India To Simplify Inter-State Transmission Of Renewable Energy

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The Indian Government is looking to reduce the regulatory hurdles in achieving their highly ambitious renewable energy capacity addition targets.

The Indian Minister for Power, Coal, and Renewable Energy announced that the Government would soon remove the fee levied on transmission of power generated from renewable energy project between two states, a crucial step towards creating an “enabling and overarching framework” to make renewable energy viable for the common man, the minister added.

Currently, supply of power from one state to the other attracts a regulatory fee payable to the transmission utility. This significantly adds to the final cost of power for the end user, thus making this activity financial unattractive.

The Indian Government is looking to set up large-scale renewable energy projects across the country under its target to have 175 GW renewable energy capacity operational by 2022. This program would include setting up large-scale hybrid solar and wind energy projects, and since solar and wind energy resources are not distributed evenly across the country, most of these projects are expected to be concentrated in specific states.

To evacuate power from these states to others that are deficient in renewable energy resources, the Indian Government has started working on the ambitious Green Energy Corridors project. The project will set up transmission lines dedicated to renewable energy projects.

Removing regulatory charges may also have a cascading impact on the tariff bids quoted by private sector project developers in the upcoming solar power auctions. Companies looking to develop projects outside the scope of such auctions would likely benefit the most. Earlier this year SunEdison signed a 180 MW power sale agreement from a power plant located in Madhya Pradesh. The company shall benefit from the removal of the inter-state transmission charge as it is required to supply the power to a utility in Delhi, about 600 kilometres away.

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