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					</table>As the deadline for the Inter-State Transmission System (ISTS) charges waiver approaches, additional substations are critical to ensure the smooth facilitation of renewable energy projects.
The government has <a href="https://www.mercomindia.com/no-ists-charges-solar-wind-december-2022" target="_blank" rel="noopener">extended</a> the ISTS charges waiver deadline multiple times since 2019. The latest extension <a href="https://www.mercomindia.com/waiver-ists-charges-solar-wind" target="_blank" rel="noopener">applies</a> to solar, wind, renewable energy hybrid, pumped hydro storage, and battery energy storage systems commissioned by June 30, 2025. This waiver will remain in effect for 25 years.
The objective behind the waiver of ISTS charges was to encourage renewable capacity addition by reducing the cost of generation to achieve the country&#8217;s non-fossil fuel energy capacity of 500 GW by 2030. The Ministry of Power also <a href="https://www.mercomindia.com/ists-waived-offshore-wind-green-hydrogen-ammonia" target="_blank" rel="noopener">broadened</a> the waiver&#8217;s coverage to encompass hydropower projects, offshore wind, green hydrogen, and green ammonia projects.
According to a developer, &#8220;The Central Electricity Regulatory Commission has nine separate transmission zones with the resultant ISTS charges for renewables ranging from about ₹1 ($0.012)/kWh to ₹2.30 ($0.028)/kWh. So, without the ISTS charges waiver, some projects may become unfeasible.&#8221;
While the initiative and relief provided by the extension are commendable, the transmission infrastructure challenges, especially the shortage of substations, are a huge concern for projects under development. If the projects are delayed due to these constraints, the developers could miss out on the waiver, and the projects could end up being economically unviable.
The developers are looking for proactive measures by the government to address the infrastructure gap before it impacts the projects that are bid factoring ISTS charges waiver.
A renewable energy developer told Mercom, &#8220;For projects that are under development but are not commissioned by the 2025 deadline solely due to issues related to transmission or sub-station infrastructure, developers will have the option to invoke force majeure.&#8221;
However, some stakeholders have also pointed out that the risk of not commissioning the projects is far higher than not qualifying for the waiver of ISTS charges.
The Central Transmission Utility (CTU) regularly releases a list of available substations and those already engaged.
For the projects lined up for construction, the developers need to regularly check the available substations and purchase land closer to those substations to avoid challenges.
The developer added, &#8220;Despite approximately 40 GW of available transmission capacity, these resources are in states with relatively lower solar irradiation. Developers will have to consider the lower energy generation in these locations before participating in bids to avoid quoting unrealistic lower tariffs.&#8221;
According to another developer, &#8220;During the long-term access (LTA) regime, the power generators were to pay the ISTS charges. This led to a large majority of the renewable energy capacity being concentrated in regions like Rajasthan and Gujarat, causing huge grid congestion. Now, in the GNA regime, the ISTS charges are levied on the beneficiaries. For projects being developed under competitive bidding by implementing agencies, the charges will act as a deterrent for ISTS-connected projects. The government is implicitly ensuring renewable energy projects are developed through state-level bids, especially in states where the renewable energy uptake has been low and where there is no grid congestion, like in Bihar, Uttar Pradesh, Punjab, and Haryana, among others.&#8221;
Impact on green energy open access projects
For green energy open access projects, the waiver of ISTS charges results in lower project costs, translating to attractive tariffs for businesses procuring power from ISTS-connected green open access projects.
Subrahmanyam K V, Vice President of Business Development of <a href="https://www.radiancerenewables.com/" target="_blank" rel="noopener">Radiance Renewables</a>, said, &#8220;As of February 2024, there is a demand for GNA connectivity by consumers totaling approximately 7 GW, out of a total project connectivity of 12.5 GW &#8221;
He pointed out three pressing problems leading to the substation shortages. He said, &#8220;There exists a disparity between planned capacity and actual implementation on the ground. It&#8217;s imperative to strategically position substations near areas abundant in resources, facilitating the establishment of co-located solar and wind projects. Given India&#8217;s rich solar and wind resources, the emphasis should be on pursuing hybrid power projects wherever feasible. Co-located projects also offer reduced transmission charges compared to standalone ones. Furthermore, the absence of a standardized process for GNA regulations in each state for NOC requisition and scheduling underscores the need for inter-state collaboration to streamline procedures &#8221;
Another leading developer emphasized that ISTS allows green power to be delivered through open access to states lacking favorable policies or availability of land.
