India proposes transmission fee relief to support delayed renewable energy projects

Sunday 02 - 15:00

By: Sahili Aya

India proposes transmission fee relief to support delayed renewable energy projects

India's power regulator has proposed new measures to reduce financial pressure on renewable energy developers whose projects have been delayed because transmission infrastructure was not ready on time.

The draft regulations, released by the Central Electricity Regulatory Commission (CERC), would allow eligible solar, wind and hybrid renewable energy projects to continue benefiting from interstate transmission charge waivers despite missing their original commissioning deadlines due to grid-related constraints.

The proposal is designed to address one of the key bottlenecks slowing India's clean energy expansion: the mismatch between the rapid development of renewable generation capacity and the pace of transmission network construction.

Policy adjustment follows infrastructure delays

India had begun gradually withdrawing interstate transmission charge exemptions for new renewable energy projects from July 2025 as part of a broader policy transition.

However, numerous projects have encountered delays because transmission lines required to connect new generating facilities to the national grid were not completed on schedule.

The proposed regulatory changes would effectively reverse part of that policy for projects affected by these infrastructure constraints, helping developers avoid additional transmission costs that were beyond their control.

Long-term power contracts would determine eligibility

Under the draft framework, transmission charge waivers would apply to qualifying solar, wind and hybrid projects that secured power sale agreements with a minimum duration of seven years by December 31, 2026.

The proposal aims to protect projects that have already made significant financial and contractual commitments while awaiting access to the transmission network.

If approved, the revised rules could improve investment certainty across India's renewable energy sector and help accelerate delayed capacity into commercial operation.

Battery storage projects also included

The regulator has also proposed extending the same transmission charge benefits to battery energy storage systems developed alongside renewable energy projects.

Electricity supplied from these batteries would receive the same transmission fee exemption as the associated renewable generation facility, reflecting the growing importance of energy storage in improving grid reliability and integrating variable renewable power.

The proposal highlights India's broader strategy of combining renewable generation with storage technologies to strengthen grid flexibility while advancing its long-term clean energy ambitions.