk of contractual penalties for eligible projects. However, it does not resolve the higher equipment, freight, insurance, financing, and other costs generated by those disruptions.
Industry stakeholders view the advisory as an important first step, not a complete solution. They argue that a longer relief window for severely affected projects, clearer documentary requirements, defined timelines for deciding claims, and mechanisms to address conflict-related cost escalation would make the relief more effective.

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					</table>As a conditional relief measure for renewable energy developers <a href="https://www.mercomindia.com/cercs-connectivity-relief-a-double-edged-sword-for-delayed-renewable-projects" target="_blank" rel="noopener">granted</a> grid connectivity access, the Central Electricity Regulatory Commission (CERC) recently introduced a standardized mechanism that allows them additional time to meet land, financial closure, and commercial operation milestones by paying milestone extension charges.
The Ministry of New and Renewable Energy (MNRE) <a href="https://www.mercomindia.com/solar-cell-capacity-under-almm-grows-to-39-4-gw" target="_blank" rel="noopener">added</a> 3,709 MW of solar cell capacity under the Approved List of Models and Manufacturers (ALMM) List-II in its ninth revision. The total enlisted capacity under ALMM-II has expanded to 35,468 MW.
MNRE <a href="https://www.mercomindia.com/mnre-allows-four-month-extension-for-renewable-projects-hit-by-west-asia-crisis" target="_blank" rel="noopener">advised</a> renewable energy implementing agencies and other power procuring agencies to consider granting an extension of up to four months to renewable energy projects affected by disruptions arising from the situation in West Asia.
A Central Electricity Authority committee <a href="https://www.mercomindia.com/cea-plans-institutional-push-for-indigenous-scada-cut-import-dependence" target="_blank" rel="noopener">recommended</a> setting up a formal institutional framework to drive the indigenization of Supervisory Control and Data Acquisition software and hardware and eliminating import dependence by 2030.
PFC Consulting <a href="https://www.mercomindia.com/pfc-names-winner-of-6-5-gw-transmission-project-auction-in-gujarat" target="_blank" rel="noopener">announced</a> the winner of its auction to establish an interstate transmission system to evacuate 6.5 GW of renewable energy from Gujarat.
The Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) <a href="https://www.mercomindia.com/uttar-pradesh-tenders-2-5-mw-rooftop-solar-projects-with-battery-backup" target="_blank" rel="noopener">invited</a> bids to install 2.5 MW of hybrid rooftop solar systems with hybrid inverters and battery backup at multiple government buildings under the capital expenditure mode. Bids must be submitted by September 15, 2026. Bids will be opened the next day.
Bhagwati Industrial Group <a href="https://www.mercomindia.com/maharashtra-invites-bids-for-2-25-gw-solar-projects-under-mskvy" target="_blank" rel="noopener">floated</a> two tenders for the design, engineering, procurement, erection, construction, testing, and commissioning of grid-interactive solar projects aggregating 2,249 MW across multiple Maharashtra State Electricity Distribution Company’s substations under the Mukhyamantri Saur Krishi Vahini Yojana 2.0. The last date to submit bids for both tenders is August 27, 2026.
UPNEDA <a href="https://www.mercomindia.com/uttar-pradesh-tenders-11-mw-rooftop-solar-projects" target="_blank" rel="noopener">invited</a> bids to install 11 MW of grid-connected rooftop solar projects at government buildings across the state. The last date to submit bids is September 15, 2026.
UPNEDA <a href="https://www.mercomindia.com/uttar-pradesh-invites-bids-for-2-5-mw-off-grid-solar-projects" target="_blank" rel="noopener">invited</a> bids to install 2.5 MW of off-grid solar projects at multiple government buildings under the capital expenditure mode. Bids must be submitted by September 15, 2026. Bids will be opened the next day.
Tata Power Renewable Energy, a subsidiary of Tata Power Company <a href="https://www.mercomindia.com/tata-power-renewables-arm-commissions-190-mw-fdre-project-in-rajasthan" target="_blank" rel="noopener">commissioned</a> a 190.5 MW solar firm and dispatchable renewable energy project at Kalasar in Bikaner, Rajasthan. The project is part of a larger 460 MW firm and dispatchable renewable energy capacity.
The solar arm of KP Group, Sun Drops Energia, will <a href="https://www.mercomindia.com/sun-drops-to-acquire-renewable-epc-firm-dmgel-for-%E2%82%B9558-million" target="_blank" rel="noopener">acquire</a> up to 100% of the equity shares in renewable energy solutions provider DEK and Mavericks Green Energy at a valuation of ₹558 million (~$5.83 million).
State-owned lender to the energy sector, Power Finance Corporation’s revenue for the first quarter (Q1) of the financial year 2026-27 <a href="https://www.mercomindia.com/power-finance-corporations-revenue-for-q1-fy-2027-remains-flat" target="_blank" rel="noopener">remained</a> flat at ₹285.27 billion (~$2.98 billion), compared to ₹285.39 billion (~$2.98 billion) during the same period the previous year.
China-based photovoltaic-grade polysilicon manufacturer Daqo New Energy <a href="https://www.mercomindia.com/daqo-new-energys-q2-revenue-falls-17-as-polysilicon-prices-drop" target="_blank" rel="noopener">reported</a> revenue of $62.66 million in Q2 of 2026, a 16.7% year-over-year (YoY) decline from $75.19 million. The quarterly revenue beat analysts’ estimates by $6.59 million.
Norway-based renewable energy solutions provider Scatec <a href="https://www.mercomindia.com/scatec-plans-increasing-battery-storage-capacity-fivefold-q2-revenue-up-4" target="_blank" rel="noopener">posted</a> revenue of NOK1.37 billion (~$147.3 million) in Q2 of 2026, up 4% YoY from NOK1.32 billion (~$141.6 million). Earnings before interest, taxes, depreciation, and amortization stood at NOK824 million (~$88.65 million), down 20% YoY from NOK1.03 billion (~$110.5 million).