For example, although Uttar Pradesh is known for the high demand for green energy by consumers, developers face challenges of unfavorable conditions compared to states like Maharashtra or Karnataka, which have suitable land, solar irradiation, and supporting policies.
In such scenarios, the exemption of ISTS charges proves beneficial for both consumers and developers, allowing access to green power at a reasonable cost. Without this exemption, consumers would be compelled to purchase green power at higher rates than those offered by DISCOMs, making green power procurement unfeasible.
With the tight timeline of June 2025 looming for setting up all transmission projects, an extension is crucial, as not all projects can be completed within this timeframe.
Currently, Karnataka, Maharashtra, Gujarat, Tamil Nadu, Rajasthan, and Uttar Pradesh continue to remain preferred states for ISTS projects.
Additionally, stakeholders have highlighted several challenges encountered during the execution of green open access projects. One notable issue is the involvement of numerous nodal agencies in the approval process, which creates obstacles in securing timely and seamless approvals.
Despite ISTS charges exemption for green energy open access projects notified by the central government, stakeholders have told Mercom they still must obtain approvals from both states involved, resulting in a cumbersome procedure.
Developers look forward to establishing a centralized &#8220;Open Access Cell&#8221; to streamline application processes and expedite approvals.
Extension of ISTS Waiver
Kannan Krishnan, Joint Managing Director of <a href="https://www.jakson-green.com/" target="_blank" rel="noopener">Jakson Green</a>, calling for an extension of the waiver, said, &#8220;Extending the ISTS charges waiver for another three years will undoubtedly serve as a catalyst for exponential growth within the industry. However, it&#8217;s evident that further infrastructure development, particularly the establishment of additional substations, is essential for the seamless execution of ISTS projects&#8221;.
&#8220;We believe an extension beyond 2025 will facilitate a smoother transition and sustained growth trajectory for the renewable energy sector. This extension will provide the necessary time for infrastructure alignment and foster an environment conducive to industry expansion and innovation.&#8221;
In Subrahmanyam&#8217;s view, granting a minimum extension of one year would aid round the clock renewable energy in an effective way. Without such an extension, consumers are left exposed to an open risk of transmission charges which can upset the project economics.
Given the ambitious industrial net zero targets, stakeholders are advocating for an extension until 2030 to facilitate more installations to meet these targets, akin to the extension already granted for green hydrogen and ammonia projects.
Mercom earlier <a href="https://cms.mercomindia.com/mahindra-susten-wind-solar-hybrid-project/" target="_blank" rel="noopener">reported</a> on how green energy open access developers want ISTS charges waived beyond June 2025

As ISTS Waiver Nears End, Developers Need Extension Amid Lack of Substations

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					</table>In Rajasthan, where the promise of renewable energy seems boundless, hurdles have emerged in the path of progress where a significant capacity of open access solar projects in the pipeline are at a standstill.
In the third quarter of 2023, when the open access installations in India <a href="https://www.mercomindia.com/solar-open-installations-added-in-q3-2023" target="_blank" rel="noopener">surged</a> by 36% quarter-over-quarter to 907 MW, Rajasthan ranked fifth for installations behind Maharashtra, Karnataka, Tamil Nadu, and Gujarat.
The bottlenecks have cast a shadow over the ambitious plans to harness Rajasthan&#8217;s vast renewable energy potential.
Insights from industry experts highlight critical challenges hindering open-access solar projects in Rajasthan. The limited availability and operational constraints of substations and environmental complexities unique to the state turn the open access solar landscape murky.
