Transmission charges' waiver for renewable projects extended till 2025

Battery storage, Pump hydro, renewable trading also under exemption

In a major relief to the renewable energy project developers, the union ministry of power extended the exemption on transmission charges till 2025. The waiver also now includes battery storage, pump hydro projects along with solar and wind. 

In a public order, the ministry of power said, "extension of the waiver of Inter-state transmission system (ISTS) charges on transmission of electricity from solar and wind sources of projects to be commissioned upto 30th June, 2025.". 

The order further said that waiver of charges would also be allowed for pump hydro and battery storage projects as well if 70 per cent of the electricity produced from these units is generated from solar and wind sources. ISTS charges would be levied gradually on pump hydro and battery storage projects. It would be aligned with the reduction in tariff and payment of debt. 

The ministry also waived off ISTS charges for renewable energy that is traded on the power exchanges till 2023. The exemption will be for clean energy traded under Green term ahead market and Green day ahead market. 

The ISTS waiver was first introduced in 2019 by the Centre in order to bring down the tariff of solar and wind projects and increase investors' interest. The discounted ISTS charges are socialised and shared by the Central transmission utility and the state governments. 

The waiver was set to expire this June. Earlier this year it was extended to 2023 but the latest order has taken the deadline two years further. 

Several industry associations had urged the government to extend the exemption on the ISTS charges due to the pandemic. Several solar and wind power projects along with their allies transmission networks are facing delays due Covid induced lockdowns and supply chain disruptions.