Exempt 100% Of ISTS Charges For RE Power Till 2030: IEEFA

Exempt 100% Of ISTS Charges For RE Power Till 2030: IEEFA

The Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research and Analytics have prepared and shared a list of key recommendations that the new Union government post-elections should take up in the first 100-days to reach the renewable energy targets up to 2030.

As per the Indian government’s own target it wants to go net-zero by 2070 and ensuring that 50 percent of India’s total energy comes from non-fossil fuel sources. The target is also install 500 GW of renewable energy sources by 2030.

“However, to meet the 2030 target, an annual installation rate of around 50GW is imperative. To put this into perspective, in the fiscal year (FY) 2023-24, India added only a little over 18GW of renewable energy capacity. Investments into the renewable energy sector also marginally declined from US$11.7 billion in FY2022-23 to US$11.4 billion in FY2023-24. Consequently, the country must accelerate its efforts, requiring more than 2.5 times the installation compared to the previous fiscal year,” the recommendation report said.

“These challenges underscore the complexities inherent in the renewable energy sector, hindering the seamless translation of issued tenders into tangible on-ground projects and impeding investment inflow. Addressing these issues is paramount to expediting renewable energy deployment and attracting the necessary investment. Therefore, this note outlines recommendations for implementation in the immediate and medium term, offering viable solutions to navigate the sector’s challenges and foster its growth,” it added.

The recommendations from the energy think tanks are for all key sectors of renewable energy — solar photovoltaic (PV) manufacturing, utility-scale solar, rooftop solar, open access, energy storage and utility-scale wind.

The media release from the think tank said that the new government should consider extending 100% exemption from Inter State Transmission (ISTS) system charges till 2030 for renewable energy. It should also consider levying a minimum penalty of Rs1 per kilowatt-hour (kWh) of renewable purchase obligations’ (RPO) annual energy shortfall across states on all obligated entities. This comes at a time when many states fail to achieve their RPO targets. With the segregated RPOs for different renewable sources, the compliance has now become more cumbersome for the obligated entities.

IEEFA and JMK Research have also batted for higher subsidies for customers installing rooftop solar and consuming below 150 units (comprising almost 80% of Indian households). It also asked for lower GST rate for battery energy storage systems (BESS), to improve the affordability of battery.

It also said, “A 5% lower GST rate should be applied to the sale of BESS integrated systems and BESS components—batteries and cell modules—for the next 5 years. The GST on wind projects should be reduced from 12% to 5%.”.