Government grants waivers to offshore wind and green energy projects
Boosting its renewable initiatives, the Government has made significant moves to support offshore wind energy projects and green hydrogen/green ammonia initiatives. The waiver of Inter-State Transmission Charges (ISTS) has been extended to promote the expansion of these projects and encourage renewable energy uptake from Energy Storage System Projects.
According to the Ministry of Power, off-shore wind power projects commissioned on or before December 31, 2032, will enjoy a complete 25-year waiver of ISTS charges from their commissioning date. For projects commissioned from January 1, 2033, onwards, graded ISTS charges will apply as follows:
– 25% of the applicable ISTS charges for projects commissioned between January 1, 2033, and December 31, 2033.
– 50% of the applicable ISTS charges for projects commissioned between January 1, 2034, and December 31, 2034.
– 75% of the applicable ISTS charges for projects commissioned between January 1, 2035, and December 31, 2035.
– 100% of the applicable ISTS charges for projects commissioned from January 1, 2036, onwards.
Additionally, the government has granted a complete 25-year waiver of ISTS charges for Green Hydrogen/Green Ammonia production units using renewable energy, Pumped Storage System, Battery Storage Systems, or hybrid combinations thereof. Projects commissioned on or before December 31, 2030, are eligible for this waiver. For projects commissioned after this date, graded transmission charges will apply as follows:
– 25% of the applicable ISTS charges for projects commissioned between January 1, 2031, and December 31, 2031.
– 50% of the applicable ISTS charges for projects commissioned between January 1, 2032, and December 31, 2032.
– 75% of the applicable ISTS charges for projects commissioned between January 1, 2033, and December 31, 2033.
– 100% of the applicable ISTS charges for projects commissioned from January 1, 2034, onwards.
To encourage Pumped Storage Plant (PSP) development, the waiver of ISTS charges for PSP projects is now linked to the project’s award date rather than its commissioning date. This change applies to cases where construction work is awarded on or before June 30, 2025.
Furthermore, the ISTS charges for drawing energy from energy storage projects will now be available to individual users of the project, provided that at least 51% of the energy used for charging the storage system is from renewable sources. This change is necessary because future storage projects may be shared by multiple users, and only some of them may meet the 51% criteria individually, even if the aggregate level falls short.
Lastly, if a project is eligible for transmission charge waivers based on its original Date of Commissioning (COD), the same benefit will continue to apply if the COD is extended by the competent authority. This provision aims to provide confidence to investors who make decisions based on present circumstances but may face COD extensions beyond the relevant applicable transmission charge waiver date due to reasons beyond their control.
