ESS draft policy: Govt mulls making energy storage part of RPO, says RK Singh

• Govt plans to make ESS an integral part of the power system under the Electricity Act and setting up of standalone ESS a delicensed activity
• Under the policy, utilities may be penalised for curtailment of RE power

New Delhi: A draft policy in the works on the Energy Storage System (ESS) is likely to make setting up of standalone ESS a delicensed activity and storage a part of Renewable Purchase Obligation (RPO) and penalise utilities for curtailment of renewable energy (RE), Minister for Power and New and Renewable Energy RK Singh told a gathering of RE developers and government representatives at a recent meeting. According to the Ministry of Power, at a meeting held on January 25, Singh discussed the elements of the draft policy, which aims to promote the creation of storage systems on a large scale across the country, and sought comments from participants within 15 days.

Draft policy: ESS to be integral part of Electricity Act

The policy aims at the creation of technology-agnostic storage system across the value chain of the electricity sector — generation, transmission, and distribution levels. Singh stressed on the need to establish storage systems on a wide scale in the country. He informed that Energy Storage System shall be an integral part of the power system under the Electricity Act and that setting up of standalone ESS may be made as a delicensed activity.

"In the meeting held on 25th January 2022 with representatives of the industry, Shri RK Singh galvanised the industry representatives and called for their active participation in establishing storage systems and associated manufacturing industries domestically within the country," said the Power Ministry.

Draft policy: Energy storage essential for smooth energy transition

Energy Storage Systems will benefit power generating companies (gencos), power distribution companies (discoms) of states, grid operators, and other players in the electricity value chain. They will facilitate peak shifting, peak shaving, ramp up/ramp down, and frequency control in the system and enhance the utilisation of the transmission system. "ESS is considered essential for a smooth energy transition from coal-based to renewable sources and to a cleaner environment," said the Ministry of Power. Highlighting the elements of the proposed policy, Singh stated that storage will henceforth be a part of the Renewable Purchase Obligation.

Discoms can set up ESS or lease storage space

Singh also stated that the curtailment of renewable energy will be penalised under the provisions of the Act. As per the proposed policy, ESS developer shall be granted Inter-State Transmission System connectivity under General Network Access (GNA), allowing them to sell/ purchase power from any part of the country. Quantum of ESS included with Round-the-Clock (RTC) Renewable Energy shall be counted as Renewable Purchase Obligation (RPO) for storage, Singh told stakeholders. 

Renewable Energy Certificates (RECs) may be issued to ESS. Discoms/ Obligated entities can set up own storage or procure storage capacity or lease storage space from public or private ESS developers. Any sale of electricity from storage or sale/ lease of storage space may be through open competitive bidding or power exchange or through fixed tariff. The policy proposes that transmission cost for RE shall be waived both at the time of charging the storage as well as at the time of selling the stored RE. 

Backdrop

India is preparing for energy transition from fossil fuel to non-fossil fuel-based energy systems and aims to achieve a reduction of 1 billion tonnes in GHG/CO2 emission by 2030.  For this, India will install a total of 500 GW of non-fossil fuel capacity. Energy Storage Systems are going to play a larger role in facilitating the large-scale integration of the renewable energy sources as they are intermittent in nature.

In the recent COP-26 summit at Glasgow, India has upped its target of electricity from non-fossil fuel-based sources to 500 GW by 2030. About 50 percent of the total energy consumed by 2030 is expected to come from renewable sources. The country is also aiming to have Net Zero Emissions by 2070. Nearly 450 GW out of 500 GW will come from Renewable Energy sources. Energy Storage systems help in maximising the utilisation of renewable energy.

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