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 hydropower projects, for which construction work is awarded and power purchase agreement (PPA) is signed on or before June 30, 2025.
The said waiver is already available to solar and wind power projects. Further, for the hydropower project whose construction work is awarded and PPA is signed between July 1, 2025, to June 30, 2026, 25 per cent of ISTS charges will be applicable. For a project whose construction work is awarded and PPA is signed between July 1, 2026, to June 30, 2027, 50 per cent of ISTS charges will be applicable, while for projects whose construction work is awarded and PPA is signed between July 1, 2027, to June 30, 2028, 75 per cent of ISTS charges will be applicable. Further, 100 per cent ISTS charges will be applicable for hydro projects from July 1, 2028. The waiver/ concessional charges will be applicable for a period of 18 years from the date of commissioning of the hydropower plants. The waiver will be allowed for inter-state transmission charges only and not losses. The waiver would be made applicable from prospective date. 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 states of Uttarakhand, Jammu and Kashmir, Himachal Pradesh, and north eastern states, among others.