The Ministry of Power has granted a 100% interstate transmission system (ISTS) waiver for pumped storage projects (PSPs) for which construction works were awarded on or before June 30, 2028.

A 100% waiver has also been granted to co-located battery energy storage systems (BESS) that will be commissioned on or before June 30, 2028. This waiver will be granted if the power from such BESS projects is consumed outside the state where these systems are commissioned.

A BESS project will be considered as co-located if the BESS and renewable project are situated at the same ISTS substation.

For BESS projects that are not co-located, the ISTS charges waiver will be as per the extant orders issued by the Ministry of Power and the Central Electricity Regulatory Commission (CERC) regulations.

ISTS charges will not be waived for PSPs awarded construction contracts after June 30, 2028, nor will they be waived for co-located BESS commissioned after June 30, 2028.

In 2024, CERC expanded the transmission charges waiver eligibility by adding renewable energy generation systems based on offshore wind to the energy sources list, which already includes hydropower generation.

The ministry had extended the waiver multiple times since 2016. The last waiver extension was issued in 2022 for projects to be commissioned by June 30, 2025.

After this deadline, 25% of the applicable ISTS charges will be levied on renewable energy projects, including solar, wind, pumped hydro storage, and projects with BESS commissioned between July 1, 2025, and June 30, 2026.

Mercom India reported that many renewable energy projects were at risk of losing the benefit of the waiver, which would significantly increase their project costs. Developers and independent power producers  estimated a huge impact on the market if the waiver is not extended. Those with delayed PPAs will suffer from losses, increasing generation costs, and infrastructure bottlenecks.

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