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Mint
18 hours ago
- Business
- Mint
Indian RE developers explore invoking force majeure on rare earth supply issues
New Delhi: Indian green energy developers and manufacturers are exploring invoking force majeure on meeting project completion deadlines because of rare earth and rare earth magnet supply disruptions from China, said three people in the know of the developments. The supply crunch is also likely to increase solar and wind tariffs on power from upcoming renewable projects in the country, they said. A force majeure clause in contracts allows parties to be excused from contractual obligations in case of an extraordinary situation that makes it impossible or impractical to fulfil the commitment as per the contract. Given that India's renewable energy contracts ensure stiff penalties for delays, the invocation of a force majeure clause will protect developers and suppliers from the risk of penalties, including fines and encashment of bank guarantees. The development assumes significance given that it will impact India's ambitious green energy trajectory and cripple the manufacturing ecosystem for renewable energy equipment required for solar modules, wind turbines and batteries. Also read: China's rare earth crackdown: Time to rethink these EV stock holdings? 'As supply chain issues continue, developers are scouting for options, including enforcing force majeure provisions in order to avoid penalties," said one of the three people mentioned above. The Union government has allowed force majeure in certain instances and extended the timeline of renewable energy projects, such as in 2020, due to the covid pandemic. Simarpreet Singh, executive director and chief executive officer (CEO), Hartek Group, which is involved in solar EPC, said, 'The tightening supply of rare earth metals (REMs) from China has significant implications for local manufacturing of solar cells, modules, and related products. Although REMs constitute a small fraction of solar components, they are vital in enhancing overall efficiency." Vital role Rare earth elements play a key role in increasing the efficiency of solar modules. As of March 2025, India had a domestic solar module manufacturing capacity of 74 gigawatt (GW) and 18 GW of wind turbine capacity. A government official said that the Union ministry of new and renewable energy (MNRE) is monitoring the situation closely and has also discussed it with stakeholders. 'The ministry is in favour of industry delegations reaching out to the Chinese suppliers to resolve the immediate supply issue," the official said. Queries sent to the ministry of new and renewable energy, Adani Green Energy, Suzlon, and Reliance Industries remained unanswered until press time. Indian renewable energy developers are also expecting an increase in prices of rare earth elements and an eventual increase in power tariffs. Currently, solar power tariffs average around ₹2.60 per unit. For wind power projects, tariffs average around ₹3 and for round-the-clock (RTC) and firm and dispatchable renewable energy (FDRE) projects, which include battery storage capacity, tariffs are in the range of ₹3-4 per unit. Also read: Supply uncertainty of rare earth magnets from China could weigh auto industry: ICRA While rare earth elements such as dysprosium and cerium enhance solar modules' efficiency, they are also critical raw materials for battery storage systems and key for manufacturing wind turbines. A government official said the new and renewable energy ministry is monitoring the situation. This follows the Indian automobile industry facing the vexed issue of China disrupting the supply of rare earth magnets. Starting 4 April, China banned the export of rare earth magnets across the world amid the tariff war with the US. Experts suggest this is more of a bargaining tactic, and going ahead, the situation should ease, given the trade talks between China and the US are successful. Double trouble 'We have multiple aspects to the rare earth issue," said Sambitosh Mohapatra, leader, Climate and Energy, PwC India. Significant issues remain around the supply chain given its dependence on China and its usage in battery systems. It is influenced by trade and tariffs negotiations, and it should smooth out as trade negotiations conclude. The second issue can be around the real cost impact around components imported for solar module manufacturing. It has an impact on renewable power developers, he said, adding that decisions around force majeure enforcement would largely depend on a case-by-case basis and the provisions in respective contracts. An executive with a power company said, 'The concerns have increased in the past couple of weeks, with the impact first felt in the automotive industry. Now, the renewable players are also concerned and have been in touch with the ministry (new and renewable energy ministry) on the issue." Another official said that although tendering agencies like the Solar Energy Corp. of India (Seci) extend timelines for projects on a case-by-case basis, the Union government would look at the requirement for a blanket extension for all impacted projects. The official added that the situation has worsened as both solar equipment and battery manufacturing spaces are reeling under the pressure of a lack of Chinese technicians. While China has not allowed technology transfer, the Indian government has not allowed Chinese technicians. 