The Ministry of Power has permitted renewable energy projects originally tendered under the Inter-State Transmission System (ISTS) connectivity framework to connect to intra-state transmission networks when both the power generation facility and the electricity procurer are located within the same state.
The decision is aimed at optimising transmission costs and improving the financial viability of renewable energy procurement by state utilities and distribution companies (DISCOMs).
The move provides greater flexibility to renewable energy developers by allowing eligible projects to use the State Transmission Utility (STU) or Intra-State Transmission System (InSTS) instead of relying on the inter-state transmission network for supplying electricity within the same state.
Flexibility for Renewable Energy Developers
Under the revised arrangement, renewable energy projects tendered by Renewable Energy Implementing Agencies (REIAs) with ISTS connectivity can opt for intra-state connectivity if the generating facility and the electricity buyer are located in the same state.
The Ministry of Power observed that connecting projects directly to the intra-state transmission network for supplying electricity within the state can reduce overall transmission costs and provide financial and operational benefits to power procurers.
This flexibility is expected to help state utilities and DISCOMs access renewable electricity through a potentially more economical transmission arrangement.
Regulatory Approvals and Compliance
The Ministry has clarified that projects opting for intra-state connectivity must comply with the applicable regulations of the respective State Electricity Regulatory Commission (SERC) or Joint Electricity Regulatory Commission (JERC).
Prior regulatory approval will be required for the proposed arrangements. The Power Purchase Agreements (PPAs) and Power Sale Agreements (PSAs) associated with procurement through InSTS-connected projects must also receive approval from the relevant regulatory commission.
These requirements are intended to ensure that changes in connectivity arrangements remain consistent with the applicable electricity regulations and procurement framework.
Changes to Future Renewable Energy Tenders
The Ministry has also directed Renewable Energy Implementing Agencies to incorporate suitable provisions in future bidding documents to facilitate intra-state connectivity wherever the generation facility and power procurer are located within the same state.
This step is expected to provide greater clarity to developers and procuring entities during the project bidding and planning stages, reducing the need for separate connectivity arrangements where intra-state transmission is more suitable.
Supporting Cost-Effective Renewable Energy Procurement
The decision forms part of broader efforts to improve India’s renewable energy transmission infrastructure and make clean electricity procurement more efficient.
As renewable energy capacity continues to expand, transmission planning and grid connectivity have become important factors influencing project costs, power evacuation and the overall economics of renewable energy supply.
By allowing eligible ISTS-tendered projects to use intra-state transmission networks, the Ministry aims to improve flexibility in power transmission while helping state-level procurers optimise costs.
Disclaimer: This report has been editorially prepared using publicly available information and official statements. Readers are advised to refer to official announcements for further details.
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