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ISTS Waiver for Pumped Storage and Co-located BESS Projects Until 2028

The Ministry of Power has approved a 100% interstate transmission system (ISTS) charges waiver for pumped storage projects (PSPs) and co-located battery energy storage systems (BESS), provided their construction or commissioning occurs on or before June 30, 2028. The waiver applies to BESS only if the power is consumed outside the host state, and co-location is defined as being at the same ISTS substation as the associated renewable project.

Non-co-located BESS projects will be subject to ISTS charges per existing Ministry and CERC guidelines. Projects missing the June 2028 deadline will not be eligible for the waiver, highlighting a firm cut-off date for cost-saving incentives. This move is part of the government's effort to accelerate the deployment of energy storage and hybrid renewable systems as India’s grid demand peaks.

Earlier, in 2022, the Ministry extended ISTS waivers for renewables up to June 2025. Post this, projects commissioned between July 2025 and June 2026 will bear 25% of applicable ISTS charges. CERC also expanded waiver eligibility in 2024 to include offshore wind and hydropower.

This latest extension is crucial, as developers have warned that without such waivers, many renewable projects would face higher costs, project delays, and bottlenecks, especially those with pending PPAs. The waiver policy is a key enabler for achieving India’s energy transition and storage capacity targets.