Power producers Has requested the government to continue exemption on inter-state transmission fee for renewable energy to 2030 to help the clean energy to root more deeply in India’s economy. A counseling meeting was held on February 5 under the chairmanship of New and Renewable Energy Minister Pralhad Joshi, in which Wind Independent Power Producers Association (WIPA) and other associations shared their concerns and suggestions. Sources aware of the case said that the main demand of the companies was to increase the discount on the inter-state transmission system (ISTS) fee, which is scheduled to end on June 30 this year. Renewable energy sector companies requested MNRE to increase the ISTS exemption by 2030 to promote investment in this sector and assist India’s ambitious energy change targets.
Fee waiver for 25 years on green energy
Currently, the fee has been waived for 25 years for the green energy projects such as solar, wind and hybrid and battery energy and battery energy and pump storage. The current ISTS exemption helps to avoid renewable energy developers to avoid a fee of Rs 0.4-1.8 per unit, which takes from power producing state to consumption centers. Sources said that this is a large part of the total fee. Sources said that if the ISTS exemption is not carried forward, this will increase the fee significantly and will not be competitive compared to other sources such as electricity coal produced from renewable sources.
Purchase cost will also increase
He said that this will also increase the purchase cost of power distribution companies. People of the industry believe that if the exemption ends in June 2025, many allocation letters (letter of award) will not be converted into power procurement agreements (PPAs). On the other hand, the cost of increasing discounts is nominal while the benefits are very high. This will help the power distribution companies (discoms) to sign a 40-90 paise per unit.
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