The Ministry of Power has issued an order stating that no interstate transmission charges (ISTS) and losses will be levied on solar and wind power projects commissioned up to March 31, 2022.
The waiver will apply to the solar and wind projects for the entire duration of their Power Purchase Agreements (PPAs), which would be 25 years.
The announcement effectively extends the existing Inter-State Transmission System (ISTS) charge waiver for solar projects beyond its previous expiration date of December 31, 2019. It likewise extends an existing exemption for wind projects that had been set to expire on March 31, 2019.
To avail the benefit of the waiver, the solar and the wind projects must have these prerequisites:
- The solar and wind projects must have been awarded through competitive bidding.
- There should be proper Power Purchase Agreements (PPAs) executed for the sale of such generation capacity to the Distribution Companies (DISCOMs) and other entities for the compliance with their Renewable Purchase Obligations (RPOs).
The most significant factor of this order is that now the government has allowed for the waiver of the charges for the long-term purchase of power by entities other than the state-run distribution companies.