NEW DELHI :
The waves of China’s crippling power shortage have hit the Indian coast, with Chinese solar system manufacturers bringing force majeure to their Indian customers, citing their inability to deliver systems on agreed schedules.
Two people with knowledge of the development confirmed the invocation of the force majeure clause, which enables a manufacturer to cite a disruption caused by an unforeseen event, in this case power shortages, as the reason for the delay.
Trina Solar Ltd, one of the largest solar power system manufacturers in China, is among the companies that have sent such notices. « Trina Solar (Schweiz) AG hereby sends you a notification of a force majeure event that is currently taking place in China and is preventing us from producing at full capacity, » said a message from an executive at a major Indian solar power developer was shared.
This is important because the upcoming deliveries to Indian developers by March 31, 2022 will be around 5 gigawatts (GW). India is working hard to achieve 100 GW of installed solar capacity by 2022 as part of its 175 GW renewable energy target.
In order to control imports from China as part of its economic strategy, India has imposed a basic tariff on imported solar cells, modules and inverters from April 1st next year. In addition, the Department of New and Renewable Energy has enacted an ordinance enforcing a list of approved solar PV models and module manufacturers for government sponsored programs, including projects where distribution companies use electricity to power their consumers.
“As you may know, China has reduced electricity consumption in several provinces, including where some of our manufacturing facilities and component suppliers are located. This will also affect Trina’s factories outside of China, ”said the force majeure announcement.
Despite the world’s largest green power program, India has a domestic production capacity of only 3 GW for solar cells and 15 GW for solar modules. Chinese solar system manufacturers such as Trina Solar Ltd, Jinko Solar, ET Solar, Chint Solar and GCL-Poly Energy Holdings Ltd dominate the field of solar systems.
“With the interruptions of the shipping companies, the quadrupling of freight rates, the unavailability of containers and now these reports of force majeure, we have led to the perfect storm. The situation is bad, « said the CEO of an Indian company on condition of anonymity.
India’s solar cell and module imports declined to $ 571.65 million last fiscal year, compared to $ 2.16 billion and $ 1.68 billion in 2018-19 and 2019-20, respectively. Of the solar cell and module imports worth $ 571.65 million in 2020-21, China alone accounted for $ 494.87 million, followed by Thailand with $ 18.76 million.
Inquiries by email to the spokespersons for Jinko Solar, ET Solar, Chint Solar and GCL-Poly Energy Holdings Ltd on Sunday remained unanswered at the time of going to press.
It does when Mukesh Ambani-controlled Reliance Industries Ltd, the Adani Group and the US-based First Solar are among 19 companies committed to building solar production units under the ambitious $ 4,500 billion. The project is expected to add 10 GW of capacity for integrated solar PV production facilities and bring in direct investments of around 17,200 billion. In addition to using its growing green energy market to boost production, India also wants to play a bigger role in global supply chains.
« Unfortunately, no detailed information is available at the moment, but we felt it was necessary to inform you as soon as possible about possible disruptions that will affect deliveries in the coming months, » says the above-cited statement on force majeure.
China’s power shortage also comes at a time when coal supplies in India’s thermal power plants are becoming dangerously scarce as demand for electricity rises and fuel supplies cannot meet growing demand. Heavy rains hampered coal production and shipping, and the rise in demand for electricity due to a recovering economy reduced coal supplies. Domestic coal consumption has also increased after the more expensive imported coal pushed production from coastal projects down and production from other fuel sources declined.
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