ISTS Waiver
To promote the development of renewables in RE-rich states and encourage inter-state procurement of renewables, the central government allowed waiver of ISTS charges and losses for solar and wind projects in 2016. Through various subsequent orders, the Ministry of Power (MoP) extended the deadline of ISTS waiver for some solar and wind project categories commissioned till 30th June, 2025. Recently, the ambit of the waiver has been widened for green hydrogen, large hydro plants, pumped storage hydro (PSH) and battery storage (BESS). We have tracked the several amendments and evolution of the ISTS waiver framework since 2016 below.
MoP Order dated 23rd Nov, 2021
Date of Notification
23rd November, 2021
Wind
A. For projects commissioned up to 30th June, 2025, waiver of ISTS charges shall be applicable for the following:
1. Wind energy generation set up by any person/ entity. Power generated from such sources can be self consumed or sold to any entity either through competitive bidding, power exchange or through bilateral agreement.
2. For power generated from such energy as per RE bundling scheme issued by Ministry of Power on 16th November, 2021. Provided that evacuation of this power is being made from main substation of thermal/ hydro power plant and this does not lead to any additional cost in augmentation of transmission system. Further, no transmission charges for use of ISTS shall be levied, when solar and/or wind power from power plant situated at one thermal/ hydro generating station is supplying to procurers of another generating station, of same generating company, located at a different location.
B. ISTS charges shall be levied for wind projects commissioned after 30th June, 2025, gradually as per following trajectory:
1. Commissioned between 1st July 2025 and 30th June, 2026- 25% of applicable ISTS charges
2. Commissioned between 1st July 2026 and 30th June, 2027- 50% of applicable ISTS charges
3. Commissioned between 1st July 2027 and 30th June, 2028- 75% of applicable ISTS charges
4. Commissioned on or after 1st July 2028- 100% of applicable ISTS charges.
1. Wind energy generation set up by any person/ entity. Power generated from such sources can be self consumed or sold to any entity either through competitive bidding, power exchange or through bilateral agreement.
2. For power generated from such energy as per RE bundling scheme issued by Ministry of Power on 16th November, 2021. Provided that evacuation of this power is being made from main substation of thermal/ hydro power plant and this does not lead to any additional cost in augmentation of transmission system. Further, no transmission charges for use of ISTS shall be levied, when solar and/or wind power from power plant situated at one thermal/ hydro generating station is supplying to procurers of another generating station, of same generating company, located at a different location.
B. ISTS charges shall be levied for wind projects commissioned after 30th June, 2025, gradually as per following trajectory:
1. Commissioned between 1st July 2025 and 30th June, 2026- 25% of applicable ISTS charges
2. Commissioned between 1st July 2026 and 30th June, 2027- 50% of applicable ISTS charges
3. Commissioned between 1st July 2027 and 30th June, 2028- 75% of applicable ISTS charges
4. Commissioned on or after 1st July 2028- 100% of applicable ISTS charges.
Solar
A. For projects commissioned up to 30th June, 2025, waiver of ISTS charges shall be applicable for the following:
1. Solar energy generation set up by any person/ entity. Power generated from such sources can be self consumed or sold to any entity either through competitive bidding, power exchange or through bilateral agreement.
2. For power generated from such energy as per RE bundling scheme issued by Ministry of Power on 16th November, 2021. Provided that evacuation of this power is being made from main substation of thermal/ hydro power plant and this does not lead to any additional cost in augmentation of transmission system. Further, no transmission charges for use of ISTS shall be levied, when solar and/or wind power from power plant situated at one thermal/ hydro generating station is supplying to procurers of another generating station, of same generating company, located at a different location.
B. ISTS charges shall be levied for solar projects commissioned after 30th June, 2025, gradually as per following trajectory:
1. Commissioned between 1st July 2025 and 30th June, 2026- 25% of applicable ISTS charges
2. Commissioned between 1st July 2026 and 30th June, 2027- 50% of applicable ISTS charges
3. Commissioned between 1st July 2027 and 30th June, 2028- 75% of applicable ISTS charges
4. Commissioned on or after 1st July 2028- 100% of applicable ISTS charges
1. Solar energy generation set up by any person/ entity. Power generated from such sources can be self consumed or sold to any entity either through competitive bidding, power exchange or through bilateral agreement.
