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Business News/ Industry / Energy/  Govt announces waiver of transmission charges for offshore wind
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Govt announces waiver of transmission charges for offshore wind

Under the updated guidelines, offshore wind power projects commissioned on or before Dec 31, 2032, through power purchase agreements or on a merchant basis, will be exempt from ISTS charges for a duration of 25 years from the date of project commissioning

To promote development of pump storage plants, the criteria for availing the complete waiver of ISTS charges for PSP projects has now been linked to the date of award of the project rather than commissioning of the project.Premium
To promote development of pump storage plants, the criteria for availing the complete waiver of ISTS charges for PSP projects has now been linked to the date of award of the project rather than commissioning of the project.

New Delhi: The union ministry of power on Monday announced a waiver of Inter-State Transmission (ISTS) charges on the transmission of electricity generated offshore wind sources.

Under the updated guidelines, offshore wind power projects commissioned on or before December 31, 2032, through power purchase agreements (PPA) or on a merchant basis, will be exempt from ISTS charges for a duration of 25 years from the date of project commissioning. According to the ministry, projects commissioned after this deadline will be subject to ISTS charges following a specified trajectory.

As per the trajectory for offshore wind power projects commissioned from January 1, 2033, to December 31, 2034, the applicable ISTS charges will be 25% and that from January 1, 2034, to December 31, 2035, the applicable ISTS charges will be 50%. From January 1, 2035, to December 31, 2036, the ISTS charges will be 75% and the charge would be 100% from January 1, 2037.

In another major decision, the government has decided extend the waiver on ISTS for green hydrogen or green ammonia projects till December 2025 from 30 June 2030. This decision has been taken to facilitate wider execution of offshore wind energy initiatives, to promote the expansion of green hydrogen or green ammonia projects and to encourage the offtake of renewable energy from energy storage system projects, an official statement said.

The trajectory for green hydrogen/green ammonia plants commissioned after December 31, 2030, would include a 25% ISTS charge from January 1, 2030, to December 31, 2031. From January 1, 2032, to December 31, 2033, the applicable ISTS charges will be 50%. From January 1, 2034, to December 31, 2035, the applicable ISTS charges will be 75%. From January 1, 2036, onwards, the applicable ISTS charges will be 100%.

In a partial modification of the existing order, the waiver of ISTS charges for Hydro PSP projects will now be subject to the ‘award of construction work’ instead of the previous requirement of ‘commissioning.’

To promote development of Pump Storage Plants (PSP), the criteria for availing the complete waiver of ISTS charges for PSP projects has now been linked to the date of award of the project rather than commissioning of the project. This shall be applicable in cases where construction work is awarded on or before 30th June, 2025.

The ISTS charges on drawing of energy from energy storage projects, which was earlier granted to the project, will henceforth be available for each individual user of such project. The individual user will get this benefit, if at least 51% of the energy utilized by the user for charging the storage system is renewable energy. 

Earlier the limit of 51% was at project level. This change has been proposed in view of the fact that in future the capacity of such storage projects will be shared by many discoms or other users and only some of them may meet this criteria of 51% individually while the same may not be met in an aggregate manner at storage project level.

Moreover, in case a project is eligible for waiver of transmission charges based on its original COD (Date of Commissioning), the same benefit will continue to be made available if commercial operation date (COD) is extended by competent authority. This is considered necessary to give confidence to the investors who are taking investment decisions based on the present circumstances but their COD may extend beyond the relevant applicable date for transmission charge waiver for reasons beyond their control.

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Published: 29 May 2023, 09:11 PM IST
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