Trends in ISTS Green Open Access Market in India
Date of release: March 2025
The Interstate Transmission System (ISTS)-based renewable energy (RE) projects facilitate power delivery between states. In India, utilities have traditionally relied on Interstate Transmission System for power transmission to bridge the gap between the availability and demand faced by local distribution companies (DISCOMs). Since 2020, Interstate Transmission System-based tenders have accounted for almost one-fourth of the share in the cumulative issuance capacity of all utility-scale RE tenders in India.
From 2022 onwards, favorable market conditions such as waivers on ISTS transmission charges and the introduction of general network access (GNA) regulations have opened the Interstate Transmission System market for green open access (OA). Interstate Transmission System green open access (OA) will play a crucial role as C&I entities across India seek to make their energy consumption more sustainable.
ISTS-based green OA projects address specific state issues, including limited opportunities for RE development and regulatory barriers that restrict access to green power for commercial and industrial (C&I) consumers across India. Moreover, the capacity utilization factor (CUF) for Interstate Transmission System green OA projects is at least 5-10% higher than that of corresponding intra-state (InSTS) RE projects. Due to the larger scale of Interstate Transmission System projects, the cost of setting up Interstate Transmission System and InSTS projects is approximately the same. With current waivers on ISTS transmission charges, the landed cost of Interstate Transmission System green OA power is also roughly equivalent to that of InSTS.
ISTS transmission waivers are a significant driver of the Interstate Transmission System green OA market’s growth. These waivers will decrease by 25% annually from July 2025 to June 2028, after which no waivers will apply to Interstate Transmission System projects, except for offshore wind and those set up for green hydrogen production.
Below table showcases end-use cases which will determine likely ISTS green OA market size in India by 2030.
The specified end-use cases indicate that the Inter-State Transmission System (ISTS) could achieve a green open access (OA) capacity of around 40 GW by 2030, provided that transmission bottlenecks are resolved, and no other significant obstacles emerge. This will represent approximately one-third of green OA capacity in India in 2030.
The primary risk factor hindering the growth of the Interstate Transmission System green OA market is the delay in the readiness of Interstate Transmission System infrastructure. Existing substations are overstressed, and building new Interstate Transmission System interconnection capacity takes significantly longer than the development timelines for renewable energy projects. Developers often face long waiting periods of over a year to obtain ISTS connectivity. Furthermore, when Interstate Transmission System connectivity becomes available, priority is usually given to DISCOM Power Purchase Agreement (PPA) projects, leaving open-access projects in a state of uncertainty.
Moreover, C&I consumers are just beginning to recognize the benefits of ISTS power and are becoming aware of the unanticipated connection delays that can affect the commissioning of Interstate Transmission System green OA projects. Removing the waivers at this stage could hinder the development of a nascent and untapped market that is just starting to take shape. Therefore, extending Interstate Transmission System 100% waivers for at least three more years until 2028 is crucial for the ongoing development of Interstate Transmission System green OA projects.
Power transmission through the Interstate Transmission System, combined with consumption by commercial and industrial (C&I) consumers across different states, reflects the Indian government’s “One Nation, One Grid, One Frequency” initiative. Similar to the InSTS green OA, the Interstate Transmission System market is expected to grow organically, primarily benefiting larger C&I consumers. With no upper limit on capacity, the expansion of the Interstate Transmission System market will be essential for Indian industries to achieve full decarbonization, a goal that will become increasingly important in the coming years.
Table of Contents
- What is an ISTS green OA project?
- ISTS transmission infrastructure in India
- Key Drivers and Benefits
- Higher project capacity utilization (CUF) factor
- General network access (GNA) regulations
- ISTS transmission charges waivers
- Overcoming unfavourable conditions for local RE development
- Landed Cost Analysis for Interstate Transmission System
- ISTS/CTU transmission charges
- ISTS landed cost across states
- Prevalent ISTS business models in India
- Operational ISTS green OA Projects in India
- “Project JAI” by AMPLUS SOLAR
- Part of “Project Trinity” by Oriano solar
- AMPIn Energy ISTS Solar Project
- Risks and Challenges
- Insufficient ISTS transmission infrastructure
- Approaching ISTS transmission charges waiver deadline
- The application process is complicated
- State attractiveness for Interstate Transmission System green OA
- Way Forward
- ISTS waivers extension uncertain
- Viable co-existence of InSTS and ISTS green OA
- Shorter-term transactions to dominate
- GNA is likely to be modified for renewable energy transactions
- Conclusion
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