There is a need to update the current Electricity Act to incorporate provisions for ensuring the deployment of storage infrastructure according to a joint report by the Federation of Indian Chambers of Commerce and Industry, and EY.

The report titled Battery Storage-The Next Big Energy Frontier said, “Since, there is no section on energy storage in the Electricity Act, there is a need of an updated Act which defines energy storage.”

Power distribution companies

The report said that there is a need of a revised Regulatory Framework for power distribution companies (DISCOMs). Highlighting the provisions that need to be updated, the report suggested that the Central Electricity Regulatory Commissions and the State Electricity Regulatory Commissions can introduce some guidelines to provide clarification about requirement of licence for setting up energy storage systems.

There is a need to create grid interconnection standards for the use of storage on a stand-alone basis and as part of generation, transmission and/or distribution assets, the report added.

The report also said that the DISCOMs would need monetary support to encourage deployment of storage systems. “The financial health of most utilities is not good in India. Thus, they need monetary support from government to invest in this opportunity,” the report said.

Energy storage projects

“One way in which government can provide financial help is by setting up a fund for accelerating the deployment of grid scale energy storage projects by DISCOMs in the early years. The government in turn can be benefited as they can explore learnings from these projects, which can help market adoption by addressing technology, policy and commercial risks,” the report said.

Speaking at the event to mark the launch of this report, Additional Secretary (Energy), NITI Aayog, R P Gupta said “Hopefully in short period of time a new policy will come in place to encourage domestic manufacturers...What we have estimated is that if we come out with proper policies and solutions for energy efficiency then the total energy requirement can be reduced by 20 per cent.”