CERC in India has unveiled a draft amendment that seeks to formalise a tariff framework for integrated energy storage systems (ESS) installed alongside coal, lignite or gas-based generating stations and interstate transmission systems.
Key Elements of the Proposal
- Storage systems linked to power plants or transmission networks will have a supplementary tariff, which includes a fixed storage charge and separate energy-charge components.
- The fixed charge will include standard financial components such as depreciation, interest on loans, return on equity, operation and maintenance costs, and working capital — similar to other regulated power sector assets.
- The energy charge will account for the cost of electricity used to charge the storage system. This will be adjusted for factors such as round-trip efficiency, auxiliary consumption, and the source of charging (whether from the same power plant, another generator, the grid, or the market).
- After commissioning an energy storage system, the operator must submit tariff-determination details within 30 days, based on audited capital expenditure.
Technical & Operational Standards Proposed
The draft sets technical norms to ensure consistent regulation, including:
- A minimum round-trip efficiency of 85%
- Auxiliary consumption capped at 5%
- An availability requirement of 90%
- A defined depreciation period of 12 years for battery assets
These standards aim to bring clarity for both developers and utilities, helping them plan storage projects with predictable regulatory expectations.
Why This Framework Matters
- The proposal formally recognises energy storage as part of the regulated power infrastructure, helping attract investment and reduce uncertainty.
- As renewable energy generation grows, storage plays a crucial role in balancing supply, supporting peak demand, and improving grid stability.
- Clear tariff mechanisms allow utilities and developers to recover both fixed and variable costs, enabling sustainable business models and accelerating large-scale storage adoption.
Next Steps
Stakeholders have been invited to provide feedback on the draft. Once finalised, this tariff structure is expected to become a major milestone in India’s transition towards a more flexible, storage-supported power grid.
