New Delhi: The National Solar Energy Federation of India (NSEFI) has urged the government to extend the Inter-State Transmission System (ISTS) charge waiver to Renewable Energy (RE) projects getting commissioned by June 2026. In a letter to the Prime Minister's Office (PMO), the NSEFI has said that waiver should be extended to projects meeting a specific criterion relating to connectivity application status, financial closure, land acquisition beyond the 50 percent threshold, and if orders for equipment have been made.
It said that the extension will protect the viability of numerous renewable energy projects facing risks from delays beyond the control of developers, a source aware of the development said.
The federation, representing a broad spectrum of stakeholders across the solar value chain, stated that while the ISTS waiver, originally announced by the Ministry of Power (MoP), has played a "pivotal role in making renewable power more competitive", its delayed implementation by the Central Electricity Regulatory Commission (CERC) in February 2023 left many developers in a limbo.
ISTS charges are the fees levied for using the transmission infrastructure to move electricity between states. They are imposed to cover the costs relating to building and maintaining transmission lines and other infrastructure required for interstate electricity transfer. An industry expert said that renewable energy projects worth nearly Rs 5 lakh crore would be impacted if the waiver of ISTS charges is not extended. The waiver will expire by the end of this month on June 30.
"Several RE developers made early investments, securing land, achieving financial closure, and signing definitive agreements based on the original MoP notification," the federation said in its letter. However, due to aspects like the nearly two-year lag in CERC's ratification and other uncontrollable factors, these developers are now at risk of missing the commissioning deadline of June 30, 2025, making them ineligible for the waiver.
The NSEFI flagged multiple aspects, including prolonged approvals under Section 68(1) of the Electricity Act due to an ongoing Supreme Court case on Great Indian Bustard conservation, delay in transmission planning and connectivity effectiveness, and delayed commissioning of critical transmission infrastructure.
"Several developers applied for ISTS connectivity well before June 2023, in line with the ISTS waiver policy timelines. However, the effectiveness dates for granted connectivity are being issued much later, often in 2026 or 2027, due to delays in transmission system planning and execution," the NSEFI said.
The federation has proposed a milestone-based eligibility framework for the waiver. It has recommended that projects that had applied for transmission connectivity on or before June 30, 2023, achieved financial closure, acquired at least 50 percent of the land required for their development, and placed orders for wind turbine generators and/or inverters must be considered for the purpose of availing the ISTS waiver.
It argued that the approach is consistent with CERC's regulations and recent Ministry of Power notifications granting waiver flexibility to pumped storage and battery storage projects. "The proposed eligibility criteria will ensure that only serious and committed renewable energy developers, who had factored the ISTS waiver into their project design and commercial commitments, benefit from this extension," the federation said.
