The transmission fee exemption for offshore wind and GH2 projects reflects the government’s commitment to promoting clean and sustainable energy sources. In a significant move to boost renewable energy sources, the Indian government has extended the inter-state transmission fee waiver for a period of 25 years for offshore wind generation projects, as well as green hydrogen and ammonia units. This exemption aims to incentivize the development of emerging sources of green power and level the playing field with solar generation. The decision was outlined in an order issued by the Ministry of Power on Monday.
According to the order, the transmission fee waiver will be applicable to wind power projects that are commissioned until December 31, 2032. For projects commissioned after this date, a partial waiver will be provided based on a specified timetable. Specifically, projects commissioned between January 2033 and December 2034 will have to pay 25% of the inter-state transmission charges. This rate will increase to 25% for projects commissioned between January 2034 and December 2035, and to 75% for projects commissioned between January 2035 and December 2036. Projects commissioned from January 2037 onwards will be required to pay the full charges.
In addition to wind projects, the transmission fee exemption also extends to green hydrogen and ammonia projects. For green hydrogen or ammonia projects commissioned by December 2030, no inter-state transmission charges will be levied if they utilize power from solar, wind, or large hydel units that were commissioned after March 8, 2019. Furthermore, transmission charges will be waived for green hydrogen or ammonia units that utilize power from pump storage or battery storage plants.
The decision to grant a transmission fee exemption for offshore wind and GH2 projects aligns with the Indian government’s ambitious renewable energy targets. With the aim of achieving 450 GW of renewable energy capacity by 2030, this move is expected to spur investments and accelerate the growth of clean energy infrastructure in the country.
Offshore wind projects hold immense potential for India, given its long coastline and favorable wind conditions. By exempting these projects from transmission fees, the government is providing a significant financial advantage and reducing the overall cost of electricity generation. This will encourage both domestic and international players to invest in offshore wind farms, leading to job creation and technological advancements in the sector.
For green hydrogen and ammonia projects commissioned after December 2030, a partial waiver will be granted based on subsequent commissioning dates. Projects commissioned between January 2030 and December 2031 will be required to pay 25% of the applicable transmission levy. Projects commissioned between January 2033 and December 2034 will have to pay 50% of the levy, while projects commissioned between January 2034 and December 2035 will be charged 75% of the levy. Units commissioned after December 2035 will have to pay the full transmission charges.
This transmission fee exemption for offshore wind and GH2 projects reflects the government’s commitment to promoting clean and sustainable energy sources. By providing financial incentives and reducing regulatory barriers, the government aims to accelerate the development of renewable energy infrastructure and contribute to India’s goal of achieving a significant share of renewable energy in its overall energy mix.
The move comes as part of the government’s broader efforts to transition to a low-carbon economy and reduce reliance on fossil fuels. It is expected to attract investment in offshore wind and green hydrogen projects, creating new employment opportunities and fostering economic growth in the renewable energy sector.
The exemption of transmission fees for these projects is a positive step towards a greener and more sustainable future. It encourages the adoption of innovative technologies and supports the growth of renewable energy sources, which are crucial for addressing climate change and reducing greenhouse gas emissions.
As India continues its journey towards a clean energy future, the transmission fee waiver for offshore wind and GH2 projects demonstrates the government’s commitment to facilitating the transition and achieving its renewable energy targets. The move is expected to attract domestic and foreign investments, promote technological advancements, and pave the way for a greener and more sustainable energy landscape in the country.
