Boost to offshore wind energy projects

Complete waiver of ISTS charges for 25 years to projects commissioned by Dec 2032

GN Bureau | May 29, 2023


#Energy   #wind energy   #climate change   #economy  
(Photo courtesy: Erik Wilde/CreativeCommons)
(Photo courtesy: Erik Wilde/CreativeCommons)

In a major decision, the Government has decided to grant waiver of ISTS charges to Off-Shore Wind Projects and extend the waiver to Green Hydrogen/Green Ammonia. This decision has been taken 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.

As per the notification issued by Ministry of Power, a complete waiver of ISTS charges (Inter-State Transmission Charges) has been given for off-shore wind power projects commissioned on or before 31st December, 2032 for a period of 25 years from the date of commissioning of the Project. The off-shore projects commissioned from 1st January, 2033 would be given graded ISTS charges. Earlier, all wind energy projects were provided waiver upto 30.06.2025. Now, offshore wind would be treated separately, and waiver to these would granted up to 31st Dec, 2032 with graded transmission charges thereafter.

The government has also granted 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 8th March 2019), Pumped Storage System or Battery Storage Systems or any hybrid combination of these technologies. The projects commissioned on or before 31st December, 2030 shall be eligible for this waiver. The projects after 31st December, 2030 will attract  graded transmission charges thereafter. The decision effectively extends the applicability of waiver date from 30 June 2025 to 31 Dec 2030.

To promote 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 commissioning of the project. This shall be applicable in cases where construction work is awarded on or before 30th June, 2025.

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. Earlier the limit of 51% was at project level. This change has been proposed in view of the fact that in future the capacity of such storage projects will be shared by many discoms / other users and only some of them may meet this criteria of 51% individually while the same may not be met in an aggregate manner at storage project level.

Moreover, in case a project is eligible for waiver of transmission charges based on its original COD (Date of Commissioning), the same benefit will continue to be made available if COD is extended by 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.

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