Dipanshu Gupta, AVP of Business Development at <a href="https://www.ibvogt.com/" target="_blank" rel="noopener">ib vogt</a>, said, &#8220;The primary impediment stems from the limited availability of sub-stations, with most of them already at full capacity. Furthermore, those under construction are anticipated to be operational only by December 2025. While the government has taken measures to facilitate ongoing development, it&#8217;s essential to acknowledge that the establishment of appropriate sub-stations is a time-consuming process.&#8221;
He also pointed to the land issue unique to the state. &#8220;Another significant challenge is the Great Indian Bustard (GIB) issue, wherein many projects find their project lands falling within GIB areas, causing disruptions and fostering a sense of hesitation among developers in aggressively pursuing and completing projects.&#8221;
Along with GIB, the usually cumbersome process of acquiring suitable land for renewable energy projects involves negotiations with multiple stakeholders, including local communities. Delays in securing land approvals not only add to project costs but also create uncertainties that can deter potential investors.
On the regulatory front, restrictive policies imposed by the Rajasthan Renewable Energy Corporation (<a href="https://energy.rajasthan.gov.in/rrecl/#/home/dptHome" target="_blank" rel="noopener">RREC</a>) pose significant constraints for project developers. The prohibition of group captive projects&#8217; registration limits the diversity of investment models available for renewables.
Rajasthan&#8217;s distribution companies (DISCOMs) have set a condition that energy consumption in group captive projects should align with the shareholding proportion, posing a significant obstacle to the expansion of open access solar projects.
This requirement contradicts the Electricity Rules, 2005, which stipulate that a developer needs to invest only 26% equity to attain captive status, with a minimum of 51% of the total electricity generated consumed for captive use in such projects.
DISCOMs have a distinct interpretation of the power offtake ratio, arguing that it should align with the shareholding.
In the group captive model, multiple offtakers are involved, and their combined equity typically amounts to 26%. As per the Electricity Rules, 2005, they are required to procure a minimum of 51% of power generated, up to a maximum of 100% of the project capacity. Open access solar developers then fund the remaining 74% equity to facilitate project development.
According to Mercom India Research&#8217;s various discussions with open access solar stakeholders in the state, it was identified that DISCOMs in Rajasthan often insist that developers must consume 74% of the power in line with their equity stake, which creates hurdles as these projects are designed to sell power to consumers. Consequently, DISCOMs delay approving new group captive projects, stalling the open access group captive market in the state.
A senior executive at an open-access solar solutions firm said, &#8220;The Rajasthan Electricity Regulatory Commission prohibits the registration of group captive projects, creating a significant constraint in Rajasthan&#8217;s energy landscape. Unlike progressive states like Uttar Pradesh, Haryana, Karnataka, and Chhattisgarh, Rajasthan faces a hindrance in its energy sector growth.&#8221;
&#8220;Also, around 90% of the projects established in the state are tailored for the bidding process, presenting unique challenges and delays. Advocating for a policy shift to permit group captive projects can catalyze installations, similar to the positive change witnessed a year ago for normal captive projects. Revisiting the restriction on projects with multiple off-takers can further invigorate the market,&#8221; the executive said.
The state recently <a href="https://www.mercomindia.com/rajasthan-renewable-policy-65-gw-solar-fy30" target="_blank" rel="noopener">unveiled</a> its Renewable Energy Policy 2023, aiming to establish 90 GW of renewable energy projects by the financial year 2029-30. Solar projects will constitute 65 GW, wind and wind-solar hybrid 15 GW, hydropower, pumped storage projects, and battery energy storage system projects 10 GW.
One of the less welcomed regulations is that renewable energy projects supplying power to entities other than DISCOMs will be charged with facilitation charges or will be mandated to supply 7% of the power to DISCOMs at no cost.
The facilitation charges are ₹50,000 (~$600)/hectare per year for projects commissioned on or after the policy&#8217;s commencement throughout the project&#8217;s lifespan.
A seasoned renewable energy professional from a Gujarat-headquartered company said, &#8220;The introduction of facilitation charges was a strategic move aimed at curbing excessive power exports from the state. It is reasonable to implement such measures, considering that despite Rajasthan&#8217;s vast solar potential, the state has encountered energy shortages in recent times. Initially, the proposed charges were even higher. However, the new Renewable Energy Policy has re-evaluated, resulting in a reduction of these charges to benefit developers&#8217; financial interests.&#8221;
&#8220;Nevertheless, when compared to other states, it is undeniable that these regulations could pose a hurdle for the initiation of projects within the state,&#8221; he further added.
