MNRE clarifies no NOC needed for ESS merchant sale before RE commissioning

The Ministry of New and Renewable Energy (MNRE) has clarified that a No-Objection Certificate (NOC) from intermediary or end procurers is not required when energy storage system (ESS) power, charged from non-renewable sources, is sold through merchant or third-party routes before the associated renewable energy (RE) project is commissioned.

In an office memorandum dated April 11, 2026, MNRE stated that it issued the clarification after examining representations from industry associations and reviewing the Guidelines for Tariff Based Competitive Bidding Process for Procurement of Firm and Dispatchable Renewable Energy (FDRE).

The ministry noted that the FDRE guidelines define ESS power charged from non-RE sources as non-RE power. It further clarified that the right of first refusal under para 14.5 applies only to RE power injected from renewable generating sources such as solar or wind. This provision does not apply to ESS discharge when the system is charged from non-RE sources.

MNRE highlighted a scenario where a battery energy storage system (BESS) is commissioned before the associated RE project. In such cases, developers may charge the BESS from the grid. The discharged power does not qualify as RE power and cannot be supplied under the power purchase agreement (PPA), leaving merchant or third-party sale as the available route.

The ministry concluded that provisions relating to right of first refusal and NOC requirements under FDRE PPAs become applicable only after at least one RE-generating component is commissioned. Therefore, no NOC is required for ESS power sold through merchant or third-party arrangements before RE commissioning.

The memorandum was issued with the approval of the Secretary, MNRE, and circulated to Grid Controller of India Limited, Solar Energy Corporation of India Limited (SECI), NTPC Limited, NHPC Limited, SJVN Limited, the Ministry of Power, the Central Electricity Authority (CEA), and Central Transmission Utility of India Limited (CTUIL) for further action.

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