MoP issues guidelines for procurement & utilisation of BESS

The Ministry of Power (MoP) has notified a new resolution of the Guidelines for the procurement and utilisation of battery energy storage systems (BESS) as part of generation, transmission and distribution assets, along with ancillary services.

Specific Objectives of the Guidelines: 

• To facilitate procurement of BESS, as part of individual RE power projects or separately, for addressing the variability/firming power supply / increasing energy output / extending the time of supply from an individual RE project or a portfolio of RE projects, augmentation of existing RE Projects and/or to provide ancillary, grid support and flexibility services for the grid.
• To facilitate procurement of BESS for optimum utilization of transmission and distribution network.
• To ensure transparency and fairness in procurement processes/ and to provide for a framework for an Intermediary Procurer as an Aggregator / Trading licensees / Implementing Agency for the inter-state/intra-state sale-purchase of power.
• To provide standardization and uniformity in processes and a risk-sharing framework between various stakeholders, involved in the energy storage and storage capacity procurement, thereby encouraging competition and enhanced bankability of the Projects.

Scope of the Guidelines: 

1. Applicability of Guidelines: These Guidelines are being issued under the provisions of the Electricity Act, 2003, for procurement of energy from BESS by the ‘Procurers’, through competitive bidding, from grid- connected Projects to be set up on “Build-Own-Operate” or “Build-Own-Operate-Transfer” basis, with following minimum project size and bid capacity requirements:
   (i) For Intra-State Projects: Minimum individual project size of power rating of 1MW and above with suitable energy rating based on application at one site with minimum bid capacity of 1MW; and
   (ii) For Inter-State Projects: Minimum individual project capacity of 50 MW and above with suitable energy rating based on application at one site with minimum bid capacity of 50 MW at the minimum voltage level as specified by the extant CERC regulations/Detailed Procedure.
2. The provisions of these Guidelines shall be binding on the BESSD /Procurer/ Intermediary Procurer/End Procurer/Implementing Agency and the Authorised Representative of the Procurer.
3. Business Cases:
   (i) RE supply with BESS: In this case, the BESS is included as part of the RE Project, and ownership of the RE and BESS assetslies with the Generator. These Projects may also be utilized to meet Peak power and firm dispatchable RE requirements of Procurers.
   (ii) BESS with transmission infrastructure: This model is aimed at maximization of the utilization of the transmission Asset, increasing duration of usage of transmission system and Strengthen Grid Stability. These systems will enable large-scale optimization of transmission infrastructure by optimum utilization of transmission capacity and reducing network congestion. As a result, the requirement of augmentation of evacuation and transmission infrastructure gets drastically reduced.
   (iii) Storage for ancillary services/ balancing services / flexible operations: The BESS, with fast ramp rate, is particularly suited for second-by-second management of interchange flows. The system operator (for eg. RLDC/NLDC and SLDCs) may use BESS for frequency control and balancing services to manage the inherent uncertainty/variations in load and generation.
   (iv) Storage for Distribution: This model aims at maximization of the utilization of the Storage Asset and strengthening DISCOM operations. Connected at the load centres, it may be suitably utilized by the Discom to manage its peak load, grid resilience, portfolio management and flexible operations. BESS can also be used to facilitate large scale expansion of electric mobility segment as part of major consumers for the Discoms. BESS can also be used as an optimum tool to achieve asset shifting by the Discoms, thereby increasing asset life.
   (v) Standalone BESS for the Arbitrage operation which may be used by the Developer / owner or by the lessee including merchant operation.
   (vi) The BESS developer/owner may sell storage space for a particular duration. In this case he will get capacity charges.
   (vii) Any other business cases as found suitable by Procurers / Intermediary procurers / beneficiaries/ Generators
4. In case of systems which contain RE generating stations along with BESS as a single Project (co-located or multi-located), the respective Standard Bidding Guidelines issued for procurement of power from Solar, Wind and Hybrid Power Projects, or the Unified Standard Bidding Guidelines, as issued by the Ministry of Power, shall be applicable.
5. The BESS may be charged by RE power or non RE power or through a combination of RE and non-RE power, However, when it seeks to supply RE power, it will need to the charged with RE power only.

The complete notification containing the new Guidelines can be accessed here.