No Transmission Charges for the Use of ISTS Network by Solar and Wind Projects for 25 Years
The amended regulation will apply to projects commissioned between February 13, 2018, and March 31, 2022
The Central Electricity Regulatory Commission (CERC) has issued a notification for an amendment in the regulation for sharing of the inter-state transmission system (ISTS) charges and losses. The regulation was introduced in 2010 and has been amended six times.
According to the latest amendment in the Central Electricity Regulatory Commission (Sharing of inter-state Transmission Charges and Losses) Regulations:
“No transmission charges and losses for the use of ISTS network will be payable for the generation based on solar and wind power resources for a period of 25 years from the date of commercial operation.”
However, the benefit in transmission charges is contingent upon meeting several conditions.
Firstly, solar and wind projects should have been awarded through the competitive bidding process as per the guidelines issued by the central government.
Secondly, the commercial operation date (COD) for such projects should be between February 13, 2018, and March 31, 2022.
And finally, a power purchase agreement (PPA) should be signed with DISCOMs for the compliance of renewable purchase obligation (RPO).
This modification will come in to effect retrospectively from February 13, 2018.
A solar developer told Mercom, “There are two significant points in this order – the first point is that earlier, there was only a letter by the Ministry of Power on this subject and the industry was waiting for an official order by the CERC for this regulation to be implemented. Now, we have it. The earlier CERC order was valid until March 2019. Second point and a very positive one is that, in the earlier regulation, the waiver of transmission charges and losses for use of ISTS network was only extended to the distribution entities but now this waiver is extended to not just the distribution entities but all entities who need to fulfill renewable purchase obligations, be it private or government entities”.
Before this, the CERC had notified the fifth amendment in sharing of inter-state transmission charges and losses in December 2017 with the same provision that no transmission charges would apply for using the ISTS network.
However, the fifth amendment for benefit in transmission charges was applicable for any solar or wind project whose COD was December 2019. Now, the latest amendment has revised the date from December 2019 to February 13, 2018.
Recently, the CERC finalized the amended regulations for open access in interstate transmission and removed the ‘underutilization of transmission corridor’ as one of the criteria for revising the standing clearance. Now, the dispatch centers will comprehensively review the situation and do a prudence check while issuing the standing clearance to the applicant.
Nitin is a staff reporter at Mercomindia.com and writes on renewable energy and related sectors. Prior to Mercom, Nitin has worked for CNN IBN, India News, Agricultural Spectrum and Bureaucracy Today. He received his bachelor’s degree in Journalism & Communication from Manipal Institute of Communication at Manipal University and Master’s degree in International Relations from Jindal School of International Affairs. More articles from Nitin Kabeer