Solar power projects will be exempted from interstate transmission charges till the end of December 2019, making it feasible to compete with thermal power.
The decision was taken by the ministry of power in consultation with the ministry of new and renewable energy (MNRE) and other stakeholders since imposition of charges would have raised cost of using solar power from another state by Rs 1-2.50 per kwH, depending on the distance it is transmitted and voltage at which it is supplied.
An order signed by Jyoti Arora, joint secretary in the ministry of power, said, “For generation projects based on solar resources, no interstate charges or losses will be charged for use of the interstate transmission system …till December 31, 2019.”
Exemption period was due to end on June 30. Solar tariffs have been falling steeply in recent years, touching an all-time low of Rs 2.44 per kwH at Rajasthan’s Bhadla solar park auction in May, very much on a par with thermal power But imposition of interstate transmission charges would have affected capacity to compete.
There was apprehension among solar developers that given the rapidly falling solar tariffs in successive auctions, the government might no longer consider solar power deserving of such subsidy support.
Even though solar tariffs have come down sharply, removing the waiver does not make sense at this stage as the original policy objective is still far from being met,” said Jasmeet Khurana, associate director at solar consultancy Bridge to India.
The last revised tariff policy of the Centre, announced in January 2016, had provided that “in order to further encourage renewable sources of energy, no interstate transmission charges or losses may be levied for such period as may be notified by the Central government on transmission of electricity generated from solar and wind sources.”
It is only now that power procurers have started to use the interstate transmission route to source solar power,” said Khurana.
The Delhi Metro Rail Corporation (DMRC), for example, signed an agreement in April to draw most of its daytime power needs from the 750 MW ultra mega solar power project – three plants of 250 MW each – being built at the Rewa solar park, Madhya Pradesh.