India: On May 30^th, 2023, the Central Government has decided to grant waiver of ISTS charges to off-shore wind energy projects commissioned on or before 31^st December 2032. Along with this, the government also decided to extend the waiver to Green Hydrogen and Green Ammonia projects from 30^th June 2025 to 31^st December 2030. This decision has been taken to facilitate wider execution of off-shore wind energy initiatives, to promote the expansion of Green Hydrogen / Green Ammonia Projects and to encourage the offtake of renewable energy from Energy Storage System Projects.

According to the Notification issued by Ministry of Power, a complete waiver of ISTS charges (Inter-State Transmission Charges) has been given for offshore wind power projects commissioned on or before 31^stDecember, 2032 for a period of 25 years from the date of commissioning of the Project. The off-shore projects commissioned from 1^stJanuary, 2033 would be given graded ISTS charges. Earlier, all wind energy projects were provided waiver up to 30^thJune 2025. Now, offshore wind would be treated separately, and waiver to these would grant up to 31^st December 2032 with graded transmission charges thereafter.

The government has also granted complete waiver of ISTS charges for a period of 25 years from the date of commissioning of the project, for Green Hydrogen/Green Ammonia production units, using Renewable Energy (commissioned after 8^th March 2019), Pumped Storage System or Battery Storage Systems or any hybrid combination of these technologies. The projects commissioned on or before 31^st December 2030 shall be eligible for this waiver. The projects after 31^st December 2030 will attract graded transmission charges thereafter. The decision effectively extends the applicability of waiver date from 30^th June 2025 to 31^st December 2030.

For offshore wind power projects, 25% of the applicable ISTS charges will apply to plants being commissioned between 2033 to 2034, 50 % of the applicable ISTS charges will apply to plants being commissioned between 2034 to 2035, 75 % of the applicable ISTS charges will apply to plants being commissioned between 2035 to 2036, and full ISTS charges will apply to plants being commissioned 2037 onwards. Similarly, for Green Hydrogen and Green Ammonia plants, 25% of the applicable ISTS charges will apply to plants being commissioned from 2030 to 2031, 50% of the applicable ISTS charges will apply to plants being commissioned from 2032 to 2033, 75% of the applicable ISTS charges will apply to plants being commissioned from 2034 to 2035, and full ISTS charges to apply to plants being commissioned 2036 onwards.

According to TechSci Research, the extension and waiver of the ISTS charges also open the interest of many key players who still did not participate in these projects on account of this supportive government strategy. With increasing focus on green chemicals including green hydrogen and green ammonia, the chemical companies expand and install the plant for the production of different green chemicals, which can lead to higher output and sales volume. This enables them to meet growing market demand and take advantage of new business opportunities. By expanding their facilities, chemical companies can produce more products and potentially capture a larger market share. With the production of environmentally friendly products with low carbon foot prints the chemical companies can achieve economies of scale, optimize their production processes, and lower per-unit costs. This can enhance their competitiveness and profitability in the market.

Moreover, in term of environment sustainability, the use of green ammonia and green hydrogen and wind energy will help to reduce the dependency of the country on imported fossil fuels and will help to reduce the carbon emission and shifted toward the green and clean future for India. In support of this, the Indian government released a blueprint in January 2023, for its determined National Green Hydrogen Mission (NGHM) for the production-linked incentives for producing green hydrogen. In addition to a shift to green ammonia would significantly reduce the Indian government’s massive fertilizer subsidy burden and boost energy self-reliance by cutting dependence on imports of expensive liquified natural gas (LNG) for fertilizer manufacturing. For instance, in 2022, ONGC and its partners decided to invest USD 6.2 billion in green energy projects to produce carbon-free hydrogen and green ammonia as part of an ambitious decarbonization drive.

As a result, domestically produced green hydrogen and ammonia can help reduce India’s dependence on imports for raw materials, enhance food security and limit emissions from fertilizer manufacturing this will improve the economy of India and enhance the position of India in the world with respect to the production of green chemicals and became one of the dominating countries for green ammonia and green hydrogen market.