Transmission charges waiver for renewables extended for second time

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The Power Ministry has extended the period during which renewable energy project developers will be spared interstate transmission system charges for the transmission of electricity generated by their facilities.

Originally open until the end of March 2022, the ministry has extended the period by nine months so that all solar and wind projects commissioned during that year will secure a 25-year waiver for the grid charges. As before, however, the waiver is only granted to projects allocated through a competitive bidding process and which sell power to electricity distribution companies under power purchase agreements to enable the energy off-takers to fulfill renewable purchase obligations (RPOs).

The move marks the second extension of the waiver after an order issued in February last year extended the original scheme, which had been due to expire at the end of this year for solar projects and at the end of March this year for wind farms.

RPO requirement

The ministry this year established the RPO for solar will be 7.25% in the current fiscal year for all states and union territories, meaning they must procure that percentage of their power mix from solar. The figure will rise to 8.75% in the next fiscal year and 10.5% in 2021-22.

With the non-solar RPO set at 10.25% and due to rise to 10.5% in two fiscal years’ time, India will have to source 21% of its power from renewables in 2021-22 under the RPO regime and a compliance unit was established by the Ministry of New & Renewable Energy last year to ensure adherence.

India has set a target of achieving 175 GW of renewable energy generation capacity by 2022. At a recent BRICS energy ministers meeting in Brasilia, minister of power RK Singh announced India’s installed clean energy capacity is 83 GW, with a further 31 GW under construction and 35 GW under bidding.