IESA Proposes to Have Policy Framework for Energy Storage in Electricity Act

IESA has submitted its recommendations on the proposed Draft Electricity (Amendment) Bill, 2020, proposing a policy framework for energy storage in the bill

India Energy Storage Alliance (IESA), India’s leading alliance working in the space of energy storage, electric vehicle, renewable integration & microgrids has submitted its comments/recommendations on the proposed Draft Electricity (Amendment) Bill, 2020 recently.

The recommendations submitted to the Ministry of Power (MoP) have been put forward by consulting over 100+ energy storage ecosystem players from IESA. The proposed amendment had tried to address a series of challenges facing the sector and provided measures to improve regulatory discipline, private sector participation, next-gen reforms, the financial health of Discoms, and given thrust on renewable energy sector among others.

Debi Prasad Dash, Executive Director, IESA said that IESA welcomes the amendment in The Electricity Act 2003 by the Ministry of Power. “We have proposed the ministry to have a clear policy framework regarding energy storage in the act. India has emerged as one of the fastest-growing markets for renewable energy and energy storage technologies could be the key enabler for RE Integration and grid stability. Defining energy storage under the electricity act could be helpful to start ancillary services & frequency regulation through energy storage as a flexible asset.

“It will also help to enable Electric Vehicles charging infrastructure, V2G concepts and Microgrids integration with expanded grid connectivity in the long run. We hope the ministry will consider IESA ‘s recommendations to make the Indian electricity grid more resilient and reliable.”

However, several current issues and technological developments in recent years were majorly missing from the amendment. The alliance has highlighted these issues and recommendations in its submission on behalf of energy storage and electric vehicle industry, some of which are:

Defining Energy Storage – IESA has recommended defining energy storage appropriately in the Electricity Act. The definition should factor in flexible nature and applications, and its categorisation as generation, transmission and/or distribution asset.

Mentioning National Energy Storage Mission/Policy in the Act –The policy for energy storage sector has evolved over the past few years in India and there is expected to be significant performance improvement in energy storage technologies and cost reduction over the next decade.

With the Ministry of New and Renewable Energy (MNRE) releasing multiple tenders that include storage and with National Mission on Transformative Mobility and Battery Storage looking to set up 50 GWh advanced energy storage manufacturing capacity, it is highly recommended to include direction from Electricity Act to frame policy framework required for adopting storage technologies in suitable areas.

Storage Purchase Obligation – Instead of a Hydro Purchase Obligation which includes significant environment and operational limitation, Storage Purchase Obligation (SPO)should be advocated. SPO can comprise of various existing and emerging cost-effective solutions that provide appropriate flexibility. Discoms should be free to choose a specific form of procurement, either hybrid RE + storage or RE and storage independently.

Control of Transmission and Use of Electricity –There shall be automatic exemptions for allowed microgrids, renewable generation, back-up power, energy storage, electric vehicles, as well as other allowed uses as added to this list from time to time [by the Central or State Electricity Regulatory Commission(s)].

Smart Grids –. Building upon the National Smart Grid Roadmap released by MoP, all states shall produce roadmaps to enable the following: Consumer production participation, renewable energy integration (subsidies, feed-in-tariffs or generation-based incentives), future grid connectivity with micro-grids, EV (V2G and charging infra integration with utilities), differentiated supply (time of use, guaranteed supply, power quality, demand response or dynamic load management.

Inclusion of Missing Definitions in Electricity Act – The Electricity Act should define terms that are used widely in the Act but remain undefined, such as: Renewable Energy, Net metering, Cogeneration, Storage, Energy banking, Must-run status, Renewable Energy Certificate, Reliability, Flexibility, Grid Balancing.

The Draft Electricity (Amendment) Bill, 2020 was floated by the MoP, Government of India, on April 17, 2020, to amend the Electricity Act. The MoP had requested the stakeholders to provide their comments/suggestions on the draft bill within 21 days from the date of release of the draft bill which later got extended to June 5, 2020.