GRID STABILITY AND ENERGY STORAGE

Key Highlights:

• India projects a Battery Energy Storage System (BESS) capacity requirement of 47.24 GW / 236 GWh by 2031-32, with an estimated investment of ₹3.49 lakh Crores.
• Pumped Storage Plant (PSP) capacity is projected to reach 26.69 GW / 175 GWh by 2031-32, requiring an investment of ₹1.29 lakh Crores.
• These storage systems are crucial for managing variability from Renewable Energy (RE) integration and ensuring grid stability.
• The government has implemented comprehensive policy, regulatory, demand-side, and supply-side measures to promote Energy Storage Systems (ESS).
• Key initiatives include the ISTS Charges Waiver for BESS and PSP projects and a Production-Linked Incentive (PLI) Scheme for Advanced Chemistry Cell manufacturing.

Detailed Insights:

• The Electricity Rules were amended in December 2022 to recognize ESS as an integral part of the power system across generation, transmission, and distribution.
• ESS were included in the Harmonised Master List of Infrastructure in October 2022, facilitating access to long-tenure and lower-cost financing.
• Guidelines for Resource Adequacy Plans by State utilities now incorporate energy storage for meeting peak demand and ensuring system reliability.
• A National Framework for Promotion of Energy Storage Systems was issued in September 2023, providing a roadmap for deployment and market integration.
• CEA Regulations have been notified to include safety requirements and construction standards for BESS.
• CERC allowed storage-based resources to provide ancillary services, supporting real-time grid balancing.
• Tariff-Based Competitive Bidding (TBCB) Guidelines have been notified for transparent procurement of BESS and PSPs.
• Viability Gap Funding (VGF) is provided for the development of 43.8 GWh BESS capacity to enhance financial viability.
• The PLI Scheme for Advanced Chemistry Cell manufacturing aims to establish 50 GWh capacity, with 10 GWh earmarked for grid-scale stationary storage.
• Enabling Infrastructure Support is provided for hydro PSP projects, with varying amounts based on project capacity.
• CERC has allowed separate grid connectivity during non-solar hours, facilitating storage-based shifting of power.
• Consumers are permitted to develop, own, lease, or operate energy storage systems through an amendment to the Electricity Rules in September 2025.

Key Concepts Involved:

• Battery Energy Storage System (BESS): A system that stores electrical energy in batteries for later use, crucial for grid stability.
• Pumped Storage Plant (PSP): A type of hydroelectric energy storage that stores energy by pumping water from a lower reservoir to an upper reservoir.
• Grid Stability: The ability of an electric power system to maintain a steady state of operation under normal and disturbed conditions.
• Renewable Energy (RE) Integration: The process of incorporating variable renewable energy sources like solar and wind into the existing electricity grid.
• ISTS Charges Waiver: Exemption from charges levied for using the Inter-State Transmission System for electricity transmission.
• Viability Gap Funding (VGF): Financial support provided by the government to infrastructure projects that are economically justified but not financially viable.
• Production-Linked Incentive (PLI) Scheme: A government scheme offering incentives to companies for increasing domestic manufacturing.