Waiver of Inter-State Transmission System (ISTS) Charges for Energy Storage System (ESS) Projects – Ministry of Power Order dated June 10, 2025

Posted On - 10 June, 2025 • By - Jidesh Kumar

Overview

On June 10, 2025, the Ministry of Power, Government of India, issued a significant order granting 100% waiver of ISTS charges for certain categories of Energy Storage System (ESS) projects, with an implementation window up to June 30, 2028. This initiative aligns with India’s broader renewable energy and grid stability goals.

Key Provisions of the Order

a. Eligibility for 100% ISTS Charges Waiver

  • Hydro Pumped Storage Projects (PSP): Must have construction awarded on or before June 30, 2028.
  •  Co-located Battery Energy Storage Systems (BESS): Must be commissioned by June 30, 2028, and the power stored must be consumed in a different state from where it is generated.

 b. Co-location Requirement

The BESS must be co-located with a Renewable Energy (RE) project and connected to the same ISTS sub-station as the RE generator.

 c. Non-Co-located BESS

These will continue to follow the existing rules of the Ministry of Power (MoP) and the Central Electricity Regulatory Commission (CERC) and will not qualify for the waiver.

 d. Deadline

 No waivers shall be granted for any project commissioned after June 30, 2028.

Impact and Strategic Implications

BenefitExplanation
Cost ReductionEliminates transmission charges, reducing total project costs
Renewable IntegrationFacilitates grid stability and efficient RE absorption
Inter-State SharingEnables power balancing across regions through ESS
Action WindowDevelopers and investors must act before mid-2028 to avail benefits

Recommendations

  •  Project Developers should assess project timelines to ensure commissioning or award dates fall within the eligibility window.
  • Investors may view this waiver as a significant opportunity for cost optimization and faster ROI in ESS projects.
  • Legal Teams must align Power Purchase Agreements (PPAs) and ISTS connectivity agreements in line with this order.

Regulatory References

  •  Order issued by Ministry of Power, Government of India, dated June 10, 2025.
  • Related CERC and MoP guidelines applicable for non-co-located BESS.