The ISTS waiver is not a blanket promise of free transmission: in 2026, the project’s commissioning date, eligibility route and applicable central orders determine the charge, while losses and most state-level open-access charges remain payable.
Key Takeaways
- The Ministry of Power’s 21 June 2021 order gave eligible solar and wind projects commissioned by 30 June 2025 a waiver of ISTS charges, but expressly excluded transmission losses.
- Later instruments introduced commissioning-linked treatment and specific conditions. Buyers should verify the operative CERC Sharing Regulations, Ministry orders and project evidence rather than rely on a headline waiver.
- The waiver does not automatically remove intra-state transmission, wheeling, cross-subsidy surcharge, additional surcharge, SLDC fees, scheduling charges or deviation exposure.
- A commercial model should show a base case, a lost-waiver case and a delayed-commissioning case. The benefit belongs in the landed-cost bridge, not in the generation tariff alone.
- This article is general commercial information, not legal advice; project-specific eligibility should be confirmed with regulatory and technical advisers.
What did the original ISTS waiver actually cover?
The Ministry of Power’s 21 June 2021 order, reproduced by the India Transmission Portal extended the waiver of inter-state transmission system charges for solar and wind projects commissioned up to 30 June 2025. The same order said the relief applied to ISTS charges only, not losses. Scheduled energy can still be reduced by applicable transmission and distribution losses when the charge component is waived.
The order also addressed pumped-storage plants and battery energy storage systems commissioned by the deadline, subject to at least 70% of annual pumping or charging electricity coming from solar and/or wind. It described a gradual levy for qualifying storage: 25% of short-term open-access charges for the first five operating years, increasing in 25-point steps after each third year until 100% from the twelfth year. The Ministry’s National Framework for Promoting Energy Storage Systems later placed ISTS relief among a wider set of storage-support measures, while also stressing storage’s grid, peak-shifting and ancillary-service roles.
Eligibility is not inferred merely because electricity is renewable. The applicable commissioning date, source, bidding or PPA route, extension treatment, connectivity and later amendments all matter. The approach is documentary: identify the provision, obtain evidence and allocate loss of eligibility in the PPA.
How does a commissioning window change the buyer’s landed cost?
A deadline creates a discontinuity. Two similar projects can produce different delivered prices if one qualifies for a full waiver and the other attracts a partial or full ISTS charge.
| Cost item | Waiver-eligible case | Non-waiver or reduced-waiver case | Buyer’s diligence question |
|---|---|---|---|
| Generator PPA tariff | Contracted rate | Contracted rate | Is tariff adjustment permitted? |
| ISTS charge | Waived to eligible extent | Applicable share under current rules | Which order and commissioning window apply? |
| ISTS losses | Not waived by the 2021 order | Applicable | Who bears energy shortfall? |
| Intra-state transmission/wheeling | Usually separate | Usually separate | Which state order sets rates? |
| CSS and additional surcharge | Separate state-law questions | Separate state-law questions | Is captive status valid and maintained? |
| SLDC, scheduling and DSM | Remain relevant | Remain relevant | Who forecasts, schedules and settles? |
For an industrial buyer, landed cost should be calculated at the consumption meter. Start with the PPA tariff, gross up for losses, add all central and state network charges, add scheduling and QCA costs, then compare with the displaced grid tariff at matching time blocks. Our open-access solar guide explains the broader structure, while the state comparison shows why the receiving state remains decisive.
Do not treat an assumed waiver as a fixed 25-year saving. Model escalation, demand-charge interactions, curtailment, banking limits and change in law. Test zero, partial and full ISTS charges rather than one optimistic saving.
Which charges remain even when ISTS charges are waived?
The clearest error is to equate “ISTS charge waiver” with “no open-access charges.” The 2021 Ministry order expressly preserved losses. CERC’s consolidated Connectivity and GNA Regulations establish access and connectivity architecture, but do not erase state charges payable at the delivery end. CTUIL’s GNA portal also shows that GNA is an application-and-allocation framework, not a universal exemption certificate.
A receiving-state consumer may still face intra-state transmission charges and losses, distribution wheeling charges and losses, cross-subsidy surcharge, additional surcharge, standby charges, reactive-energy charges, SLDC fees and deviation settlement. Exact labels and rates differ by state and consumer configuration. Captive or group-captive structures may receive surcharge treatment only while statutory ownership and consumption tests are satisfied; the commercial background is covered in our group captive guide.
There is a narrow clarification in the 2021 order for an intra-state system used incidentally as part of inter-state conveyance: identified lines can be included in ISTS sharing, with reimbursement by CTU. That provision should not be generalized into a waiver for every state network segment between the ISTS interface and a factory.
How should a C&I buyer test waiver eligibility?
Which documents should be requested?
Request the connectivity grant, commissioning certificate, scheduled and actual COD records, PPA or award documents relevant to the claimed route, extension approvals, CTUIL correspondence and the generator’s written eligibility analysis. Reconcile plant capacity, injecting entity and source across documents. If storage is involved, request evidence of renewable charging or pumping compliance where the relied-on order requires it.
Which contract protections matter most?
Define “ISTS charges” separately from “losses” and “other open-access charges.” State who receives the economic benefit, who pays if eligibility is denied, and whether relief is frozen, passed through or adjusted under change in law. Set notice, evidence and dispute timelines. A general change-in-law clause is weaker than a clause written around the particular waiver assumption; our solar PPA guide provides a broader contract checklist.
What should happen if commissioning slips?
Require an updated landed-cost forecast before the long-stop date. The model should identify delay causes, any extension relief under the relevant order, probability of recognition and maximum buyer exposure. A contractual extension granted by the buyer does not itself extend a regulatory waiver. Avoid language guaranteeing an outcome controlled by CERC, the Ministry, CTUIL or another authority.
What decision framework works in 2026?
Use three gates. First, establish legal eligibility from primary documents. Second, establish operational deliverability through connectivity, GNA, state open-access approval and scheduling arrangements. Third, establish economics under downside sensitivities. A project should not pass because its quoted tariff is lowest if the quote silently assumes a disputed waiver.
For bid comparison, normalize every offer to the same delivery point, consumption profile and policy assumptions. Ask bidders to populate a charge matrix and identify every exclusion. Finance teams can then use the solar IRR methodology to test cash-flow consequences without confusing generator tariff with avoided cost.
A prudent approval memo records the source and date of every regulatory assumption and assigns an owner to monitor changes through commissioning and operation. Archive the relied-on order, amendment, eligibility correspondence and commissioning evidence with each model version.
Frequently Asked Questions
Is the ISTS waiver automatic for every solar open-access project?
No. Eligibility depends on the applicable order or regulation and facts such as commissioning timing, project route and compliance evidence. Renewable technology alone is insufficient.
Does the waiver eliminate transmission losses?
No. The Ministry’s 21 June 2021 order expressly said the waiver covered ISTS charges, not losses. Losses must be separately modelled.
Are wheeling and cross-subsidy surcharge also waived?
Not by the central ISTS waiver. These are separate state-level components, subject to the consumer’s structure and current state regulations.
Can a delayed project retain the waiver?
Possibly only where an applicable instrument recognizes the delay or extension and its conditions are met. A PPA extension alone does not establish regulatory eligibility.
Does GNA itself create waiver eligibility?
No. GNA provides access to the inter-state network. Charge liability and waiver eligibility arise under the relevant sharing regulations and government orders.
How should buyers compare bids across the phase-out?
Compare delivered cost under common assumptions, including full, partial and zero-waiver sensitivities. Require bidders to identify the legal basis and party bearing disallowance risk.
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