MNRE Addresses Transmission Infrastructure Delays Facing Solar & Wind Developers

The ministry said that often renewable generators have to bear the cost burden for no fault of theirs

March 11, 2020


The Ministry of New and Renewable Energy (MNRE) has issued a memorandum to address the time gap between the commissioning of the transmission system and renewable energy (RE) generating projects.

The ministry has requested the Central Electricity Regulatory Commission (CERC) to look into MNRE’s suggestions regarding the ‘Sharing of Inter-State Transmission Charges and Losses,’ Regulations, 2019, which called for comments and suggestions in October 2019.

The Commission had proposed that the regulations will apply to all the designated inter-state transmission system (ISTS) customers, inter-state transmission licensees (ISTL), customers, inter-state transmission licensees (ISTL), national load despatch center (NLDC), regional load despatch centers (RLDCs), state load despatch centers (SLDCs), and regional power committees (RPCs).

The CERC had proposed that the transmission charges will be shared among the designated ISTS customers so that the yearly transmission charges are fully covered, and any adjustment on account of the revision of transmission charges are recovered, according to Mercom.

The MNRE has highlighted that there is a major issue regarding the time gap between the commissioning of the transmission system and renewable energy projects where the cost for transmission for the delay is to be borne by the generators even when they are not at fault. The MNRE has stated that most solar and wind developers are suffering due to the gap between the commissioning of the transmission system and renewable projects.

If the projects get delayed due to force majeure (unforeseeable circumstances), then the cost of delay in transmission is borne by the developer.  If the project is delayed due to force majeure and the transmission system is commissioned before the commissioning of the projects, then the cost of transmission during that period of delay should be socialized, the ministry has recommended. “Socialized” in this context means the charges need to be equally borne by the designated ISTS customers, including state transmission utilities and distribution licensees.

However, in case the projects get delayed due to reasons attributed to the developer, then the cost of transmission should be borne by the developer.

The MNRE has also emphasized that if the transmission system has been delayed and the renewable projects are already commissioned before time, then the cost of the power generation should also be socialized.

However, if the transmission system gets delayed due to any reason other than force majeure, then the concerned agency responsible for commissioning the transmission system will be accountable for the generation.

The lack of transmission infrastructure has been a major concern for solar and wind developers in the country. A PGCIL report states that with the expected doubling of electricity demand over the coming decade, India’s transmission and distribution system will also require significant expansion. A $200 billion (~₹13.8 trillion) investment program through 2030 would create the opportunity for India to establish an internationally connected smart grid capable of managing increased power demand and incorporating much greater diversity in electricity generation, including distributed rooftop solar and battery storage.