However, in light of optimism for utility-scale and C&amp;I sector, an executive from <a href="https://www.enelgreenpower.com/" target="_blank" rel="noopener">Enel Green</a> said, &#8220;The policy&#8217;s most significant provision lies in the notable reduction of the facilitation charge imposed on developers by DISCOM. This translates to savings, estimated at ₹150,000 (~$1,805)/MW per year under the current policy, a considerable improvement compared to its predecessor. This adjustment serves as a catalyst for promoting inter-state electricity transactions and will be particularly advantageous for utility-scale developers establishing projects in Rajasthan. Furthermore, the amended policy is poised to drive down the overall project cost for C&amp;I ventures, consequently leading to a reduction in tariffs.&#8221;
Stakeholders expressed that navigating through regulatory requirements, securing necessary approvals, and adhering to compliance standards has been time-consuming, leading to delays that impact the entire project timeline.
While the state&#8217;s commitment to renewable energy transition remains unwavering, addressing these challenges is crucial to unlock Rajasthan&#8217;s full potential as far as open access projects are concerned.
Resolving these issues requires a collaborative effort from policymakers, regulatory bodies, and industry stakeholders to streamline processes, expedite infrastructure development, and foster a more conducive environment for open-access pipeline projects in the state.

Rajasthan Struggles to Harness Solar Potential as Open Access Projects Face Setbacks

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					</table>The Punjab State Power Corporation (<a href="https://pspcl.in/" target="_blank" rel="noopener">PSPCL</a>)  has invited bids to set up 31.37 MW rooftop solar power projects at various office buildings, 66 kV grid substations, hydel projects, and thermal projects of PSPCL at different locations under seven packages.
The last date for the submission of bids is March 14, 2024. Bids will be opened the next day.
The bidding process pertains to seven packages, each associated with specific aggregate capacity and locations as indicated in the table below:
<img loading="lazy" decoding="async" class="aligncenter wp-image-63381 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/02/Picture2-1.png" alt="" width="653" height="493" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/02/Picture2-1.png 653w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/02/Picture2-1-300x226.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/02/Picture2-1-650x491.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/02/Picture2-1-624x471.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/02/Picture2-1-600x453.png 600w" sizes="(max-width: 653px) 100vw, 653px" />
Bidders must provide an earnest money deposit equal to 2% of the project cost, with a maximum limit set at ₹2 million (~$24,087.08). Except Package 7, whose limit is set to ₹800,000 (~$9,634.51)
Upon the successful commissioning of the project, PSPCL will withhold 10% of the total project cost at the time of the final payment to the bidder. This amount will serve as performance security for maintenance.
The scope of work involves site survey, design, supply, erection, testing, and commissioning. It also involves providing a warranty and a five-year comprehensive maintenance contract for grid-connected rooftop solar projects.
In the context of this tender, the essential components of a grid-connected rooftop solar system include but are not restricted to the Approved List of Models and Manufacturers regulation-compliant mono-crystalline or bifacial solar modules in the required quantity, inverters/PCU and module mounting structures with a minimum ground clearance of 300 mm at the lowest point from the roof surface.
The e-tendering process for rooftop solar project installation, within the 100 kW to 500 kW capacity range, revealed a discovered rate of ₹50,072 (~$603.04)/kW, inclusive of GST.
Bidders should not be blacklisted by any agency under the direct or indirect control of central government.
They should have a track record of designing, supplying, installing, and commissioning grid-connected solar power projects with an aggregate capacity of not less than 1000 kW in the last three years from the bid submission date. Additionally, they must have completed at least one project of 50 kW or higher capacity commissioned before bid submission.
Bidders are required to submit a scanned copy of the commissioning certificate from the client or owner.
Only bidders meeting the minimum technical eligibility criterion will have their bids considered for the determination of the L-1 (lowest) price.