'Previously, extensions have been given by the ministry. If required and the situation becomes more concerning, such relaxations can be considered," the official said. Currently, India has an installed solar energy capacity of 110.83 GW, and the wind power generation capacity is 51.29 GW. Rohit Laumas, advisor for mining and supply chain at India Energy Storage Alliance (IESA) noted that enabling imports is the only short term and efforts are underway to ease imports. Also read: China's rare earth export curbs are India's wake-up call 'Along with concentrated supplies and high demand, geopolitics and weaponization of trade have also been impacting the supplies (of critical minerals and rare earths). China has from time to time resorted to export bans on minerals and processing technologies. The current supply gap will have to be filled by imports only and there have been considerable efforts to make up for the supply gap. Both the government and industry players have been making efforts in this direction," said Laumas. Price hit Narayan Kumar, CEO of Kshema Power & Infrastructure Co. Pvt. Ltd, said, 'A likely impact of this situation would be an increase in prices both for rare earth and magnets, leading to eventual costs for developers and an increase in tariffs. In the case of solar, the tariffs may rise by 5-8 paise. It may also happen that developers avoid participating in bids in the short term till the supply chain is not eased." He further said that the current supply situation may delay India's annual renewable capacity addition target. 'The situation would require one or two quarters to ease," Kumar said. India has set a target of tendering and completing 50 GW of renewable energy projects in a bid to achieve the 500 GW non-fossil capacity by 2030, out of which over 450 GW would be renewable capacity. India's current renewable energy capacity is 223.62 GW. Rare earth elements (REEs) are a set of 17 metallic elements divided into two broad groups—light and heavy REEs. All modern technological innovations, such as AI, GenAI, robotics, space exploration, clean energy technology and defence, require rare earth elements. India imports most of its rare earth requirements. In FY24, it imported 2,270 tonnes, 16.7% higher than in FY23. Supply assurance Prashant Mathur, CEO of Saatvik Green Energy, a solar module manufacturer, said that materials like lithium, graphite, and rare earth elements are central to the technologies driving India's energy transition, from solar modules to battery storage. Recent geopolitical developments have made it clear that access can no longer be taken for granted. India is also looking at becoming a battery manufacturing hub and, in the past few years, has developed production-linked incentive schemes and viability gap funding to support local manufacturing. This sector, which has already been reeling for over a year due to a lack of equipment, supplies and technicians from China, is also facing a massive rare earth shortage. 'China controls over 90% of the rare earth supply chain and processing industry," said Nitin Gupta, CEO and co-founder Attero Recycling, a battery and e-waste recycling company. China's recent ban on rare earth magnet exports is a black swan moment and a similar move for rare earth minerals, then solar, and more importantly, battery manufacturing in the country, which is still in the nascent stage, would come to a halt. He added that in the near term, the government could hold talks with China and ensure that supplies remain uninterrupted. Further, incentives for critical mineral and rare earth recycling, magnet production, and local value addition would help in the long run to reduce dependency on China. "Rare earth recycling can help us meet 75% of the local demand," he said. The government is already developing an incentive scheme to support rare earth processing in the country under the National Critical Mineral Mission. The supply crunch has been felt globally. Both the US and the European Union are in talks with China for rare earth and rare earth magnets supplies. While the US is already engaged with trade talks with China, EU has also raised concerns over supply crunch of rare earths. According to reports, Maros Sefcovic, the European Union's trade commissioner, said the issue was a 'priority" in his meeting on 3 June with Chinese commerce minister Wang Wentao on the sidelines of the Organization for Economic Cooperation and Development conference in Paris. The situation in both the US and the EU is likely to somewhat ease in the near term as China has reportedly allowed export licenses aimed at these regions. On 11 June, Reuters reported that Chinese exporter JL MAG Rare-Earth has been granted licenses for Europe and Southeast Asia, and that it would export magnetic materials, components and motor rotors.
