The Ministry of Power has proposed amendments to Rule 18 of the Electricity Rules, 2005, aiming to establish a regulatory framework that recognizes Energy Storage Systems (ESS) as versatile infrastructure assets. According to the draft amendments, ESS can operate independently or be integrated with generation, transmission, or distribution networks, marking a significant advancement in how storage is integrated into India’s power landscape.
The draft specifies that ESS can be developed, owned, leased, or operated by a variety of stakeholders, including generating companies, transmission or 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.
Importantly, ESS will inherit the legal status of their owners, providing regulatory clarity regarding their treatment under Indian electricity law. A crucial provision clarifies that even if an ESS is not co-located with the asset it supports—such as a generation plant or distribution network—but remains owned and operated by it, it will still retain the owner’s legal status. However, for operational purposes such as scheduling and dispatch, these ESS installations will be regarded as independent storage elements.
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 likely to facilitate the growth of storage-as-a-service models, enable capacity monetization, and stimulate the development of a competitive energy storage market in India.
The Ministry has invited stakeholders to provide their comments and suggestions by July 10, 2025. These proposed changes are expected to play a vital role in shaping policy around the integration, operation, and regulation of energy storage systems, which are increasingly recognized as crucial for grid stability, renewable energy integration, and managing peak demand.
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