Govt may delicense setting up of standalone energy storage systems 


Energy storage systems shall be an integral part of the power system under the Electricity Act. The government is also looking to delicense the setting up of standalone energy storage systems (units not co-located with renewable energy generation), power minister RK Singh said at a meeting with RE developers and energy storage industry representatives to discuss the draft Policy on energy storage systems.

The draft policy aims at the creation of a technology-agnostic storage system across the value chain of the electricity sector, viz, at generation, transmission, and distribution levels. Currently, pumped hydro storage facilities are the most common form of grid energy storage in India.

Energy storage systems will benefit power generators, State-owned distribution companies, grid operators, and other players in the electricity value chain as these facilitate peak shifting, peak shaving, ramp up/ramp down, and frequency control in the system and enhance the utilization of the transmission system.

Highlighting the elements of the proposed policy, Singh stated that storage will henceforth be a part of the Renewable Purchase Obligation. Also, the curtailment of renewable energy will be penalized under the provisions of the Act.

As per the proposed policy, energy storage system developers shall be granted inter-state transmission system connectivity under general network access. So, they can sell or purchase power from any part of the country. 

The energy storage facility can be set up and used by power generators to meet their generation obligation under the firm supply contract.

The minister said the quantum of energy storage systems included with round-the-clock (RTC) renewable energy shall be counted as Renewable Purchase Obligation (RPO) for storage. Also, Renewable Energy Certificates (RECs) may be issued to ESS developers. 

Discoms can set up their own storage, or procure or lease storage capacity from public or private energy storage system developers. Any sale of electricity from storage or sale/lease of storage space may be allowed through open competitive bidding, Power exchange, or through tariff fixed under Section 62 of the Electricity Act. 

The policy proposes renewable energy transmission charges be waived both at the time of charging the storage as well as at the time of selling the stored RE. 

The participants were requested to submit any further suggestions within 15 days.


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