Mint
07-05-2025
- Business
- Mint
Centre alerts world's largest solar park, and RIL's biggest global refinery as tensions with Pakistan escalate
New Delhi: The Centre has put the country's key energy assets along the Pakistan border in Gujarat—including the world's largest solar power park at Khavda, and the world's biggest oil refinery at Jamnagar—on high alert, along with increasing the security at these facilities. 'The security at energy installations along the Pakistan border, including Khavda RE park and Jamnagar refinery are already at high alert and security has been further tightened,' said a person aware of the development on condition of anonymity. Khavda is touted to be the world's largest renewable energy park with a cumulative capacity of 45 GW, with Adani Green developing the largest share of 30 GW. The other developers in the park include state-run NTPC and Gujarat Industries Power Company (GIPC). The project, in Kutch area of Gujarat, is just 1 km away from the India-Pakistan border and falls under the jurisdiction of the Border Security Force (BSF). Jamnagar oil refinery is also under high alert as the area has an airbase and is a no-fly zone for civilian aircraft. The refinery is owned and operated by Reliance Industries, and is the largest and most complex single-site refinery in the world with 1.4 million barrels per day (MMBPD) crude processing capacity and a complexity index of 21.1—the highest in the world. The refinery is also a major exporter of petroleum products from India. Another person aware of the matter said that security at the refinery has been heightened and it is under constant vigil. Queries mailed to the Union ministry of home affairs, Adani Group, NTPC and Reliance Industries remained unanswered till press time. Simarpreet Singh, executive director & CEO of Hartek Group, a renewable energy company, said: 'Safeguarding renewable energy resources requires a robust and multifold approach. This includes extensive physical security such as perimeter fencing, surveillance, staffing, and practical vertical security alongside cyber security." Singh added that also equally critical are avoiding prolonged response times, layering with insurance policies to manage fiscal exposure, and regular safety drills. 'What goes beyond the supply of electricity is the enduring and unwavering response supported by strong infrastructure that is built, keeping in mind, geopolitical unpredictability,' he added. There are three Indian Air Force bases – Jamnagar, Naliya and Bhuj – within a radius of 50 km and the area is under high alert. Further, the Jamnagar airport is also closed, along with 24 other airports as per NOTAM (Notice To Airmen) issued by the government till 9 May. The preparedness has been enhanced after the Indian armed forces carried out targeted strikes on nine terror-linked sites under 'Operation Sindoor' early on Wednesday. The operation came as a response to terrorist attacks in Pahalgam, Jammu & Kashmir that killed 26 people, including a Nepali citizen. Mock drills have also been carried out across major cities to test emergency response systems in hospitals, schools, and government offices. As of 1 April 2025, Adani Green, which has a cumulative operational renewable capacity of over 14 GW, commissioned around 5 GW at Khavda. Also read | India on high alert for cyber attacks after Operation Sindoor
Yahoo
25-02-2025
- Business
- Yahoo
Coca-Cola makes electrifying changes at major bottling plant: 'Setting the standard'
A Coca-Cola plant in northern India is getting an 8-megawatt solar upgrade, according to Saur Energy International. This will be the third solar installation put up by Hartek Group and local partner Kandhari Beverages in the last two years, which will bring the total to 14 MW of solar power. The upcoming installation will be the largest in the Jammu and Kashmir region. India is one of the world's top polluters, but it is making big strides in reductions. The country has about 90 GW of solar power alone. That's more than triple its capacity in 2018. This momentum is sorely needed to get the country off coal power plants, which still provide the bulk of Indian power. If you were to install home solar panels, which of these factors would be your primary motivation? Energy independence Lower power bills Helping the planet No chance I ever go solar Click your choice to see results and speak your mind. Clean power is a pillar of environmental improvement, since electrifying everything can get us off burning dirty fuels for energy such as heating and transportation. Not only does switching to heat pumps and electric vehicles help with that mission, but these technologies also perform better overall and help users save money on expenses. That's particularly important in countries such as India that are working to raise the quality of life and develop their economies. While more solar at large scale is always good news, it's also important to remember that Coca-Cola is one of the biggest producers of plastic waste in the world and has backpedaled on efforts to reduce that waste. The company has also engaged in harmful water source exploitation. Check out our guide on sustainability initiatives by mainstream brands to learn more about how to spot worthwhile corporate efforts. The contractor facilitating the solar installation is hopeful about the precedent it sets for the region. "This remarkable 8 MW system is setting the standard for sustainable industrial development in Jammu and Kashmir, not merely powering a building," said Hartek Group Executive Director and CEO Simarpreet Singh. "Our C&I rooftop solar business unit will continue to partner with leading industries to meet their sustainability and net zero goals." Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
