The Union ministry of power recently issued a waiver of interstate transmission system (ISTS) charges on transmission of electricity generated from new hydropower projects.
With this, the power ministry has brought hydropower at par with solar and wind projects that are already enjoying such waiver.
The rationale
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 our clean energy transition journey. They are also essential for the integration of solar and wind power, which are intermittent in nature.
In acknowledgement of the aforesaid inherent qualities of hydropower, the Centre, in March 2019, declared hydropower as a renewable energy source. However, waiver of ISTS inter-state transmission charges, provided to solar and wind projects had not been extended to hydropower projects.
This waiver will be applicable to hydropower projects for which construction work has been awarded and PPA signed after June 30, 2025, as per the following scheme:
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 hydro power plants. The waiver shall be allowed for ISTS charges only and not to losses. The waiver would be made applicable from prospective date.
Also read: PGCIL Sees More Business Opportunity In ISTS Projects
Boosting hydropower
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 hilly states namely North Eastern States, Uttrakhand, Jammu & Kashmir, Himachal Pradesh etc. where most of the hydropower potential is located.
According to information available with Central Electricity Authority, around 13 GW of hydropower projects (each with installed capacity exceeding 25 mw) were under active construction, as of October 31, 2022.
