EPTA calls for flexibility on ISTS issue; urges government to offer window to projects nearing completion

Bengaluru, 23 June 2025: As India advances towards its ambitious target of 500 GW renewable energy (RE) capacity by 2030, the Electric Power Transmission Association (EPTA), the apex association for transmission companies, has urged the government to adopt a more flexible approach on the planned withdrawal of Inter-State Transmission System (ISTS) waiver. The association suggested the government to explore alternative viable options that would offer critical relief to renewable energy developers.

As part of its suggestion, EPTA proposed a milestone-based eligibility framework that would allow projects with significant progress, but delayed due to external challenges, to continue availing the ISTS waiver. According to EPTA, these projects should be given a few more months to complete construction so that they come under the ambit of ISTS waiver.

As another alternative, the association recommended a more gradual phase-out of the waiver, starting with a 10% withdrawal every year instead of the proposed 25%. Such a calibrated approach would significantly ease the impact of the waiver’s withdrawal on the cost of green power, thereby allowing RE power to stay competitive and attract more investments in this key sector.

The ISTS waiver, a critical enabler of India’s green energy transition since its introduction in 2016, has been extended only once and is now slated for phased withdrawal starting July 1, 2025. The industry is of the view that the proposed withdrawal at 25% per year will disrupt ongoing projects, jeopardize investments, and undermine cost competitiveness, especially for commercial and industrial (C&I) consumers who already pay among the highest electricity tariffs globally.

Mr. G.P. Upadhyaya, Director General, EPTA, emphasized, “The government has been very supportive of the sector and has introduced number of policy measures, particularly in the last six months. We are very hopeful that the government will again take a more pragmatic view on the ISTS waiver issue.

We are not seeking a blanket extension. We are only proposing that the projects which have achieved key development milestones, such as securing financial closure, acquiring at least 50% of required land, and placing key equipment orders, should be granted a 6-9 month window to avail the ISTS waiver benefits.”

The industry’s request aligns with the recent milestone-linked extensions granted for pumped hydro and battery storage projects, which will continue to enjoy the waiver till June 2028.

EPTA also highlighted the critical role of the transmission sector in enabling India’s renewable energy ambitions. With over $100 billion investment expected in transmission over the next 8-10 years, the sector’s growth is foundational to the success of the green energy ecosystem.

Among other key issues for the transmission sector, EPTA stressed upon the critical need for scaling up domestic manufacturing of HVDC 765 kV equipment under the PLI scheme, given that European imports are currently fully booked and expensive, while restrictions on Chinese imports continue to persist.

EPTA also highlighted the planned offshore transmission line from the Andaman Islands to Paradip in Odisha, under the One Sun, One World, One Grid initiative, which will enable the shift from fossil fuel-based power in the islands to green energy from the mainland. The association also noted India’s growing grid strength and future potential for cross-border connections, including possible links from Andaman to Singapore and from Gujarat to the UAE.