Extend waiver on transmission charges for renewable power till 2030: Power producers to Centre

Energy producers have requested the federal government to maintain the waiver on inter-state transmission prices for renewable power till 2030 to assist clear power take root extra deeply in India’s financial system.

A consultative assembly chaired by Minister for New and Renewable Vitality Pralhad Joshi was held on February 5, the place Wind Impartial Energy Producers Affiliation (WIPPA) and different associations shared their issues and options.

A key demand from the gamers was to increase the waiver on inter-state transmission system (ISTS) prices, which is in any other case on account of finish on June 30 this yr, sources conscious of the matter mentioned.

Renewable power gamers requested MNRE to increase the ISTS waiver until 2030 to advertise investments within the sector and assist India’s bold power transition targets.

Presently, prices are waived for 25 years for inexperienced energy tasks comparable to photo voltaic, wind, and hybrid tasks, and battery power and pump storage tasks commissioned earlier than June 30, 2025.

The present ISTS waiver helps renewable power builders keep away from Rs 0.4-1.8 per unit in prices that will have incurred on shifting electrical energy from producing state to consumption centres. This, sources mentioned, is a considerable chunk of the overall tariff.

If ISTS waiver will not be prolonged, it would result in important enhance in tariff and make energy generated from renewable sources uncompetitive vs different sources like coal, sources mentioned including this will even result in a rise in procurement prices of electrical energy distribution firms.

Many LOAs (letter of awards) wouldn’t convert to energy buy agreements (PPAs) if the waiver is rescinded in June 2025, trade gamers felt.

On different hand, the price of extending the waiver is nominal whereas the advantages are big. It can assist DISCOMs signal the pending 40 GW of PPAs as they might save 60-90 paise per unit.

Additional, industries will likely be motivated to decarbonise and go for renewable power tasks. Each will assist the nation transfer in direction of the five hundred GW mission.

In keeping with official information, transmission prices (with out waiver) are roughly Rs 52,691 crore per yr whereas the quantum of ISTS waiver is just round 7 per cent at Rs 3,602 crore.

For any extension of ISTS waiver, heads of each Ministry of New and Renewable Vitality (MNRE) and Ministry of Energy are anticipated to satisfy quickly to resolve on the long run plan of action, sources added.

India faces transmission constraints in its endeavour to satisfy renewable power targets. Solely Madhya Pradesh may have spare capability sooner or later, whereas Rajasthan and Gujarat is not going to. States must plan renewable and different energy procurement as per the useful resource adequacy framework.

On the assembly, issues have been raised about delays in closing letters of award (LOA) with energy buy agreements (PPA), resulting in developer liabilities. New pointers will intention to shut LOA with PPA inside a yr. Moreover, it was identified on the assembly that transmission prices for builders have been decreased to handle such delays.

There is a want to increase ISTS transmission cost waivers for renewable power to maintain distribution firms energy procurement prices low. A phased discount of those waivers may very well be thought-about to handle the issue of socialisation of prices. Nevertheless, this might result in PPAs not materialising owing to extend in RE procurement value, they mentioned.