The Government of India has announced a waiver of Inter-State Transmission Charges (ISTS) charges for offshore wind power projects and green hydrogen/green ammonia projects. All off-shore wind power projects commissioned on or before December 31, 2032, and green hydrogen/green ammonia projects commissioned on or before December 31, 2030, shall be eligible for the waiver.
May 29, 2023
The Government of India has decided to grant a waiver of Inter-State Transmission Charges (ISTS) charges to off-shore wind projects and extend the waiver to green hydrogen/green ammonia. This has been done 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.
The waiver is claimable by projects commissioned on or before December 31, 2032, for a period of 25 years from the date of commissioning. The off-shore projects commissioned from January 1, 2033, would be given graded ISTS charges. Previously, all wind energy projects were provided waivers up to June 30, 2025. However, now offshore wind projects would be treated separately, and waiver to these would be granted up to December 31, 2032, with graded transmission charges applying thereafter.
| S. No. | Period of Commissioning of Offshore Wind Power Projects | Applicable ISTS Charges |
| 1. | January 1, 2033 – December 31, 2033 | 25% of the applicable ISTS charges |
| 2. | January 1, 2034 – December 31, 2034 | 50% of the applicable ISTS charges |
| 3. | January 1, 2035 – December 31, 2035 | 75% of the applicable ISTS charges |
| 4. | January 1, 2036, onwards | 100% of the applicable ISTS charges |
Table No. 1 – Graded ISTS charges, as applicable on Off-Shore Wind Power projects from January 1, 2033.
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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. 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 Dec 31, 2030.
| S. No. | Period of Commissioning of Green Hydrogen/Green Ammonia Plants | Applicable ISTS Charges |
| 1. | January 1, 2031 – December 31, 2031 | 25% of the applicable ISTS charges |
| 2. | January 1, 2032 – December 31, 2032 | 50% of the applicable ISTS charges |
| 3. | January 1, 2033 – December 31, 2033 | 75% of the applicable ISTS charges |
| 4. | January 1, 2034, onwards | 100% of the applicable ISTS charges |
Table No. 2 – Graded ISTS charges, as applicable on Green Hydrogen/Green Ammonia projects from January 1, 2031.
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.
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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. 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 percent individually while the same may not be met in an aggregate manner at a 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.
