Power Producers Urge Govt To Extend ISTS Waiver For Renewable Energy Until 2030

(MENAFN- KNN India) New Delhi, Feb 17 (KNN) Power producers have formally requested the government to extend the waiver on inter-state transmission charges for renewable energy projects until 2030, citing the need to strengthen clean energy adoption across India's economic landscape.

The matter was discussed during a consultative meeting on February 5, chaired by Minister for New and Renewable Energy Pralhad Joshi, where the Wind Independent Power Producers Association (WIPPA) and other industry associations presented their concerns.

The current waiver, set to expire on June 30, 2025, applies to solar, wind, hybrid projects, and battery energy and pump storage projects for a 25-year period.

Under the existing framework, renewable energy developers benefit from savings of Rs 0.4-1.8 per unit in transmission charges when transferring electricity from production states to consumption centers.

Industry representatives argue that discontinuing the waiver would significantly increase tariffs, potentially making renewable energy less competitive against conventional sources like coal and raising procurement costs for electricity distribution companies.

The financial implications of the waiver extension appear manageable, according to official data. While total transmission charges without the waiver amount to approximately Rs 52,691 crore annually, the current waiver accounts for only about 7 percent of this sum at Rs 3,602 crore.

Industry stakeholders suggest that maintaining the waiver could facilitate the signing of pending 40 GW power purchase agreements (PPAs), offering distribution companies savings of 60-90 paise per unit.

The decision holds particular significance given India's transmission infrastructure challenges in meeting renewable energy targets.

Currently, only Madhya Pradesh is projected to have spare capacity in the future, while major renewable energy states like Rajasthan and Gujarat face constraints.

The meeting also addressed concerns about delays in converting letters of award (LOA) to PPAs, with new guidelines proposed to complete this process within one year.

The heads of the Ministry of New and Renewable Energy (MNRE) and Ministry of Power are expected to meet soon to determine the path forward regarding the ISTS waiver extension.

While some stakeholders have suggested considering a phased reduction of these waivers to address cost socialisation concerns, others warn this could impede PPA formation due to increased renewable energy procurement costs.

(KNN Bureau)

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