The Ministry of Power (MoP) has announced an extension to the inter-state transmission system (ISTS) charges waiver on solar and wind energy projects commissioned up to June 30, 2025.

The waiver applies to ISTS charges only and not losses, and the order comes into effect immediately.

In August 2020, MoP had waived ISTS charges and losses on all solar and wind projects commissioned before June 30, 2023.

The waiver is also applicable to pumped hydro storage projects and battery energy storage systems (BESS) commissioned by June 30, 2025, provided they meet the prescribed conditions. As per the terms, at least 70% of the annual electricity requirement for pumping water in the pumped hydropower project will have to be met through solar and or wind power. Additionally, at least 70% of the annual electricity requirement for charging BESS will have to be met through solar and or wind power.

The ISTS charges for power generated from pumped hydro and BESS would be levied gradually, i.e., 25% of the short-term open access (STOA) charges for the first five years of operation, which would be gradually increased by 25% after every third year to achieve 100% of STOA charges from the 12th year onwards.

ISTS waiver would be allowed for trading electricity generated and supplied from solar, wind, pumped hydro, and BESS in the green term ahead market (GTAM) for two years until June 30, 2023; MoP will review this arrangement on an annual basis, depending on the future development of the power market.

The ISTS used for transmission of electricity across the territory of an intervening state and transmission of electricity within the state that lies on the path of the interstate electricity transmission would be included for sharing ISTS charges.

Any waiver of ISTS charges that apply to inter-state transmission would also apply to such intra-state transmission. Thus, the transmission charges of such intra-state transmission systems would be reimbursed by the Central Transmission Utility.

Earlier in January this year, the MoP had announced that it would not deprive renewable power projects of a waiver on ISTS charges and losses if they are commissioned after June 20, 2023, due to delays caused by the transmission provider or the government agency or due to force majeure event.

Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.