Govt extends transmission charge waiver for solar, wind power till 2022

The government has extended the waiver of inter-state power transmission charges and losses for the solar and wind power projects commissioned till March 31, 2022, with a view to giving a boost to clean energy sources. Earlier, the waiver was available to solar and wind power projects commissioned till December 31, 2019, and March 31, 2019, respectively.

The waiver was available for a period of 25 years from the date commissioning of the project. "For generation projects based on solar and wind resources, no inter-state power transmission charges and losses will be levied on a transmission of the electricity through inter-state transmission system for sale of power by such projects commissioned till March 31, 2022," according to an order issued by the power ministry.

The waiver will be available to these projects for 25 years from the date of commissioning provided the developers sign power purchase agreements with entities, including discoms, for sale of power for compliance of their renewable purchase obligation, the order said.

The order also provides that the waiver would be available to only those projects which are awarded through competitive bidding process according to the guidelines issued by the central government. Earlier the incentive was not available to firms other than power distribution companies. Thus, other entities procuring clean energy from these projects were at a disadvantageous position. Now they can also avail the benefit.

It also provides that these new conditions for waiver of transmission charges and losses irrespective of purchasing entity will be applied prospectively, the order dated February 13, 2018, said. The order assumes significance in view of India's ambitious target of having 175 GW of renewable energy capacities including 100 GW of solar and 60 GW of wind energy. At present, India's installed renewable generation capacity is 62.84 GW excluding large hydro projects above 25 MW.

The central government has planned to auction 40 GW of solar energy capacities and 20 GW of wind projects in 2018-19 and 2019-20 to meet the tall order.