India Waives Off Inter-state Transmission Charges For Renewable Energy

The Ministry of Power, under the central government of India, has confirmed that charges for inter-state transmission of renewable energy have been waived off.

The ministry had first proposed to remove the inter-state transmission charges last year and had asked the state governments to work on the proposal. Several states had expressed their willingness to abolish a long list of charges currently levied on inter-state transmission. These include wheeling, cross-subsidy, banking, and other charges.

The ministry has now announced that such charges shall be waived-off for solar power projects commissioned by 30 June 2017 and for wind energy projects commissioned by 31 March 2019.

Removal of these charges will directly impact the final cost of power at the consumers’ end. Such a move will also make renewable energy-based power attractive to large industrial and commercial consumers looking for low-cost consistent power supply.

Sources in the Ministry of New & Renewable Energy have been quoted as saying that these changes could bring in additional reduction of 10% in the solar power tariff bids which have hit a low of around US¢6.5/kWh.

The move is aimed at a more evenly distributed consumption of renewable energy across the country. Wind and solar energy resources in India are concentrated in certain regions; the removal of these charges shall enable project developers as well as state governments, with surplus renewable energy, to sell electricity to other states that are unable to meet their respective renewable purchase obligation.

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