The National Solar Energy Federation of India (NSEFI) has asked the Ministry of New and Renewable Energy (MNRE) to extend the waiver of Interstate Transmission System (ISTS) charges and losses for renewable energy projects.

The NSEFI is an umbrella organization of all solar energy stakeholders of India. It suggested that the deadline should be extended immediately by a year in light of the ongoing COVID-19 pandemic. The waiver currently applies for all solar and wind power projects commissioned before December 31, 2022.

In November 2019, the Ministry of Power announced the extension of the waiver on ISTS charges and losses on the transmission of electricity generated from solar and wind energy projects. It said these charges would be waived as long as they are commissioned before December 31, 2022. This deadline was revised from March 31, 2022, previously.

The aim behind the waiver of inter-state transmission charges and losses is to encourage wind and solar energy capacity in the country, particularly achieving the target of 175 GW by 2022.

The federation also stressed the importance of the waiver for the future of the country’s renewable energy sector, given the circumstances. It noted that the waiver of ISTS charges would effectively equate to the socialization of costs among all market participants in a fair manner rather than being borne by just the purchaser of renewable power.

“Further, waiver of ISTS charges on solar and wind capacity commissioned up to December 2022 is largely perceived as a potent tool to encourage setting up of the projects in states that have a greater resource potential and availability of suitable land. It also helps in creating a pan-India renewable power market, as the generation in excess of the state’s own requirement could be transmitted to the states having low resources, without additional financial burden,” noted NSEFI in its letter.

However, due to COVID-19, the planning in terms of capacity addition, development pipeline, and execution on the ground has been affected and is expected to get further delayed. This delay is impacting all stakeholders – transmission system developers, renewable independent power producers, and bidding entities added the letter.

Considering this, it also proposed for the waiver of ISTS charges to be linked to a bidding mechanism for three years from the date by which the country’s 175 GW target capacity is allocated by agencies of the state and central governments.

The ongoing pandemic has led to unprecedented circumstances for the renewable industry in the country. There have been a plethora of announcements by the government to tackle the issues surfacing for the industry. Track all the latest updates related to COVID-19 here.

Mercom India hosted a webinar on key trends shaping the Indian solar market, especially in the light of the ongoing pandemic and the unprecedented challenges faced by the stakeholders. To listen to a recorded version of the full webinar, click here.