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  1. Government extends transmission charge waiver period for renewables

Government extends transmission charge waiver period for renewables

The government has extended the window to avail transmission charge waivers for wind and solar projects by three years.

By: | New Delhi | Published: February 16, 2018 2:34 AM
solar projects, wind projects, government, ppa Only projects awarded through competitive bidding, and with power purchase agreements (PPA) are eligible.

The government has extended the window to avail transmission charge waivers for wind and solar projects by three years.

Until now, inter-state transmission charges were foregone for wind projects commissioned till March 2019 and solar plants set up till December 2019 for 25 years.

According to the latest order approved by renewable energy minister RK Singh, solar and wind projects commissioned till March 2022 can use the inter-state transmission system (ISTS) for free. The other conditions for availing the waiver remain the same.

Only projects awarded through competitive bidding, and with power purchase agreements (PPA) are eligible.

Transmission charges add about Rs 0.20–0.50 per unit to every unit of thermal power. The policy of waiving this charge for renewables was designed to make solar and wind more attractive for cash-strapped electricity distribution companies (discoms).

The move is expected to further encourage the renewable energy sector, currently buoyed by the anticipating of upcoming surge in renewable auctions after a brief lull.

About 12,000 MW of wind and solar auctions are expected in remaining FY18.

To attain 175 GW of installed renewable capacity by 2022, the government has charted a trajectory to auction 40 GW of wind and solar generation units by FY20, leaving a margin of two years to commission projects within the deadline.

New investments in clean energy in the country slipped by about 20% to $11 billion in 2017, according to Bloomberg New Energy Finance, as investors were upset about discoms reneging older PPAs after the discovery of lower solar and wind tariffs in recent auctions.

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