India Ministry of power permits local transmission for renewable projects

The Ministry of Power (MoP) in India now allows renewable energy projects to use intra-state transmission system (InSTS) connectivity instead of inter-state transmission system (ISTS) connections. This change applies to projects that were originally tendered for ISTS connectivity if both the power plant and the buyer remain within the same state.

The ministry introduced this rule to lower transmission costs and make it cheaper for state utilities and distribution companies to buy renewable power.

Developers and buyers must still follow the rules set by state or joint electricity regulatory commissions and secure the required approvals for power purchase and sale agreements. The Ministry of Power directed that future bidding documents for renewable projects include provisions for this local connectivity option. The ministry also recently updated guidelines for right of way compensation for inter-state lines.

These guidelines state that compensation usually follows local circle rates or stamp duty rates, but a Market Rate Committee will determine the value if market prices are higher.