Transmission body seeks flexible ISTS waiver phase-out for RE sector

Business Standard

23-06-2025

As India advances towards its ambitious target of 500 GW renewable energy (RE) capacity by 2030, the Electric Power Transmission Association (EPTA), the apex body for transmission companies, has urged the government to adopt a more flexible approach to the planned withdrawal of the Inter-State Transmission System (ISTS) waiver. It has also suggested that the government explore alternative viable options to offer critical relief to renewable energy developers.
Since its introduction in 2016, the ISTS waiver—critical to India's green energy transition—has been extended only once and is now slated for phased withdrawal starting July 1, 2025.
EPTA has proposed a milestone-based eligibility framework that would allow projects with significant progress, but delayed due to external challenges, to continue availing themselves of the ISTS waiver, G P Upadhyaya, director general of the association, told reporters on Monday.
According to EPTA, such projects should be granted a few more months to complete construction so they may qualify under the current waiver regime.
Alternatively, the association recommended a more gradual phase-out of the waiver, beginning with a 10 per cent withdrawal every year instead of the proposed 25 per cent.
The industry believes that a 25 per cent annual withdrawal would disrupt ongoing projects, jeopardise investments and undermine cost competitiveness, especially for commercial and industrial (C&I) consumers who already pay among the highest electricity tariffs globally.
'Such a calibrated approach would significantly ease the impact of the waiver's withdrawal on the cost of green power, thereby allowing RE power to stay competitive and attract more investments in this key sector,' Upadhyaya said.
'We are not seeking a blanket extension. We are only proposing that the projects which have achieved key development milestones—such as securing financial closure, acquiring at least 50 per cent of required land, and placing key equipment orders—should be granted a six-to-nine-month window to avail themselves of the ISTS waiver benefits,' he added.
This request aligns with Power Minister Manohar Lal Khattar's announcement at a press conference earlier this month extending the ISTS waiver on pumped hydro and battery storage projects till June 2028 from the earlier deadline of this June.
Among other key issues in the transmission sector, EPTA stressed the critical need to scale up domestic manufacturing of 765 kV HVDC equipment under the production-linked incentive (PLI) scheme, given that European imports are currently fully booked and expensive, while restrictions on Chinese imports continue.
The association also highlighted the planned offshore transmission line from the Andaman Islands to Paradip in Odisha under the One Sun, One World, One Grid initiative. This project will help shift power in the islands from fossil fuel-based sources to green energy from the mainland. EPTA further noted India's growing grid strength and its potential for future cross-border connections, including possible links from Andaman to Singapore and from Gujarat to the UAE.