Government waives ISTS changes from new hydropower projects

The waiver of interstate transmission charges, which had previously been granted to solar and wind projects, had not been extended to hydropower projects.

In a further step to realise the Government of India’s commitment to achieving its power requirements from renewable energy sources, the Ministry of Power has issued an order for the waiver of Inter-State Transmission System (ISTS) charges on the transmission of electricity generated from new hydropower projects. The aforementioned waiver is already available for solar and wind energy projects.

The government has set an ambitious goal to have 500 GW of generation capacity from non-fossil energy-based sources by 2030. Hydropower projects that are clean, green, and sustainable will be of paramount importance in our clean energy transition journey. They are also essential for the integration of solar and wind power, which are intermittent in nature.

In acknowledgement of the aforesaid inherent qualities of hydropower, the Government of India declared hydropower projects as renewable sources of power in March 2019. However, the waiver of inter-state transmission charges provided to solar and wind projects had not been extended to hydropower projects.

In order to remove this discrepancy and to provide a level playing field to hydro projects, the power ministry has now decided to extend the waiver of ISTS charges on the transmission of power from new hydropower projects for which construction work is awarded and a PPA is signed on or before June 30, 2025.

This step is expected to provide a boost to the hydro sector, which will also help improve India’s water security and bring development benefits to hilly states, namely the Northeastern States, Uttrakhand, Jammu and Kashmir, Himachal Pradesh, etc., where most of the hydro potential is located.