Daily News Wrap-Up: CERC Grid Relief Brings Mixed Gains for Developers

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					</table>The Ministry of New and Renewable Energy (<a href="https://mnre.gov.in/en/" target="_blank" rel="noopener">MNRE</a>) has advised renewable energy implementing agencies (REIAs) and other power procuring agencies to consider granting an extension of up to four months to renewable energy projects affected by disruptions arising from the situation in West Asia.
The relief can be considered for projects whose Scheduled Commencement of Supply Date (SCSD) or Scheduled Commissioning Date (SCD), including an already extended SCSD or SCD, falls on or after February 28, 2026.
The extension must be granted in accordance with the force majeure provisions of the respective power purchase agreements (PPAs) and the prescribed procedure for seeking such relief.
The advisory applies to REIAs, including the Solar Energy Corporation of India (SECI), NTPC, NHPC, and SJVN, as well as power, energy, and renewable energy departments of state and Union Territory governments and organizations and agencies under them.
MNRE has also requested the Ministry of Power to issue orders providing similar relief to affected renewable energy developers by extending or providing General Network Access (GNA) and connectivity without any penalty. It has further sought continuation of the applicable interstate transmission system (ISTS) waiver or concession during the extended project period.
The Ministry has separately requested the Central Transmission Utility of India to take similar action regarding GNA and connectivity.
West Asia Situation as Force Majeure
The latest advisory follows an earlier MNRE communication dated July 6, 2026, which asked REIAs and state and Union Territory authorities to consider the Ministry of Finance&#8217;s April 29, 2026, office memorandum while deciding developers&#8217; requests for extensions due to disruptions arising from the West Asia situation.
The Department of Expenditure had clarified that the ongoing West Asia situation should be treated as ‘war,’ which is recognized as an event triggering force majeure under government procurement rules.
Where disruptions arising from the situation have directly or consequentially affected contractual obligations relating to goods and services or construction and works contracts with government agencies, procuring entities can invoke force majeure.
Under the Finance Ministry&#8217;s memorandum, contractual obligations due for completion on or after February 28, 2026, may be extended by at least two months and no more than four months without imposing costs or penalties on the contractor.
However, the parties may invoke force majeure only if they were not already in default of their contractual obligations as of February 27, 2026. The relief also applies only to non-performance directly attributable to disruptions caused by the West Asia situation.
No Blanket Extension
MNRE issued the latest clarification after receiving further representations seeking a blanket extension of project timelines for affected renewable energy projects.
These representations cited an advisory from the Ministry of Housing and Urban Affairs, which had advised real estate regulatory authorities that they could extend the registration and corresponding completion timelines of eligible registered real estate projects by four months.
MNRE, however, noted that the standard bidding guidelines for procuring solar, wind, hybrid, and firm and dispatchable renewable energy power require PPAs to contain provisions defining force majeure events and specifying the exclusions, applicability, and relief available in such circumstances.
The Ministry also noted that PPAs generally recognize war as a force majeure event. Accordingly, rather than providing a blanket extension, MNRE has advised the concerned agencies to consider extensions under the force majeure provisions of individual PPAs and the applicable contractual procedure.
In July, MNRE <a href="https://www.mercomindia.com/mnre-withdraws-almm-list-i-transition-relief-for-delayed-solar-projects" target="_blank" rel="noopener">withdrew</a> transitional relief for certain solar projects that could not comply with the ALMM List-I requirement due to commissioning delays beyond the developers’ control.
Subscribe to Mercom’s real-time <a href="https://www.mercomindia.com/product/mercoms-renewable-energy-regulatory-updates" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.

