RERC Notifies BESS Regulations to Boost Grid Stability and Renewable Integration

The Rajasthan Electricity Regulatory Commission (RERC) has notified the Rajasthan Electricity Regulatory Commission (Battery Energy Storage Systems) Regulations, 2026, establishing a comprehensive regulatory framework for the deployment, ownership, and operation of Battery Energy Storage Systems (BESS) across the state’s electricity ecosystem.

The new regulations are aimed at enabling large-scale deployment of battery storage to support renewable energy integration, enhance grid reliability, and create new market opportunities for storage operators, utilities, and consumers. The framework allows battery systems to be deployed across generation, transmission, distribution, and consumer segments while maintaining a technology-neutral approach within battery storage technologies.

The regulations were finalised following an extensive stakeholder consultation process that included 11 written submissions and a public hearing, during which developers, utilities, and industry associations suggested changes to improve clarity around ownership models, planning mechanisms, operational procedures, and safety norms.

One of the key decisions taken by the Commission was to clarify the scope of the framework while allowing flexibility for future technologies. Although the regulations currently apply only to battery energy storage systems, the Commission added a provision allowing the framework to be extended to other storage technologies, such as pumped hydro storage, until separate regulations are issued.

In a significant move to maintain operational neutrality, the Commission removed the State Load Despatch Centre (SLDC) from the list of entities eligible to own battery storage assets. Instead, the SLDC will function exclusively as the nodal agency responsible for system operation, scheduling, and market coordination, ensuring that it remains an independent grid operator without commercial ownership interests.

The regulations also introduce a formal operational framework for standalone battery energy storage systems, which will be required to comply with scheduling, metering, and settlement requirements. Until a state-level deviation settlement mechanism is issued, the framework will adopt provisions of the Central Electricity Regulatory Commission deviation settlement mechanism on a mutatis mutandis basis.

Planning for energy storage has also been strengthened under the new framework. Distribution companies and the State Transmission Utility will now be required to incorporate storage planning within the state’s resource adequacy framework. The State Transmission Utility will prepare a consolidated intra-state energy storage plan to ensure coordinated deployment across the electricity system.

For grid-scale projects, the Commission has retained a minimum project capacity of 1 MW with a two-hour storage duration, citing the need for administrative efficiency and effective grid integration. However, exemptions have been provided for smaller systems such as distribution transformer-level storage and behind-the-meter installations by consumers. Additionally, battery systems co-located with generation assets and used primarily for ancillary services may be allowed to operate with shorter durations depending on operational requirements.

To improve financial viability of storage projects, the regulations explicitly allow BESS operators to provide multiple grid services, enabling revenue stacking. Storage systems will be permitted to participate in ancillary services markets, energy trading, and other grid-support functions simultaneously or sequentially, subject to technical capability and operational procedures to be specified by the SLDC.

Consumer participation has also been incorporated in the framework. Consumers and prosumers will be allowed to install behind-the-meter battery storage systems up to their contracted demand. These systems can participate in demand response programs and, in the future, vehicle-to-grid initiatives. Electricity exported from such systems under net metering or net billing arrangements will be settled through existing regulatory frameworks and will not require SLDC scheduling.

The regulations also introduce provisions for aggregators, enabling them to pool multiple small-scale battery systems and participate in the electricity market as a single entity. This move is expected to support the growth of distributed energy resources and improve grid flexibility.

Tariff provisions under the framework require that procurement of storage capacity by licensees be conducted through transparent tariff-based competitive bidding. Bid documents must clearly specify responsibility for charging energy, treatment of energy losses, and settlement mechanisms. The Commission may also approve multi-part tariffs and performance-linked payments for ancillary services.

In terms of environmental and safety compliance, all battery installations must adhere to technical and safety standards issued by the Central Electricity Authority and other applicable authorities. The regulations also align battery disposal and recycling with the Battery Waste Management Rules, 2022, which place end-of-life management responsibility on producers under the Extended Producer Responsibility framework.

To ensure regulatory certainty, the regulations include a savings clause, under which existing power purchase agreements, bidding processes, and projects that have achieved financial closure or commenced construction prior to the notification of the regulations will remain unaffected.

The Commission stated that the new framework is designed to accelerate energy storage deployment in Rajasthan while ensuring grid security, transparency in procurement, and opportunities for consumer participation. With Rajasthan already emerging as one of India’s largest renewable energy producing states, the regulations are expected to play a key role in supporting the state’s transition toward a more flexible and reliable power system.