Cost clarity could speed up our energy transition

Reduced incentives for renewable power transmission across state borders should nudge importers to produce their own. To catalyse our clean shift, let true costs play a larger role

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The government's recent decision to reduce inter-state transmission incentives for renewable energy (RE) from sources like solar and wind is a timely step to reduce distortion in the bills of states that use India's arterial inter-state transmission system (ISTS).

Thus far, states using ISTS wires for non-RE supplies more than RE—like Rajasthan and Gujarat, which are both big RE producers—have ended up paying higher bills.

On the other hand, states like Jharkhand and Odisha, which generate plenty of coal-fired electricity but use that network to import large RE volumes, have had to pay less.

The revision of a policy aimed at widening RE access will push states to look beyond the low-hanging fruit of supply from RE-rich states and develop local rooftop solar capacity and explore other RE options.