Indian States Agree To Abolish Charges On Renewable Energy Transmission

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India plans to have an installed renewable energy capacity of 175 GW by March 2022. But this target cannot be achieved without a widespread transmission network, as not all Indian states are equally blessed with renewable energy resources.

Last month, the Indian Minister for Power, Coal, and Renewable Energy announced that his department is planning to remove the charges levied on inter-state transmission of electricity from renewable energy projects.

This move is critical for the implementation of one of the Government’s most ambitious programs. The Government aims to set up 20 GW solar power capacity through 25 ultra mega solar power projects across several Indian states. Power from these projects will have to be supplied to other states as well, since all states have a solar power purchase obligation, but not all have the resources to meet that obligation through in-state generation.

According to media reports, 9 states have communicated their willingness to abolish a long list of charges currently levied on inter-state transmission. These include wheeling, cross-subsidy, banking, and other charges. 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.

India has required the target to have a 40% share of renewable energy in the country’s installed power capacity by 2030 in the Intended Nationally Determined Contribution to the United Nations. The Government also has a target to have 15% share of renewable energy in total power consumption by 2022, this will include at least 3% specifically from solar power. To achieve this target, the Government has already launched the ‘Green Energy Corridors’ project that will implement a dense network of new transmission lines dedicated for electricity generated from renewable energy projects. Since this new grid will be spread all across the country, it is essential that all states have a uniform policy to promote uptake of electricity generated from renewable energy projects.

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