ISTS Waiver
To promote the development of renewables in RE-rich states and encourage inter-state procurement of renewables, the central government allowed waiver of ISTS charges and losses for solar and wind projects in 2016. Through various subsequent orders, the Ministry of Power (MoP) extended the deadline of ISTS waiver for some solar and wind project categories commissioned till 30th June, 2025. Recently, the ambit of the waiver has been widened for green hydrogen, large hydro plants, pumped storage hydro (PSH) and battery storage (BESS). We have tracked the several amendments and evolution of the ISTS waiver framework since 2016 below.
MoP Order June 2021
Date of Notification
21st June, 2021
Wind
Extension of ISTS charges waiver on transmsision of electricity generated from such projects to be commissioned up to 30th June, 2025
Solar
Extension of ISTS charges waiver on transmsision of electricity generated from such projects to be commissioned up to 30th June, 2025
Applicability of order
Applicable prospectively, i.e., from date of issue of order
Storage
"1. Waiver of total ISTS charges for Hydro pumped storage plant (PSP) and Battery energy storage system (BESS) projects to be commissioned up to 30th June, 2025, if following conditions are met:
i. At least 70% of annual electricity requirement for pumping of water in hydro PSP is met by use of electricity generated from solar and/ or wind power plants.
ii. At least 70% of annual electricity requirement for charging of BESS is met by use of electricity generated from solar and/ or wind power plants.
2. ISTS charges for power generated/ supplied from such Hydro PSP and BESS shall be levied gradually: 25% of STOA charges for initial 5 years of operation, then charges can be gradually increased in steps of 25% after every 3rd year to reach to 100% of STOA charges from 12th year onwards. This may be aligned with gradual reduction in tariff and payment of debt."
i. At least 70% of annual electricity requirement for pumping of water in hydro PSP is met by use of electricity generated from solar and/ or wind power plants.
ii. At least 70% of annual electricity requirement for charging of BESS is met by use of electricity generated from solar and/ or wind power plants.
2. ISTS charges for power generated/ supplied from such Hydro PSP and BESS shall be levied gradually: 25% of STOA charges for initial 5 years of operation, then charges can be gradually increased in steps of 25% after every 3rd year to reach to 100% of STOA charges from 12th year onwards. This may be aligned with gradual reduction in tariff and payment of debt."
Clarifications on certain aspects
"1. Waiver is allowed for ISTS charges only and not losses.
2. Intra-state transmission system (InSTS) which is used for conveyance of electricity across territory of intervening state as well as conveyance within state which is incidental to such ISTS of electricity, shall be included for sharing of ISTS charges. Any waiver of ISTS charges that applies to ISTS shall also be applicable to such parts of InSTS. Transmission charges of such InSTS shall be reimbursed by CTU as is being done for ISTS system. Concerned Regional Power Committee may through studies identify such lines."
2. Intra-state transmission system (InSTS) which is used for conveyance of electricity across territory of intervening state as well as conveyance within state which is incidental to such ISTS of electricity, shall be included for sharing of ISTS charges. Any waiver of ISTS charges that applies to ISTS shall also be applicable to such parts of InSTS. Transmission charges of such InSTS shall be reimbursed by CTU as is being done for ISTS system. Concerned Regional Power Committee may through studies identify such lines."
Power Market
Waiver of ISTS charges shall be allowed for trading of electricity generated/ supplied from solar, wind, PSP and BESS in Green Term Ahead market (GTAM) and Green Day Ahead market (GDAM) for 2 years (till 30th June, 2023). This arrangement will be reviewed on annual basis depending upon the future development in power market.