MoP Advises REIAs To Co-Locate ESS With Solar Plants In Upcoming Tenders

India Can Add 100 GW Storage To Avoid Energy Shortage: Report

The Ministry of Power (MoP) has released an advisory on the co-location of energy storage systems (ESS) with solar plants. Its latest advisory aims to incorporate a minimum of a 2-hour co-located Energy Storage System (ESS) equivalent to 10% of installed solar capacity in future tenders. The notification stated, “This requirement will help mitigate intermittency issues and provide critical support during peak demand periods. A suitable compliance mechanism may also be explicitly mentioned in the bid document to ensure the availability of storage during non-solar hours.” Advisory mentioned, “To achieve this target, all Renewable Energy Implementing Agencies (REIAs) and State utilities are advised to incorporate a minimum of 2-hour co-located Energy Storage Systems (ESS).”

Challenges

The government’s latest notification aims to bridge the gap in grid stability, as variable renewable energy (VRE) sources are intermittent and may not be available for generation during periods of low renewable energy (RE) output or high demand. In this context, energy storage systems (ESS) would be essential to ensure grid stability, reliability, and optimal energy utilization. ESS can help address the intermittency challenges of RE projects by storing excess energy for use during low RE hours, ensuring a more reliable and stable grid.

The new rule said, “The Distribution licensees may also consider mandating 2-hour storage with rooftop solar plants. This would improve the reliability of supply at the consumer end while also providing relief to distribution licensees from over-injection during solar hours. By implementing the proposed storage clause, approximately 14 GW/28 GWh of storage can be installed by 2030. The recent decrease in battery prices may also help reduce power purchase costs during evening hours when solar generation is unavailable, and energy rates in the exchange are high.”

MoP regulation mentioned, “Additionally, to enhance grid stability, distribution licensees (Discoms) may consider mandating 2-hour storage with rooftop solar plants (RTS). The ESS can be operated in either single-cycle or double-cycle mode. The MoP’s latest policy aligns with India’s target of increasing the country’s non-fossil fuel capacity to 500 GW by 2030. To achieve this goal, the capacity of variable renewable energy sources, such as solar and wind, needs to be significantly enhanced.”

Co-Location

The rule mentioned, “The storage system can be run in either single-cycle operation, where it is charged using the co-located solar power and discharged during evening hours, or double-cycle operation, where, in addition to solar power, it can also be charged using energy from the grid during low-demand hours and discharged during peak hours (especially non-solar hours).”

Government latest rule added, “The integration of storage systems with solar power projects would not only support grid stability but also provide long-term economic benefits, such as improving the evening-time utilization of transmission lines constructed for evacuating solar power. This would reduce transmission requirements and charges, improve energy security, and enhance overall efficiency.”

As of December 31, 2024, the current installed capacity of ESS stands at 4.86 GW, which includes 4.75 GW of pumped storage projects (PSP) and 0.11 GW of battery energy storage system (BESS) projects. According to the National Electricity Plan published by the Central Electricity Authority, to integrate 364 GW of solar and 121 GW of wind capacity by 2031-32, India would require 73.93 GW/411.4 GWh of storage capacity (26.69 GW/175.18 GWh from PSP and 47.24 GW/236.22 GWh from BESS).

The latest advisory appears to acknowledge the challenge likely to accrue to the grid as solar spreads, but is likely to lead to many more issues as well. For one, adding storage to the mix across all solar plants will add some complexity, and costs, that might deter a few adopters. Hopefully it will not lead to a demand for subsidies on storage now, a pattern we have seen so far.