The Interstate Transmission System (ISTS)-based renewable energy (RE) projects facilitate power delivery between states. In India, utilities have traditionally relied on ISTS for power transmission to bridge the gap between the availability and demand faced by local distribution companies (DISCOMs). Since 2020, ISTS-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 ISTS market for green open access (OA). ISTS green open access (OA) will play a crucial role as C&I entities across India seek to make their energy consumption more sustainable. By connecting to the ISTS network, a C&I consumer with manufacturing locations spread across multiple states can sign a single Power Purchase Agreement (PPA) with a developer to meet its green power needs.
After incorporating the exemptions and ISTS transmission waivers, the net OA charges for ISTS connected projects across India’s leading ten C&I states broadly vary from Rs 2 – 3.5 per unit for RE projects.
ISTS transmission waivers are a significant driver of the ISTS 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 ISTS projects, except for offshore wind and those set up for green hydrogen production.
Source: MoP, JMK Research
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 ISTS 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 ISTS 100% waivers for at least three more years until 2028 is crucial for the ongoing development of ISTS green OA projects.
The 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 by 2030.
The primary risk factor hindering the growth of the ISTS green OA market is the delay in the readiness of ISTS infrastructure. Existing substations are overstressed, and building new ISTS 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 ISTS connectivity becomes available, priority is usually given to DISCOM Power Purchase Agreement (PPA) projects, leaving open-access projects in a state of uncertainty.
Power transmission through the ISTS, 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. The ISTS green OA market is expected to grow organically, primarily benefiting larger C&I consumers. With no upper limit on capacity, the expansion of the ISTS market will be essential for Indian industries to achieve full decarbonization, a goal that will become increasingly important in the coming years.
This article is an extract from JMK Research’s new report titled “Trends in ISTS Green Open Access Market in India”
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