Energy producers have requested the federal government to maintain the waiver on inter-state transmission fees for renewable vitality till 2030 to assist clear vitality take root extra deeply in India’s economic system.
A consultative assembly chaired by Minister for New and Renewable Power Pralhad Joshi was held on February 5, the place Wind Impartial Energy Producers Affiliation (WIPPA) and different associations shared their considerations and options.
A key demand from the gamers was to increase the waiver on inter-state transmission system (ISTS) fees, which is in any other case on account of finish on June 30 this yr, sources conscious of the matter mentioned.
Renewable vitality gamers requested MNRE to increase the ISTS waiver until 2030 to advertise investments within the sector and support India’s formidable vitality transition targets.
At present, fees are waived for 25 years for inexperienced energy initiatives resembling photo voltaic, wind, and hybrid initiatives, and battery vitality and pump storage initiatives commissioned earlier than June 30, 2025.
The present ISTS waiver helps renewable vitality builders keep away from Rs 0.4-1.8 per unit in fees that will have incurred on transferring electrical energy from producing state to consumption centres. This, sources mentioned, is a considerable chunk of the overall tariff.
If ISTS waiver just isn’t prolonged, it is going to result in important improve in tariff and make energy generated from renewable sources uncompetitive vs different sources like coal, sources mentioned including this may even result in a rise in procurement prices of electrical energy distribution corporations.
Many LOAs (letter of awards) wouldn’t convert to energy buy agreements (PPAs) if the waiver is rescinded in June 2025, business gamers felt.
On different hand, the price of extending the waiver is nominal whereas the advantages are large. It would assist DISCOMs signal the pending 40 GW of PPAs as they might save 60-90 paise per unit.
Additional, industries might be motivated to decarbonise and go for renewable vitality initiatives. Each will assist the nation transfer in direction of the five hundred GW mission.
In keeping with official knowledge, transmission fees (with out waiver) are roughly Rs 52,691 crore per yr whereas the quantum of ISTS waiver is barely round 7 per cent at Rs 3,602 crore.
For any extension of ISTS waiver, heads of each Ministry of New and Renewable Power (MNRE) and Ministry of Energy are anticipated to fulfill quickly to resolve on the long run plan of action, sources added.
India faces transmission constraints in its endeavour to fulfill renewable vitality targets. Solely Madhya Pradesh can have spare capability sooner or later, whereas Rajasthan and Gujarat won’t. States must plan renewable and different energy procurement as per the useful resource adequacy framework.
On the assembly, considerations have been raised about delays in closing letters of award (LOA) with energy buy agreements (PPA), resulting in developer liabilities. New tips will purpose to shut LOA with PPA inside a yr. Moreover, it was identified on the assembly that transmission fees for builders have been lowered to handle such delays.
There is a want to increase ISTS transmission cost waivers for renewable vitality to maintain distribution corporations energy procurement prices low. A phased discount of those waivers could possibly be thought-about to handle the issue of socialisation of prices. Nonetheless, this might result in PPAs not materialising owing to extend in RE procurement price, they mentioned.
