ISTS waiver of green hydrogen and green ammonia projects extended to 2030

Offshore wind energy projects will greatly benefit from the government’s 25-year complete waiver of ISTS charges for projects that are commissioned on or before December 31, 2032.

The government has made a significant move, waiving the ISTS charges for offshore wind projects and extending the waiver to green hydrogen and green ammonia. This choice has been made to support the extension of green hydrogen and green ammonia projects, to promote the execution of offshore wind energy efforts on a larger scale, and to promote the offtake of renewable energy from energy storage system projects.

As per the notification issued by the 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. The off-shore projects commissioned as of January 1, 2033, would be given graded ISTS charges. Earlier, all wind energy projects were provided a waiver up to June 30, 2025. Now, offshore wind would be treated separately, and waivers to these would be granted up to December 31, 2032, with graded transmission charges thereafter.

The government has also granted a 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 March 8^th, 2019), pumped storage systems, 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 the waiver date from June 30, 2025, to December 31, 2030.

In order to encourage the growth of pump storage plants (PSP), the criteria for receiving a full waiver of ISTS charges for PSP projects are now based on the date of award rather than the date of commissioning. In circumstances where construction work is awarded on or before June 30, 2025, this will be applicable.

Each individual user of an energy storage project will now have access to the ISTS charges on energy drawl that were previously provided to the project. If at least 51percent of the energy utilised by the user to charge the storage system is renewable energy, the particular user will receive this advantage.

The 51 percent limit was formerly only applicable to projects. This amendment has been suggested in light of the fact that, in the future, many discoms and other users may share this storage project’s capacity, making it possible that only a few of them will individually achieve the 51 percent requirement while the need may not be reached on an aggregate basis for the storage project. Additionally, if a project qualifies for a waiver of transmission fees based on its original COD (date of commissioning), that advantage will remain accessible if the COD is extended by a competent authority. This is seen as important in order to reassure investors who are making investment decisions based on the current situation, but their COD may stretch past the applicable date for the waiver of transmission charges due to factors beyond their control.