ISTS charges for offshore wind, green hydrogen, ammonia projects waived off for 25 yrs

New Delhi: In a major decision, the government has decided to waive off ISTS charges for offshore wind projects, Green Hydrogen and Green Ammonia projects for a period of 25 years, the Ministry of Power said on May 29. “This decision has been taken to facilitate wider execution of offshore wind energy initiatives, to promote the expansion of Green Hydrogen / Green Ammonia Projects and to encourage the offtake of renewable energy from Energy Storage System Projects,” said a statement.

As per the notification issued by the Ministry of Power, a complete waiver of ISTS charges (Inter-State Transmission Charges) has been given for offshore 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 same waiver has also been extended to Green Hydrogen/Green Ammonia production units, using Renewable Energy (commissioned after March 8, 2019), Pumped Storage Systems or Battery Storage Systems or any hybrid combination of these technologies, however, with a different timeline — projects commissioned on or before December 31, 2030 shall be eligible for this waiver. These projects will be able to avail the waiver for a period of 25 years from the date of commissioning of the project, same as offshore wind projects. The decision effectively extends the applicability of the waiver date from June 30, 2025 to December 31, 2030.

Graded waiver of ISTS charges for offshore wind, green projects later

The offshore projects commissioned from January 1, 2033 would be given graded ISTS charges. Offshore wind projects commissioned between January 1, 2033 to December 31, 2033 will pay 25 percent of the applicable ISTS charges, between January 1, 2034 to December 31, 2034 will pay 50 percent of the ISTS charges and between January 1, 2035 to December 31, 2035 will pay 75 percent of the ISTS charges. Projects commissioned on or after January 1, 2036 will pay 100 percent of the ISTS charges.

Earlier, all wind energy projects were provided waiver upto June 30, 2025. Now, offshore wind would be treated separately.

For Green Hydrogen/Green Ammonia production units, using Renewable Energy, Pumped Storage Systems or Battery Storage Systems or any hybrid combination of these technologies, projects commissioned after December 31, 2030 will attract graded transmission charges thereafter. Between January 1, 2031 to December 31, 2031, 25 percent ISTS will be applicable, between January 1, 2032 to December 31, 2032, 50 percent ISTS will be applicable and between January 1, 2033 and December 31, 2033, 75 percent will have to be paid. For projects commissioned on or after January 1, 2034, 100 percent of the ISTS charges will be applicable.

Pump Storage Plants: Waiver linked to date of award of project

To promote the 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 the 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 percent of the energy utilised by the user for charging the storage system is renewable energy. Earlier the limit of 51 percent was at 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 criteria of 51 percent individually, while the same may not be met in an aggregate manner at the storage project level.

Moreover, in case a project is eligible for a waiver of transmission charges based on its original COD (Date of Commissioning), the same benefit will continue to be made available if the 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.

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