2. For power generated from such energy as per RE bundling scheme issued by Ministry of Power on 16th November, 2021. Provided that evacuation of this power is being made from main substation of thermal/ hydro power plant and this does not lead to any additional cost in augmentation of transmission system. Further, no transmission charges for use of ISTS shall be levied, when solar and/or wind power from power plant situated at one thermal/ hydro generating station is supplying to procurers of another generating station, of same generating company, located at a different location.
B. ISTS charges shall be levied for solar projects commissioned after 30th June, 2025, gradually as per following trajectory:
1. Commissioned between 1st July 2025 and 30th June, 2026- 25% of applicable ISTS charges
2. Commissioned between 1st July 2026 and 30th June, 2027- 50% of applicable ISTS charges
3. Commissioned between 1st July 2027 and 30th June, 2028- 75% of applicable ISTS charges
4. Commissioned on or after 1st July 2028- 100% of applicable ISTS charges
Applicability of order
Applicable prospectively, i.e., from date of issue of order (superseded all previous orders)
Storage
A. For Hydro PSP and BESS projects commissioned up to 30th June, 20225, waiver of ISTS charges shall be applicable for the following:
1. Electricity from solar and/or wind sources used by Hydro PSP and BESS projects and subject to at least 51% of annual electricity requirement for pumping of water in Hydro PSP or charging of BESS is met by use of electricity generated from solar and/or wind power plants.
2. Electricity generated / supplied from such Hydro PSP and BESS power plants as mentioned above.
B. ISTS charges shall be levied for Hydro PSP and BESS projects commissioned after 30th June, 2025, gradually as per following trajectory:
1. Commissioned between 1st July 2025 and 30th June, 2026- 25% of applicable ISTS charges
2. Commissioned between 1st July 2026 and 30th June, 2027- 50% of applicable ISTS charges
3. Commissioned between 1st July 2027 and 30th June, 2028- 75% of applicable ISTS charges
4. Commissioned on or after 1st July 2028- 100% of applicable ISTS charges
1. Electricity from solar and/or wind sources used by Hydro PSP and BESS projects and subject to at least 51% of annual electricity requirement for pumping of water in Hydro PSP or charging of BESS is met by use of electricity generated from solar and/or wind power plants.
2. Electricity generated / supplied from such Hydro PSP and BESS power plants as mentioned above.
B. ISTS charges shall be levied for Hydro PSP and BESS projects commissioned after 30th June, 2025, gradually as per following trajectory:
1. Commissioned between 1st July 2025 and 30th June, 2026- 25% of applicable ISTS charges
2. Commissioned between 1st July 2026 and 30th June, 2027- 50% of applicable ISTS charges
3. Commissioned between 1st July 2027 and 30th June, 2028- 75% of applicable ISTS charges
4. Commissioned on or after 1st July 2028- 100% of applicable ISTS charges
Clarifications on certain aspects
1. Waiver shall be applicable for a period of 25 years for solar, wind and hydro PSP or for a period of 12 years for BESS or for a period subsequently notified for future projects by central government, from date of commissioning of power plant.
2. Waiver is allowed for ISTS charges only and not losses. However, waiver of ISTS losses shall be applicable for projects whose bidding was completed up to 15th Jan, 2021.
2. Waiver is allowed for ISTS charges only and not losses. However, waiver of ISTS losses shall be applicable for projects whose bidding was completed up to 15th Jan, 2021.
Power Market
Waiver for ISTS charges shall be applicable for trading of electricity generated/ supplied from solar, wind, Hydro PSP and BESS projects in Green Term Ahead Market (GTAM) and Green Day Ahead market (GDAM) upto 30th June, 2025.
Green Hydrogen
For Green hydrogen production plants commissioned upto 30th June 2025, i.e., hydrogen produced using electricity produced from solar, wind, hydro PSP and BESS projects, ISTS charge waiver shall be applicable for a period of 8 years from the date of commissioning of such hydrogen plant.