The Ministry of Power has issued a new directive updating the provisions related to the waiver of Inter-State Transmission System (ISTS) charges for Energy Storage Systems (ESS), particularly for Hydro Pumped Storage Projects (PSPs) and Battery Energy Storage Systems (BESS). This latest update is a continuation of several earlier orders, including those dated 23rd and 30th November 2021, 1st and 6th December 2022, and more recently, 29th May and 9th June 2023.
As per the new order, Hydro PSP projects that are awarded for construction on or before 30th June 2028 will receive a 100% waiver on ISTS charges. Similarly, co-located BESS projects commissioned on or before 30th June 2028 will also be eligible for a full waiver of ISTS charges. However, this is subject to the condition that the power stored and transmitted from these BESS units is consumed outside the state in which the project is located.
To qualify as a co-located project, the BESS must be connected to the same ISTS substation as the associated Renewable Energy (RE) project. For such projects, this co-location is critical to avail the 100% waiver.
No ISTS charge waiver will be granted to Hydro PSPs whose construction begins after 30th June 2028 or to co-located BESS projects commissioned after the same date. For BESS projects that are not co-located, the applicable waivers will continue to be governed by the existing orders from the Ministry of Power and relevant CERC regulations.
This notification has been issued with the approval of the Minister of Power and Housing & Urban Affairs and is part of the government’s continued push to promote clean energy and strengthen the integration of storage technologies into the national grid.
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