In a big boost for renewable energy sources, the Union Power Ministry on Friday, December 2, issued an order for the waiver of inter-state transmission system (ISTS) charges on the transmission of electricity generated from new hydropower projects. The move is to realise the India government's commitment to achieve its power requirement from renewable energy sources. The said waiver is already available to solar and wind power projects.

The Narendra Modi government has set an ambitious plan to have 500 GW of generation capacity from non-fossil energy-based sources by 2030.

Hydropower projects, being clean, green, and sustainable will be of paramount importance in the country’s clean energy transition journey.

Back in March 2019, the government declared hydropower projects as renewable sources of power. However, the waiver of inter-state transmission charges, provided to solar and wind projects, had not been extended to these projects.

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In order to remove this discrepancy and to provide a level playing field to hydro projects, the Ministry of Power will extend the waiver of ISTS charges on the transmission of power from new hydropower projects, for which construction work is awarded and PPA is signed on or before June 30, 2025.

The waiver 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 cover the losses. The waiver would be made applicable from the prospective date.

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This step is expected to provide a boost to the hydro sector, which will also help improve India’s water security and bring development benefits to the hill states, namely the North Eastern states, Uttarakhand, Jammu and Kashmir, Himachal Pradesh, etc. where most of the hydro potential is located.

(Edited by : Shoma Bhattacharjee)