The Ministry of Power has put forth draft amendments to Rule 18 of the Electricity Rules, 2005, which aim to establish a regulatory framework for Energy Storage Systems (ESS). This proposal allows ESS to operate either as standalone systems or as integrated components of generation, transmission, or distribution networks.
These amendments represent a significant development in recognizing ESS as flexible infrastructure assets within India’s power sector. The draft states that ESS can be developed, owned, leased, or operated by various stakeholders, including generating companies, transmission and distribution licensees, consumers, system operators, or independent energy storage service providers. This broad scope indicates the government’s intention to encourage participation in energy storage and foster innovative business models.
A crucial aspect of the proposed amendments is that ESS will adopt the legal status of its owner, ensuring clarity in its regulatory treatment under Indian electricity law. Additionally, the draft clarifies that even if an ESS is not physically located alongside the asset it supports—such as a generation plant or distribution network—it will still maintain the owner’s legal status as long as it is owned and operated by that entity. For operational purposes, such installations will be treated as independent storage elements when it comes to scheduling and dispatch.
Another forward-thinking clause in the draft allows the developer or owner of an ESS to lease, rent, or sell storage capacity, either in full or in part, to any consumer, utility, or Load Despatch Centre. This provision is expected to pave the way for storage-as-a-service models, enhance capacity monetization, and stimulate the growth of a competitive energy storage market in India.
The Ministry has invited comments and suggestions from stakeholders by July 10, 2025. The proposed changes are anticipated to significantly influence policy regarding the integration, operation, and regulation of energy storage systems, which are increasingly recognized as vital for grid stability, renewable energy integration, and managing peak demand.
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