Renewable energy industry representatives have sought the waiving of a cross subsidy surcharge (CSS) levied by States on transmission.

In a letter to Minister of State (Independent Charge) for Power, Coal, Renewable Energy and Mines, Piyush Goyal, the Renewable Energy Welfare Society (REWS) has said that CSS is the main inhibitor for small investors to play their role in India’s clean energy vision. The letter noted that CSS is more than ₹3 per unit in some States and the cost per unit becomes even higher with the transmission and wheeling charges.

“Different States have different provisions of relaxation for RE but hardly any State has full exemption on both on wind and solar,” said the letter. “The CSS is an inhibitor to third party sale under open access from renewable energy projects…

“Due to higher CSS, the industry finds it difficult to buy power under open access from RE generators and is forced to buy it from the discoms at a relatively higher price.”

The letter also said reverse auctions in solar and wind have brought down the cost of electricity and constrained margins.

“Due to this, particularly in wind, many industry players feel that a very little capacity addition will take place in 2017-18-19,” it said.

“A large number of companies in the RE sector who collectively set up 5.5 GW of wind and around 3 GW of solar in 2016-17 will find it difficult to sustain themselves with only one business model, which is competitive bidding.”

Related Topics