Complete 25-year ISTS waiver for offshore wind projects

 

In a major development that could boost the fledgling offshore wind industry, the Centre has decided to grant a complete waiver of ISTS charges.

A government release said that this waiver will be applicable for projects commissioned on or before December 31, 2032. The waiver will be available for a 25-year period from the date of project commissioning.

Further, offshore wind projects commissioned from January 1, 2033, would be given graded ISTS charges. Earlier, all wind energy projects were provided waivers up to June 20, 2025. Now, offshore wind would be treated separately, and waiver to these would be granted up to December 31,  2032, with graded transmission charges thereafter.

For instance, those projects commissioned during the period from January 1, 2033, to December 31, 2034, will need to pay 25 percent of the then-applicable ISTS charges. (See table)

 

Green hydrogen and green ammonia

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/green ammonia production units, using renewable energy (commissioned after March 8, 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. Projects commissioned after December 31, 2030, will attract graded transmission charges thereafter, as shown in the table.

 

The decision effectively extends the applicability of waiver date from June 30, 2025 to December 31, 2030, for green hydrogen and green ammonia projects.

 

Pumped storage plants

To promote the development of pumped 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 the commissioning of the project. This shall be applicable in cases where construction work is awarded on or before June 30, 2025.

 

Benefit to users too

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 percent of the energy utilized by the user for charging the storage system is renewable energy. Earlier the limit of 51 percent was at the project level. This change has been proposed in view of the fact that in the future the capacity of such storage projects will be shared by many discoms / other users and only some of them may meet this criterion of 51% individually while the same may not be met in an aggregate manner at the storage project level.

Also read: ISTS Charges For New Hydropower Projects Waived

Extension of COD

The government release also highlighted that in case a project is eligible for a waiver of transmission charges based on its original COD (commercial operations date/date of commissioning), the same benefit will continue to be made available if COD is extended by the 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, the release added.

 

Featured photograph (source: Siemens) is for representation only.