To meet the financial eligibility criteria, bidders must satisfy the specified minimum average annual turnover for each package. The requirements for each package are as follows:
<ul>
<li>Package no. 1: Minimum average annual turnover of ₹50 million ($602,158) and net worth of ₹25 million ($301,073).</li>
<li>Package no. 2: Minimum average annual turnover of ₹80 million ($963,435) and net worth of ₹40 million ($481,717).</li>
<li>Package no. 3: Minimum average annual turnover of ₹30 million ($361,300) and net worth of ₹15 million ($180,650).</li>
<li>Package no. 4: Minimum average annual turnover of ₹60 million ($722,601) and net worth of ₹30 million ($361,300).</li>
<li>Package no. 5: Minimum average annual turnover of ₹50 million ($602,158) and net worth of ₹25 million ($301,073).</li>
<li>Package no. 6: Minimum average annual turnover of ₹40 million ($481,726) and net worth of ₹20 million ($240,863).</li>
<li>Package no. 7: Minimum average annual turnover of ₹10 million ($120,434) and net worth of ₹5 million ($60,217).</li>
</ul>
The annual turnover, as indicated for each package, should reflect the financial performance of the bidder in any one of the last three financial years preceding the bid deadline..
If a vendor submits bids for multiple packages, they must meet the financial eligibility criteria for the combined value of all the packages in their price bids. Failure to do so will result in the rejection of all such bids during the evaluation phase.
December last year, PSPCL <a href="https://www.mercomindia.com/punjab-100-mw-solar-transmission" target="_blank" rel="noopener">invited</a> bids to set up 100 MW solar projects and the associated transmission system in Bathinda.
In October, PSPCL <a href="https://www.mercomindia.com/pspcl-floats-tender-power-from-ists-connected-projects/" target="_blank" rel="noopener">floated</a> a tender to procure 1 GW of solar power from interstate transmission system-connected projects.
Subscribe to Mercom’s <a href="https://mercomindia.com/product/india-solar-tender-tracker/" target="_blank" rel="noopener">India Solar Tender Tracker</a> to stay on top of the real-time tender activity.

Punjab Floats Tender for 31 MW Rooftop Solar Projects

The Energy Efficiency Services Limited (EESL), a joint venture between the public-sector units of the Ministry of Power and the central government, has issued a Request for Selection (RfS) to install 100 MW of solar power generating systems in the state of Maharashtra.
The EESL has called for bids for developing projects in the range of 1-2 MW or higher at different locations and sub-stations across Maharashtra.
The bid submission deadline is July 9, 2019. The techno-commercial bid opening date is also July 9, 2019.
This tender is in line with the advisory issued by the Ministry of New and Renewable Energy (<a href="https://mnre.gov.in/" target="_blank" rel="noopener noreferrer">MNRE</a>) <a href="https://mercomindia.com/mnre-issues-advisory-states-utilize-spare-space-near-substations-develop-solar-projects/" target="_blank" rel="noopener noreferrer">in July 2017</a> that addressed the utilization of empty land near pooling substations to allow for better usage of the transmission infrastructure.
The scope of the tender includes the design, engineering, supply, construction, installation, testing, commissioning, and operation and maintenance (O&amp;M) of the various systems starting from 1 MW capacity. The earnest money deposit (EMD) to be paid is ₹6.25 million (~$89,961) valid for 225 days from the date of techno-commercial bid opening.
Previously, the <a href="https://mercomindia.com/eesl-tender-100-mw-solar-maharashtra-andhra-jharkhand/" target="_blank" rel="noopener noreferrer">EESL</a> had floated a tender to set up 100 MW of solar projects across Maharashtra, Andhra Pradesh, and Jharkhand.
Then in <a href="https://mercomindia.com/eesl-solar-tender-160-mw-maharashtra/" target="_blank" rel="noopener noreferrer">December 2018</a>, EESL floated a tender for 160 MW of solar PV projects to be developed near pooling substations across the state of Maharashtra. <a href="https://mercomindia.com/energy-efficiency-services-limited-tenders-200-mw-solar-maharashtra/" target="_blank" rel="noopener noreferrer">In 2017</a>, EESL had issued another tender for 200 MW of solar projects to be developed near pooling substations in Maharashtra.
In an <a href="https://mercomindia.com/eesl-interview-ev-tender-on-hold/" target="_blank" rel="noopener noreferrer">exclusive interview with Mercom</a> last year, Saurabh Kumar, Managing Director of EESL, underlined the different ways in which this government organization has been on the forefront of implementing clean energy initiatives in the country.
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