The Ministry of Power has issued an order for a waiver of the interstate transmission system (ISTS) charges on electricity generated from new hydropower projects as part of its commitment to meet its power requirement from renewable energy sources.
Solar and wind power projects already have access to the waiver.
According to a statement by the Ministry, by 2030, the government plans to generate 500 GW from non-fossil energy sources. "Hydropower projects, being clean, green and sustainable will be of paramount importance in our clean energy transition journey" the statement read.
Hydropower projects were declared renewable sources of energy by the Government of India in March 2019. However, the waiver of ISTS charges, provided for solar and wind projects, had not been extended to hydropower projects.
ISTS charges will now be waived for new hydropower projects, for which construction work is awarded, and a power purchase agreement is signed before 30 June 2025, in an effort to eliminate this discrepancy and provide a level playing field for hydro projects.
For Hydro Power Projects where construction work is awarded and PPA is signed after 30.06.2025, the ISTS charges will be levied as follows:
The waiver/concessional charges indicated in the table above will be applicable for 18 years following the date of commissioning and will be allowed only for interstate transmission charges, not losses.
This step is expected to provide a boost to the hydro sector, which will also contribute to the improvement of India's water security and provide development benefits to hilly states namely North Eastern States, Uttarakhand, Jammu and Kashmir, Himachal Pradesh, etc. where hydropower is found in abundance.
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