Government waives inter-state transmission charges for wind and solar projects

The Centre has waived inter-state transmission charges and losses on transmission of electricity generated fromsolar and wind projects by revising the National Tariff Policy. 

The government issued a notification on September 30, stating that the waiver for wind power projects will be applicable for those that have been commissioned till March 31, 2019. While with regard to solar projects, those that have been commissioned till March 31, 2017 will be eligible for the waiver, as per the CERC (Sharing of inter state transmission charges & losses) (third amendment) Regulations, 2015.

The waiver will be available for 25 years, beginning from the date of commissioning. However, the power ministryhas made a further specification, limiting the waiver to projects that have been awarded through competitive bidding.

Further, the waiver will be available for wind projects, entering into power purchase agreements with distribution companies in compliance with the renewable purchase obligation (RPO) that mandates a certain percentage of electricity be generated from renewable sources..

''The waiver is well meant but too constraining to deliver intended policy impact. Generally, inter-state projects entail a larger capacity to be economic, and to properly prepare a project for competitive bidding needs time. Ideally, a policy of this nature should offer a time frame of 2-3 to attract credible investors,'' said Kameswara Rao, Partner, Government Reforms & Institutional Development, PwC India.

Further, he said that renewable energy can deliver much more if there is consistency in policy. 

Given that in some states, the regulators and courts have interpreted the RPO to be applicable to a broader range of designated consumers including open access users, Rao said that the waiver should include them as well.

Meanwhile, Kuldeep Jain, Managing Director, CleanMax Solar, noted that despite the concept and thought behind the waiver being sound, a few other measures could be taken to boost the use of renewable energy.

''A few additional steps need to still be taken to further the intent. They include giving solardevelopers an extended time line till 2019, and extend the benefits (of waiver) to captive & group captive projects, which will enable the industrial consumers located at multiple states to setup projects,'' he said.


Smart Grid Bulletin February 2019

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