Mr. Piyush Goyal, Minister for New and Renewable Energy, announced last week that the government plans to waive interstate transmission charges for electricity generated by renewable sources (refer). This waiver was earlier included in the proposed amendments to the country’s existing tariff policy of 2005 (refer), but the amendments are yet to be approved. However, for speedy promotion of renewable energy projects, the central government is actively moving to implement amendments such as the waiver of interstate transmission charges that are under its control.
- To meet the 60 GW of utility scale solar target, interstate power transmission is essential and needs to be encouraged.
- Waiver of interstate transmission charges will allow developers to install solar projects in states with cheaper land (wasteland) and higher irradiation.
- The grid infrastructure will need to be strengthened to evacuate power. Waiver of transmission charges is a positive short term support for the sector but it is more important to make the necessary investment commercially viable for sustainable growth of the sector.