Offshore Wind Projects Starting Before 2033 To Get 25 Years Of ISTS Waiver In India

The Ministry of Power, in its latest notification, has allowed a 25-year waiver of Inter-State Transmission System (ISTS) charges for early starters of offshore wind power projects. As per the notification, all the offshore projects commissioned on or before December 31, 2032, would be eligible for the long-term waiver. Besides these, the notification also confirms that the waiver for green hydrogen and green ammonia projects would be extended to the end of 2031. These projects are also expected to catalyze many renewable energy projects.  

On the other hand, the ministry also announced different slabs of ISTS charges for such projects starting after January 1, 2033, in a graded manner. While the ministry has planned to levy 25 percent of the ISTS charges for projects beginning in 2033, it has proposed increased charges with the passing years. The notification said all such projects starting from January 1, 2036, would see 100 percent ISTS charges.

“Earlier, all wind energy projects were provided waiver up to 30.06.2025. Now, offshore wind would be treated separately, and waiver to these would be granted up to December 31, 2032, with graded transmission charges after that,” the ministry said in a statement. 

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It comes days after the ministry brought its second amendment in their Green Energy Open Access Rules 2022 and extended the benefits of surcharge exemption under open access for offshore wind projects commissioned on or before December 31, 2032. 

The ministry, meanwhile, has also proposed a waiver for Green Hydrogen and Green Ammonia projects for 25 years starting before December 31, 2030. In addition, it has also proposed levying of ISTS charges in a graded manner for projects implemented after January 1, 2031. 

The ministry has also proposed the relaxation of charges for Pumped Hydro Projects (PSP). For PSPs to avail of a waiver of ISTS charges, the ministry has linked it to the date of award of the project rather than the commissioning of the project. The waivers apply when 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% of the energy utilized by the user for charging the storage system is renewable energy,” a statement from the ministry said. 

Earlier, the limit of 51% was at the project level. However, this change has been proposed because in the future, many discoms/ other users will share the capacity of such storage projects and only some of them may meet these criteria of 51% individually, while the same may not be met in an aggregate manner at a storage project level.