Power Ministry Issues Order Extending ISTS Benefits to BESS, Pumped Storage Projects

MNRE Notification

In an order dated November 23, the Ministry of Power of the Government of India has notified key changes to its existing orders allowing waiver of ISTS (Inter State Transmission Charges) on Wind and Solar Sources.

In the latest version, for Wind, Solar, Hydro PSP (Pumped Storage Projects) and BESS projects commissioned upto 30.06.2025, the ISTS charges would stand waived for the following categories and additional ones added now.

a) Wind and solar energy generated by any person or any entity, for self consumption or for sale through competitive bidding, power exchange or bilateral arrangement.

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b) Any power used from solar and/or wind sources by Pumped Hydro Storage systems or BESS (Battery Energy Storage Systems) subject to the following conditions.

• At least 51% of the energy requirement for pumping water in case of PSP system to be met from solar/wind sources.
• Similarly, at least 51% of the total energy requirement to charge up a BESS to be met from Solar/wind.
• Electricity generated or supplied from such systems above..
• Trading of electricity from such systems  in the GTAM or GDAM market till 30.06.2025.
• For Green Hydrogen production plants set up till 30.06.2025. The waiver in this case will be valid for 8 years after commissioning of the H2 plant.
• Power generated for the ministry’s recent Thermal bundling scheme, as long as it does not add to the power evacuation cost for the transmission system.

To provide a clear roadmap on the applicability of the waiver, the ministry has also shared a trajectory as follows :

ISTS Trajectory

The waiver is also applicable for 25 years in case of Solar, Wind and Hydro PSP, for BESS projects, is is 12 years, considering the broadly acceptable lifetimes of these projects.

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The addition of BESS and Hydro PSP is a logical move, as is the applicability to thermal bundling, as the energy system evolves to take in more renewables.