MoP issues order for waiver of ISTS charges on new hydropower projects

The Ministry of Power (MoP) has issued an order for the waiver of Inter-State Transmission system (ISTS) charges on transmission of electricity generated from new hydro-power projects. The Government of India declared hydro power projects as a renewable source of power in March, 2019. However, waiver of inter-state transmission charges, provided to solar and wind projects had not been extended to hydro power projects. 

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

The waiver or concessional charges as shown in table above shall be applicable for a period of 18 years from the date of commissioning of the hydropower plants. The waiver shall be allowed for Inter-state transmission charges only and not losses. The waiver would be made applicable from the prospective date.

This step is expected to provide a boost to the hydro sector and will help improve India’s water security and bring development benefits to hilly states namely Northeastern States, Uttarakhand, Jammu and Kashmir, Himachal Pradesh amongst others.