Here is what solar energy federation wrote to MNRE on ISTS charges

The National Solar Energy Federation of India (NSEFI) has reportedly written a letter to the Ministry of New and Renewable Energy (MNRE) requesting for extension of the waiver of inter-state transmission system (ISTS) charges and losses for renewable energy projects in wake of the COVID-19 pandemic.

NSEFI’s letter to MNRE Secretary notes “The waiver of ISTS charges and losses that have been allocated as per competitive bid guidelines, having a sunset date of December 2022, should be immediately extended by a period of 12 months to account for the disruptions on account of COVID 19 pandemic.”

NSEFI added “due to the pandemic, the planning in terms of capacity addition, development pipeline and execution on ground is affected and is expected to get further delayed. And this delay is impacting all stakeholders including transmission system developers, renewable IPPs and bidding entities.”

The apex solar body further noted “We also propose that the waiver of ISTS charges actually be linked to the bidding mechanism for a period of 36 months from the date by which 175 GW capacity gets awarded or allocated by bid conducting agencies of state and central government.”

According to ET, back in September 2016 the Ministry of Power in its order notified the waiver under the Tariff Policy, 2016. It had also extended the applicability of this scheme for projects commissioned till 31 December 2022 in a separate Order issued later.

The publication notes the waiver on solar and wind capacity commissioned up to December 2022 is largely perceived as a potent tool to encourage setting up of the projects in states that have a greater resource potential and availability of suitable land.

The letter further said “It also helps in creating a pan-India renewable power market, as generation in excess of the state’s own requirement could be transmitted to the states having low resources, without additional financial burden.”

According to NSEFI, the waiver of ISTS charges is, in effect, socialisation of cost among the market participants, instead of being borne by the purchaser of the renewable power.

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