The Centre is considering a one-time relief package for nearly 45 gigawatts (GW) of renewable energy (RE) projects awaiting power purchase agreements (PPAs), with the Ministry of New and Renewable Energy (MNRE) proposing transmission charge waivers, battery storage support, regulatory relaxations and flexible connectivity norms to revive the stalled green energy capacity.

One of the key proposals is a one-time 100% waiver of interstate transmission system (ISTS) charges for all pending projects if Power Supply Agreements (PSAs) or PPAs are signed within three months of the package’s notification. A second option under consideration is waiving inter-state transmission charges as per regulations, plus an additional 25% waiver.

The package also mandates deemed Renewable Purchase Obligation (RPO) and Renewable Consumption Obligation (RCO) compliance for discoms from the date of signing of PPAs if agreements are executed within three months. To reduce regulatory delays, deemed tariff adoption will be facilitated within 45 days if state regulators take no action.

The move is aimed at salvaging these RE projects for which Letters of Award (LoAs) have been issued but PPAs are yet to be signed.

Power developers enter into PPAs with procurers, who in turn sign power supply agreements (PSAs) with electricity distribution companies (discoms).

The proposed package was prepared after a meeting with renewable energy developers held on May 6 under the chairmanship of the Adviser to the Prime Minister and attended by the Secretaries of the Ministries of Power and MNRE.

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“Adviser to PM suggested that MNRE may prepare a one-time relief package specific to such stranded RE projects,” the ministry said in a note reviewed by FE.

The draft package groups the proposed measures into two broad categories — “Demand-side facilitation measures aimed at making PSA execution more attractive to DISCOMs and End-Procurers” and “Supply-side resolution options providing developers with clearly defined pathways to resolve their LoA status.” “All measures are proposed without direct fiscal or subsidy support from the Central Government,” the note stated.

The ministry also proposed that projects delayed because of non-readiness of transmission infrastructure may continue to remain eligible for ISTS waiver benefits based on the original scheduled commissioning date (SCD). Another proposal allows projects tendered under ISTS-connected frameworks to connect to State Transmission Utility (STU) networks where power is intended to be consumed within the same state.

To address discom concerns regarding grid balancing and non-solar hour supply, the package proposes allowing standalone solar projects to integrate two-hour Battery Energy Storage Systems (BESS) under Section 62 tariffs.

“DISCOMs’ reluctance to sign PSAs stems from concerns about the ability of vanilla solar projects to fulfil their system requirements,” the proposal noted. “Enabling 2 hours BESS with the Section 62 tariff can address such operational concerns without any change in the RE project configuration or tariff.”

“In several cases, DISCOMs are reluctant to procure power through the ISTS route due to additional transmission charges and system costs,” the proposal said, adding that STU connectivity could “reduce landed power cost, improve transmission utilisation efficiency, and make pending RE procurement more commercially attractive for states.”

“Regulatory delay/denial in SERC tariff approval is a frequently reported source of pendency in PSA execution,” the note stated. “Deemed tariff adoption will directly reduce regulatory processing time.”

On the supply side, developers holding stranded LoAs would be required to choose among three options — cancellation of LoAs without surrendering connectivity, milestone extensions with graded milestone extension charges (MEC), or penalty-free surrender of connectivity along with cancellation of LoAs.

For commercial operation date (COD) delays, the package proposes extension charges of ₹3,000 per MW per day for the first six months, escalating progressively and rising to ₹6,000 per MW per day for months 10-12.

In parallel, MNRE is actively pursuing the issue of stranded PPAs with states, the ministry of power and other concerned ministries, following which the proposed one-time relief package is considered to revive nearly 45 GW of renewable energy projects awaiting power sale agreements.

The move comes as India’s installed non-fossil fuel capacity has risen sharply from around 81 GW in 2014 to nearly 288 GW currently, while solar capacity alone has expanded from just 2.8 GW to around 155 GW during the same period.