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No Transmission Charges On BESS, PSPs Till June 28: Govt
Ministry of Power has issued a long-awaited notification waiving inter-state transmission system (ISTS) charges for Energy Storage Systems (ESS), including pumped hydro and battery projects, as part of efforts to support renewable energy integration.
The order builds on earlier ministry notifications issued on December 23, 2016; November 2, 2021; December 1, 2022; December 6, 2022; and May 29 and June 9, 2023 (Order No.12/07/2023-RCM). These orders were aimed at waiving ISTS charges on electricity transmission from renewable energy sources, ESS, and green hydrogen/ammonia projects.
Under the amended guidelines:
A 100% ISTS charge waiver will apply to Hydro Pumped Storage Projects (PSPs) whose construction contracts are awarded on or before June 30, 2028.
A 100% waiver is also extended to co-located Battery Energy Storage Systems (BESS) commissioned by June 30, 2028, provided the electricity is consumed outside the state of commissioning.
The ministry clarified that a BESS project is considered co-located if both the BESS and the associated renewable energy project are connected to the same ISTS substation.
However, the waiver will not apply to:
Hydro PSPs whose construction is awarded after June 30, 2028.
Co-located BESS projects commissioned after June 30, 2028.
For non-co-located BESS, the ISTS charge waivers will continue to follow prevailing Ministry of Power orders and Central Electricity Regulatory Commission (CERC) regulations.
Government Push For BESS
The latest notification issued by the Ministry of Power combined with its recent allocation of ₹5,400 crore ($650 million) as viability gap funding (VGF) scheme aimed at accelerating the deployment of Battery Energy Storage Systems (BESS) across the country.
Funded through the Power System Development Fund (PSDF), the scheme will support the development of 30 GWh of BESS capacity in a bid to bolster the integration of renewable energy into the national grid and ensure power reliability by addressing the intermittency of solar and wind sources. The scheme allocated 25 GWh to 15 states and 5 GWh to state-run utility NTPC, with the latter expected to leverage existing thermal and transmission infrastructure to meet non-solar hour electricity demand.