In a significant move to catalyze India’s energy storage ecosystem, the Union Ministry of Power has extended the waiver of Inter-State Transmission System (ISTS) charges for energy storage projects. The waiver will now apply to all Pumped Storage Projects (PSPs) awarded and Battery Energy Storage Systems (BESS) commissioned on or before June 30, 2028.
Announced by Union Minister Shri Manohar Lal during a press conference, the decision marks a strategic step in making energy storage more affordable and accessible, while strengthening India’s transition to a cleaner and more resilient energy grid. “This extension is crucial for meeting India’s growing storage needs and optimizing the utilization of our transmission network,” the Minister stated.
The waiver is expected to lower the levelized cost of storage, enabling greater integration of intermittent renewable energy sources such as solar and wind into the national grid. By eliminating transmission costs for these projects, the policy creates a favorable investment environment, particularly for developers seeking to deploy utility-scale storage solutions.
The announcement was part of a broader package of power sector reforms and achievements highlighted by the Ministry. These included the commissioning of the first 250 MW unit of the Tehri Pumped Storage Project, the launch of a ₹5,400 crore Viability Gap Funding (VGF) scheme for 30 GWh of battery storage, and the addition of a record 34 GW of generation capacity during FY 2024–25—29.5 GW of which came from renewable energy.
Industry experts have welcomed the ISTS waiver extension as a timely intervention. Given India’s ambitious renewable energy targets, robust storage infrastructure is vital for balancing supply-demand fluctuations and ensuring grid reliability. The waiver also aligns with the government’s recent push to expand Ultra High Voltage (UHV) transmission systems and modernize grid infrastructure.
With India’s total installed capacity now exceeding 472 GW and national energy shortages reduced to just 0.1%, the extension of ISTS benefits further underscores the country’s commitment to a sustainable and efficient energy future. Storage developers and investors are expected to ramp up project planning and execution to take advantage of the favorable policy window before mid-2028.
