Waiver of ISTS charges on RE projects could grow open access projects

According to open access solar projects developers, waiving the inter-state transmission charges (ISTS) on solar projects and other renewable energy (RE) projects would promote the growth of open access projects connected to the ISTS network.

The Ministry of Power (MoP) had announced that ISTS charges waiver applies to RE projects like solar, wind, pumped hydro storage and battery energy storage systems (BESS), commissioned until June 2025. These open access projects could be set up for captive use or sold to an entity under competitive bidding, power exchanges and bilateral agreements.

According to a report, India has installed about 935 MW of open access solar capacity in the first nine months of 2021, increasing capacity by 143%, compared to 385 MW installed during the same period last year.

The MoP has also approved waivers on RE projects for 25 years. BESS projects would get a waiver of charges for 12 years.

According to an official, waiving the ISTS charges will catalyse open access solar projects and help market growth. It will also have a significant impact on net landed cost savings. With this, open access developers can connect their projects to the ISTS network to supply power to multiple states from their utility-scale open access solar projects.

The ISTS charges will be applied to RE projects commissioned after 30 June 2025, in a phased manner. According to the order, 25% of the ISTS charges will be valid on projects commissioned between 1 June 2025 and 30 June 2026. The charges will eventually increase by 25% annually, and 100% of the ISTS charges will be levied by 1 July 2028.

According to a solar developer, the ISTS waiver would increase the geographical reach of open access solar developers, and they would be able to supply power to the consumers in several states from one project. It will also reduce net landed cost for consumers by Rs 0.70 per kWh.

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