Power projects may not be able to use grandfather clause

As per the Ministry of New and Renewable Energy (MNRE), already commissioned renewable power projects might not be able to take advantage of the grandfather clause to import any solar equipment from China, after the government earlier assured them of such an exemption.

Adding a grandfather clause to existing power purchase agreements (PPA) would mean that there is an understanding between solar developers and the government that the project costs more than the allocated budget at the time of closing of the deal, and hence, compensation will be provided to the developers via discoms. Instead, a formula based on the coal cess is likely to be implemented to recover the losses incurred due to the safeguard and basic customs duties.

 

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