India today is home to the one of the World’s largest synchronized high voltage transmission network. While transmission is at the centre of our country’s energy evacuation and energy access, it also has a unique contribution to India’s energy transition journey.
Through India’s Inter State Transmission Network (ISTS), one can seamlessly relay renewable energy (RE)anywhere to meet the demand across State boundaries.
An important enabler to India’s rapid adoption of solar and wind across the country has been the 100 per cent waiver of charges for projects connected to India’s Inter State Transmission System (ISTS) network since 2016, which has helped in decreasing the affective tariff rates of the projects.
As a result, today, India’s solar installations stand at 87.2 GW and while wind capacity is around 47 GW as of July 2024, increasing from 5.65 GW and 5.50 GW respectively in March 2016. The ISTS waiver has also been extended to projects connecting to ISTS and serving commercial and industrial (C&I) consumers across the country.
This ISTS waiver is set to expire on June 30, 2025. RE projects will incur 25 per cent of the applicable ISTS charges if they are commissioned between July 1, 2025 and June 30, 2026 which will increase by 25 per cent annually and reach 100 per cent of charges on all RE projects commissioned after July 1, 2028.
The Indian RE industry, however, wants the government to extend this waiver till 2028.
The Centre announced extending the waiver for green hydrogen until 2030, offshore wind until 2032 and relaxed the waiver for all pump storage projects that have been awarded until June 2025. Here’s why it is a logical choice to extend the waiver beyond June 2025 for solar and wind projects.
Transition from Turbulence
Between 2020-22 Covid induced timeline delays followed by legacy issues on generation and evacuation infrastructure, availability of land, Right of Way (ROW), permit issues, and a continued spell of supply chain disruptions were just some of the many challenges that the industry had to witness.
As we settle into more certain times, the next five years are very crucial in India’s energy transition journey.
The extension of the ISTS waiver aligns with the fundamental principle of promoting efficient inter-State transmission of RE from resource-rich States to high-demand load centres.
By socialising the cost of creating transmission infrastructure in RE-rich wastelands, the overall expenditure is minimised compared to the costs associated with developing similar projects in high-density population areas. This will also help States which do not have sufficient solar or wind resources to realise their mandatory Renewable Energy Purchase Obligations.
India’s 500GW RE target of 2030 warrants us to achieve a strike rate of 4GW per month to achieve this target in the next 76 months.
In other words, the next six years will witness more RE capacity addition than the conventional power generation installed within the first 60 years of our independence. Apart from accelerating the pace of installations, India will also witness a steep growth in renewable energy projects delivering firm, dispatchable renewable energy (FDRE) capacities.
Two weeks ago, in a historic moment, the country witnessed an all-time low tariff of ₹4.98/unit in SECI’s FDRE bid. This can be seen as a sign of things to come.
The government launched a ground-breaking policy push to help industrial and commercial establishments in their journey towards decarbonization through Green Energy Open Access (GEOA).
Notified in 2022, GEOA allows any consumer to procure green energy via open access. The limit has been reduced from 1 MW to 100kW thereby giving every establishment in India a shot at accessing affordable Green Power.
ISTS waiver is a big enabler for rapid RE deployment.
The writer is CEO, National Solar Energy Federation of India