Power Ministry allows ISTS-tendered renewable projects to connect to state grid for same-state buyers

New Delhi: The Ministry of Power has allowed renewable energy (RE) projects tendered for connection to the inter-state transmission system (ISTS) to connect to the state grid instead. This applies where the project and the procurer, such as a state electricity distribution company (DISCOM), are in the same state. The ministry gave its decision in a letter to the heads of NTPC, NHPC, SJVN and the Solar Energy Corporation of India (SECI) on November 10.

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These four agencies invite bids for RE projects as Renewable Energy Implementing Agencies (REIAs). The ministry acted on a request from the National Solar Energy Federation of India (NSEFI). According to the letter, the industry body had asked that projects bid out by REIAs on an ISTS-connected basis “be permitted to connect to the State Transmission Utility (STU)/Intra-State Transmission System (InSTS), where the RE project and the procuring entity/DISCOM are located within the same State.”

Cost optimisation, says ministry

The ministry said it had examined the request and agreed to it on cost grounds. “The matter has been examined and it is noted that connecting the RE project to InSTS would, generally, result in transmission cost optimisation and also benefit the procurer,” the letter said. “Therefore, this Ministry agrees with the proposal.”

Under an ISTS-connected tender, a project connects to the inter-state network, and the procurer draws its power from that network. With the ministry’s decision, a project that supplies a buyer in its own state can now connect directly to that state’s network.

State regulators to approve agreements

The ministry also said that power bought within a state comes under that state’s regulator. “It is also noted that the Intra-State procurement of power is governed by the regulatory provisions of the respective State Electricity Regulatory Commissions (SERCs),” the letter said.

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So where the project and the procurer are in the same state, the ministry said “approval of the concerned SERC/JERC for the Power Purchase Agreement (PPA)/Power Sale Agreement (PSA) for such InSTS connected RE procurement may be obtained.” A Joint Electricity Regulatory Commission (JERC) acts as the regulator for some smaller states and Union Territories.

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