Union Minister R K Singh said on Tuesday that the Ministry of Power may consider extending the exemption of charges for renewable energy projects from the Interstate Transmission System (ISTS) beyond 2022.
Last year, in November, the Ministry extended the exemption from ISTS charges for wind and solar energy projects by nine months until December 2022.
Under the waiver, all of these projects commissioned by December 2022 are eligible for exemption from ISTS charges and electricity transmission losses for a period of 25 years.
Initially, the exemption was provided for projects commissioned until 31 March 2022.
Power minister Singh said “his ministry may consider extending the ISTS waiver for renewable energy projects by at least six months", according to a statement issued by Ficci after a CEOs interactive session with the monster.
Industry bodies are pressing for an extension of at least one year beyond December 2022 following the pandemic of COVID-19.
Addressing the Interactive Session of the CEOs of the FICCI Renewable Energy Council and the FICCI Power Committee, Singh said that the power generation will have to be doubled, as stated in the statement.
He urged the industry to start adding capacity without waiting for tenders to come out, as the RPO penalty would be stricter.
The government is looking to strengthen local solar production units instead of depending on neighboring countries, he added.
Alluding to sector reforms, Singh said that amendments to the Electricity Act are essential to make the sector viable and sustainable.
The Minister called on the industry to convey the importance of these reforms.
He added that the sanctity of the contracts had to be maintained and that this would apply to all the parties involved, without which the blacklisting of the companies would result.
Speaking on the issue of open bids available only for the short term, Singh said that the Ministry is working towards a structured bidding mechanism to make coal accessible over the long term without connecting it to PPAs (power purchase agreements).
The Minister urged the industry to start up and stand up for its rights. He added that the government is taking steps to bring back growth in these challenging times, and demand will accelerate.
Ranjit Gupta, Chairman of the Board of Directors of FICCI Renewable Energy and Chief Executive Officer of Azure Power, said the reforms of the Electricity Act and Tariff Policy are much needed as they will enable foreign investors to travel to India.
He added that the industry should lobby for the government's 'Make in India' initiative.
Gupta said that the renewable energy sector suffered less during the COVID-19 crisis due to the government 's proactive actions. He added that the Council of CEOs of FICCI RE had a direct involvement with the States and raised concerns about speedy resolution, stating that one such commitment had already been made with the Minister of Energy of Gujarat on 5 June 2020.
Vipul Tuli, Chair of the FICCI Power Committee and Managing Director of Sembcorp Energy India, said that reforms in the power sector have been timely, rapid and helpful.
He added that the industry is also stepping up to the challenge in response to the government 's efforts.
Underlining the issues of the market, Tuli said that liquidity was a problem for the industry. Certain concerns are the shortage of long-term contracts and environmental equipment problems for the power sector.
Dilip Chenoy, Secretary General of the FICCI, said that the industry should battle the problem of perception with the government and work towards respecting the company's contracts.
He added that the industry would also communicate with stakeholders through articles to emphasize the need for reforms to the Electricity Act.
