CERC proposes tariff rules for integrated energy storage systems

The Central Electricity Regulatory Commission (CERC) has released draft amendments to formally include Integrated Energy Storage Systems in the tariff structure for thermal power stations and interstate transmission systems. The proposals, issued on December 1, 2025, aim to create a clear method for calculating supplementary tariffs for storage units, using defined cost, operational, and energy charging norms.

The draft “Central Electricity Regulatory Commission (Terms and Conditions of Tariff) (Second Amendment) Regulations, 2025” seeks to revise the 2024 tariff regulations. It introduces a separate tariff framework for storage systems installed with coal, lignite, or gas-based generating stations, as well as interstate transmission systems. The notification also adds definitions for battery cycle, round-trip efficiency, and declared capacity.

Generating companies or transmission licensees that commission a storage system will need to apply for a supplementary tariff within 30 days of its commercial operation date. The tariff will include fixed storage charges based on the annual fixed cost of the system and supplementary energy charges. The energy charges will account for the cost of electricity used for charging, adjusted for round-trip efficiency and auxiliary consumption. Charging power can be sourced from the host plant, other stations, or the open market.

The draft sets operating norms for ESS, including a normative plant availability factor of 90 per cent, round-trip efficiency of 85 per cent, and auxiliary consumption at 5 per cent. Operation and maintenance costs are fixed at 2 per cent of the capital cost, with an annual escalation of 5.25 per cent for the first two years. A base return on equity of 14.00 per cent is proposed for storage systems treated as additional capitalisation.

The amendments also define the approval process for additional capital expenditure and set formulas for calculating and paying supplementary capacity and energy charges. They outline how gains from storage services provided in the open market or as ancillary services will be shared. Updated filing formats will require detailed technical and financial data on storage systems.

Regulations 51 and 52 are proposed to take effect from April 1, 2024. The remaining provisions will apply from the date of the official notification. Stakeholders can submit comments until December 30, 2025. A public hearing will be held through video conference on January 2, 2026.

The featured photograph is for representation only.