Tatsat Chronicle Magazine

Inter-State Transmission Charges Waived Off For Off-Shore Wind Power For A Period Of 25 years

May 29, 2023
Wind power_Off Shore

The Government has decided to grant waiver of ISTS charges to Off-Shore Wind Projects and extend the waiver to Green Hydrogen and Green Ammonia . This decision has been taken to facilitate wider execution of offshore wind energy initiatives, to promote the expansion of Green Hydrogen and Green Ammonia Projects and to encourage the offtake of renewable energy from Energy Storage System Projects.

As per the notification issued by Ministry of Power, a complete waiver of ISTS charges (Inter-State Transmission Charges) has been given for off-shore wind power projects commissioned on or before December 31, 2032, for a period of 25 years from the date of commissioning of the project. Off-shore projects commissioned from January 1, 2033, would be given graded ISTS charges. Earlier, all wind energy projects were provided waiver upto June 30, 2025. Now, offshore wind would be treated separately, and waiver to these would granted up to Dec 31, 2032, with graded transmission charges thereafter.

The government has also granted complete waiver of ISTS charges for a period of 25 years from the date of commissioning of the project, for Green Hydrogen and Green Ammonia production units, using Renewable Energy (commissioned after 8th March 2019), Pumped Storage System or Battery Storage Systems or any hybrid combination of these technologies. The projects commissioned on or before  December 31, 2030 shall be eligible for this waiver. The projects after December 31, 2030 will attract  graded transmission charges thereafter. The decision effectively extends the applicability of waiver date from  June 30, 2025 to Dec 31, 2030.

To promote development of Pump Storage Plants (PSP), the criteria for availing the complete waiver of ISTS charges for PSP projects has now been linked to the date of award of the project rather than commissioning of the project. This shall be applicable in cases where construction work is awarded on or before  June 30, 2025.

The ISTS charges on drawl of energy from energy storage projects, which was earlier granted to the project, will henceforth be available for each individual user of such project. The individual user will get this benefit, if at least 51% of the energy utilized by the user for charging the storage system is renewable energy. Earlier the limit of 51% was at project level. This change has been proposed in view of the fact that in future the capacity of such storage projects will be shared by many discoms / other users and only some of them may meet this criteria of 51% individually while the same may not be met in an aggregate manner at storage project level.

Moreover, in case a project is eligible for waiver of transmission charges based on its original COD (Date of Commissioning), the same benefit will continue to be made available if COD is extended by competent authority. This is considered necessary to give confidence to the investors who are taking investment decisions based on the present circumstances but their COD may extend beyond the relevant applicable date for transmission charge waiver for reasons beyond their control.