Free transmission of renewable electricity in India brings ‘short-term’ benefit to PV developers


Indian government plans to waive transmission charges for electricity coming from renewable energy sources will benefit some PV developers in the “short term”, according to an Indian market consultant.

Jasmeet Khurana, senior consulting manager at analyst firm Bridge to India, told PV Tech that the majority of renewable power in India is consumed in the same state where it was produced, but for India to reach its target of 60GW utility-scale solar by 2022, some energy must be transported to other states.

The country has already invested heavily in building green energy corridors to transport electricity from states that are rich in renewable resources to power-hungry states such as Delhi and Maharashtra.

Some states with strong renewable resources cannot absorb the higher capacity of intermittent power in local load centres. Furthermore, long distance transmission of power can help ease the pressure of land cost and availability for solar projects, because less fertile land can be used for generation of power, said Khurana.

He added: “The role of interstate transmission of power will become crucial as the penetration increases.”

He warned, however, that this free transmission incentive from the government is for the “short-term” and the green energy corridors must be seen as a long-term investment. PV developers, for example, should not expect to get the benefits of free transmission for the entire life of their projects, because the free transmission investment will need to pay for itself eventually.

Khurana cited the state of Delhi as a potential beneficiary from the new policy, because land in Delhi is expensive and scarcely available. The power distribution companies of Delhi plan to buy solar power from projects set up in states such as Madhya Pradesh and Rajasthan, a state which has already approved an order in August to reduce transmission charges by 50% for open access solar projects.

Khurana said: “Typically, they would need to pay around INR0.50 (US$0.008) to INR0.60/kWh for transmission. If the transmission charges are waived off, the cost for procurement of power can come down by around 8-9%. That will be a significant saving.”

He added that large private power consumers across India will also benefit from this saving, because they can source their power using open access from renewable resource rich states.

Vineet Mittal, vice chairman of PV developer Welspun Renewables, told PV Tech: “This step by the government could be a defining moment in the journey of renewable energy in India, particularly for the solar sector.

“Since transmission is a crucial element of the power infrastructure and amounts for a significant portion of the cost, this will be a huge incentives to developers. This will bring down the solar tariff, which is at the cusp of attaining grid parity, substantially down. Overall, it is a win-win situation for all the stakeholders.

“In the current grid and transmission infrastructure, transmission losses are a big challenge for both the developers and the distribution companies. Waiving off the transmission charges will help both immensely in the long run.”

Indian newspaper Economic Times reported today that energy minister Piyush Goyal announced the waiving of the transmission charges.

Goyal said: “We are bringing out a legal framework where all inter-state transmission of renewable energy will be at zero cost.

“I have already started with INR380 billion (US$5.8 billion) of green energy corridors. We are identifying more areas and are urging states to come with area where we can expand renewable energy so that more transmission grids can be made which the central government is doing.”

This article has been updated to include comment from Welspun Renewables.

26 September 2022
The WCPEC is the world’s biggest platform for PV research and development, offering a unique possibility of international exchange by combining the three largest and most prominent international PV conferences: the European PV Solar Energy Conference (EU PVSEC), the Photovoltaic Specialists Conference (IEEE PVSC) and the International PV Science and Engineering Conference (PVSEC). In 2022, Europe has the honour to host the 8th World Conference on Photovoltaic Energy Conversion, interchanging the prestigious EU PVSEC for this year, that is being held annually for more than 40 years. After being in place for more than a quarter of a century, the WCPEC, being held every four years, is firmly established among the global PV community as THE event for the greatest minds and experts in various PV sectors to meet and discuss, to exchange and network! The conference programme is coordinated by the European Commission Joint Research Centre.
27 September 2022
The demand for rooftop solar PV is soaring, driven by falling costs of the technology against energy crises that are gripping countries globally. But while an increasing number of households turn to solar to generate their own electricity, there is now a need for more specialist equipment, technologies and services to ensure the solar transition can reach as many customers as possible. Delivering these is now a major challenge for rooftop solar installers. This webinar will analyse the characteristics of the rooftop solar market, discussing how the products, logistics, installation and servicing of solar systems has evolved in line with consumer demands.
4 October 2022
Solar & Storage Finance USA, the only event that connects developers to capital and capital to solar and storage projects, will be back in November 2022.
11 October 2022
RE+ Florida returns in 2022. Solar & Energy Storage Florida is now RE+ Florida! This premier event for the Sunshine State will return October 11-12, 2022 in Miami.
11 October 2022
PV CellTech Extra will be held as a series of live webinars and on-demand sessions on 11-13 October 2022. We'll be taking a slightly further forward-looking view at the technologies and roadmaps for new cell architectures set to dominate mass production during 2023-2025 with special emphasis on the potential timelines for technologies beyond the single-junction cell design, including perovskite and hybrid concepts.
13 October 2022
The 2022 ACORE Grid Forum is a one-day event that convenes regulators, renewable, storage and transmission companies, and other leading grid experts in Washington, D.C. Speakers will examine the roles of administrative orders and actions, infrastructure policy, regional and state developments, and private sector strategies on the path to a carbon-free grid.

Read Next

September 23, 2022
India’s government has approved the second round of the production-linked incentive (PLI) scheme to incentivise domestic solar PV module manufacturing.
PV Tech Premium
September 23, 2022
Plans for a temporary revenue cap on solar PV assets across the European Union (EU) could dent investor confidence in renewables, experts have warned, amid concerns that individual member states may be able to set lower caps specific to different technologies.
September 23, 2022
Solar accounted for half of all global power generating capacity added last year, with 182GW deployed, a 25% increase on 2020, according to a report from BloombergNEF (BNEF).
PV Tech Premium
September 23, 2022
Community solar in the US is projected to grow substantially over the next decade and represents a means of expanding access to underserved communities who are being left out of the energy transition. Sean Rai-Roche explores the drivers of community solar and what obstacles need to be overcome to support its rollout.
September 22, 2022
The RE+ tradeshow has been full of hope, excitement but also short-term questions as the industry considers the significance of the IRA.
PV Tech Premium
September 22, 2022
The war in Ukraine, approaching its eighth month, is having an extremely detrimental effect on the country's solar sector.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
September 27, 2022
15:30 AEST (UTC +10)
Solar Media Events
October 4, 2022
New York, USA
On-Demand Webinars, Solar Media Events
October 11, 2022
Virtual event
Upcoming Webinars
October 18, 2022
10am (EDT) / 4pm (CEST)