The power ministry may consider at least a six-month extension beyond December 2022 for transmission charges waiver to solar and wind projects.
“The Ministry may consider extending the ISTS waiver for renewable energy projects by at least six months,” said the power minister R.K. Singh speaking at an interactive session organized by FICCI.
Originally open until the end of March 2022, the waiver was extended by nine months in November last year so that all solar and wind projects commissioned during that year will secure a 25-year exemption for the grid charges.
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).
Addressing CEOs at the session, Singh said power generation would have to be doubled.
He urged the industry to start adding capacity without waiting for bids to come out as RPO penalty will be made more stringent.
“The government is looking towards strengthening the local manufacturing units for solar instead of depending on neighbouring countries,” he added.
Alluding to reforms in the sector, Singh said that amendments in the Electricity Act are essential to make the sector viable and sustainable. The Minister urged the industry to communicate the importance of these reforms.
He added that the sanctity of contracts has to be maintained, and this applies to all parties involved, failing to do so will result in blacklisting of companies.
Ranjit Gupta, Chair, FICCI Renewable Energy CEOs Council, and Chief Executive Officer, Azure Power, said that the reforms in the Electricity Act and Tariff Policy are much needed as they will enable foreign investors to come to India. He added that the industry would push for the government’s initiative ‘Make in India’.
Gupta said that the renewable energy sector suffered less during Covid-19 crisis because of the government’s proactive steps.
Vipul Tuli, Chair, FICCI Power Committee, and Managing Director, Sembcorp Energy India, said that under the Minister’s leadership reforms in the power sector have been prompt, rapid and helpful. He added that the industry is also stepping up to the plate in response to the efforts made by the government.
Underlining issues of the sector, Tuli said that liquidity had been a challenge for the industry. The other problems are the absence of long-term bids and the challenges of environmental equipment for the power sector.
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