MNRE Allows Four-Month Extension for Renewable Projects Hit by West Asia Crisis

The Public Establishment of Electricity for Generation (<a href="http://peeg.gov.sy/" target="_blank" rel="noopener noreferrer">PEEG</a>) of the Syrian Arab Republic has floated tenders for the development of two solar projects (40 MW and 23 MW ) in the country.
The first solar project for 40 MW will be developed at the Jandar power project in Homs province on a turnkey basis. The second solar project will be developed at the Al-Nassereih power project in the Damascus countryside province, also on a turnkey basis.
The contract will also include the supply of spare parts and tools and the training of personnel. The last date for the submission of bids for both the projects is August 10, 2020.
The 40 MW project to be developed in the Homs province consists of three sections. While the first section will be developed with a capacity of 2 MW, the second section will be of 14 MW capacity. The third section will be developed with a capacity of 24 MW.
Interested bidders will have to pay an amount of €60,000 (~$65,363) for the first section and €420,000 (~$457,541) for the second section as the bid bond amount. Similarly, the bidders will have to pay a bid amount of €720,000 (~$784,357) for the third section. The time for the execution of the first section has been set as 24 months and 36 months for the second. For the third section, the time for the execution of the project has been set as 60 months. The bidder can submit bids for more than one section.
Like the first project, the second project of 23 MW also consists of three sections.  While the first section will be developed with a capacity of 7 MW, the second will be of 7 MW capacity. Similarly, the third section will be developed with a capacity of 9 MW.
For this, the interested bidders will have to submit an amount of €230,000 (~$250,558) as the bid bond amount for all the three sections. The execution period for the first section has been set as 18 months, whereas for the second section, it will be 36 months. Similarly, for the third section, the execution period has been set as 60 months.
Countries in the Middle East and West Asia have been shifting gradually toward clean and sustainable energy. With no dearth of sunshine, these countries can play a vital role in the large-scale adoption of renewable energy.
Recently, the Emirates Water and Electricity Company, a subsidiary of Abu Dhabi Power Corporation, <a href="https://mercomindia.com/abu-dhabi-2-gw-solar-project-2/" target="_blank" rel="noopener noreferrer">received</a> the lowest ever tariff for its 2 GW solar project. The record low tariff globally was recorded at AED 0.0497 ($0.0135)/kWh. The Al Dhafra solar PV project is expected to power approximately 160,000 households across the UAE.
Previously, Mercom had <a href="https://mercomindia.com/ebrd-bank-audi-200-million-renewable-lebanon/" target="_blank" rel="noopener noreferrer">reported</a> that the European Bank for Reconstruction and Development (<a href="https://www.ebrd.com/home" target="_blank" rel="noopener noreferrer">EBRD</a>) had signed its first green economy financing facility (GEFF) in Lebanon. The EBRD and Bank Audi, the largest bank in Lebanon, had joined hands for the expansion of renewables by providing $100 million (~₹7.54 billion) each for green projects in Lebanon.

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