Govt may not extend ISTS charges waiver for solar and wind projects
This decision, as conveyed by a senior government official, marks a pivotal moment for the renewable energy sector, which had largely benefited from the waiver in transmitting clean electricity across state lines without incurring significant charges.
The ISTS charges, essentially fees for using national grid infrastructure to move power between states, were previously waived to incentivise the growth of renewable energy.
The non-extension means that projects commissioned after the deadline will now face these charges, potentially leading to a notable increase in
power tariffs
and raising concerns about the competitiveness of renewable energy against traditional sources like coal.
However, in a move to mitigate the immediate impact on projects that missed the deadline due to unforeseen circumstances, the official said, "We will evaluate their situation on a case-by-case basis and accordingly decide to provide suitable relief."
This suggests a more nuanced approach than a blanket withdrawal, offering a glimmer of hope for developers caught in commissioning delays.
The decision comes despite strong appeals from industry stakeholders. Last month, the Electric Power Transmission Association (EPTA), an apex industry body, had urged the government to extend the ISTS charges waiver until March 2026.
G.P. Upadhyay, Director General of EPTA, warned that investments totaling approximately ₹2 lakh crore (around $24 billion USD) across some 30 GW of clean energy projects could be jeopardised without such an extension.
EPTA highlighted that many projects, spread across states like Rajasthan, Gujarat, Madhya Pradesh, Andhra Pradesh, Tamil Nadu, and Maharashtra, have faced delays due to reasons beyond the developers' control.
These include challenges related to land availability, various local issues, and environmental concerns, notably the protection of the Great Indian Bustard in regions of Rajasthan and Gujarat, which has led to prolonged approvals and grid connectivity issues.
Developers are now contemplating approaching the
Central Electricity Regulatory Commission
(CERC) for solutions, which could further prolong commissioning timelines.
The ISTS waiver has been a crucial policy tool, enabling renewable energy developers to bypass substantial
transmission costs
, thereby making green power more economically attractive.
Its withdrawal is expected to recalibrate project economics, potentially increasing the cost of renewable power.
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