Author: PPD Team Date: 03/04/2025
The Central Electricity Authority (CEA) has confirmed that the recently announced requirement to co-locate energy storage systems (ESS) with solar power plants will apply only to future tenders. Ongoing and past projects, including schemes like the PM Surya Ghar Muft Bijli Yojana, will continue under their existing rules without any new ESS obligations.
Earlier, the Ministry of Power had issued an advisory recommending that all renewable energy implementing agencies include a minimum 2-hour ESS, equivalent to 10 per cent of the installed solar capacity, in upcoming solar tenders.
Key details of the CEA advisory
The CEA recommends that all new solar tenders include ESSs, with at least 10% of the installed capacity and a minimum storage duration of two hours. Tender documents must also ensure compliance for energy availability during non-solar hours.
This is expected to improve grid reliability and optimise renewable energy use. Distribution companies may also mandate two-hour ESS for rooftop solar to manage excess power injection during peak solar hours.
ESSs can function in two modes:
- Single-cycle operation: Charges from the solar plant and discharges in the evening.
- Double-cycle operation: Charges from both the solar plant and the grid during low demand, discharging when solar generation is unavailable.
Impact on the power sector
ESSs help balance renewable energy fluctuations, ensuring a steady power supply. As of December 31, 2024, India had 4.86 GW of installed ESS capacity, with the National Electricity Plan projecting a need for 73.93 GW/411.4 GWh by 2031-32 to support 364 GW of solar and 121 GW of wind capacity.
To promote storage adoption, the government has introduced legal status for ESS, energy storage obligations, transmission charge waivers, and captive status for stored energy.
CEA estimates suggest the mandate could drive 14 GW/28 GWh of ESS capacity by 2030. Battery storage costs have also fallen from over Rs 8-Rs 9 per unit in 2022 to Rs 6-Rs 7 per unit in 2024. Currently, 2.5 GW/4.9 GWh of solar and BESS projects are under tendering, while 4.6 GW/6.7 GWh have been awarded.