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POLICY
IESA seeks clear policy framework for energy storage IESA has sought clear definition and policy framework for energy storage in its recommendation to the Ministry of Power on the draft Electricity Act (Amendment) Bill, 2020. Below is the summary of IESA recommendation to the Ministry of Power.
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he Ministry of Power on March 17 issued the draft Electricity Act (Amendment) Bill, 2020, with the view to usher in major reforms in the power sector by addressing issues of contract enforcement, payment security mechanism, and other crucial issues. The ministry had invited comments, observations, and suggestion from stakeholders by June 5. IESA, being a leading industry body working in the space of energy storage, electric vehicle, renewable integration and microgrids, proposed the following amendments to the the Electricity Act 2003:
Defining energy storage
IESA has suggested for an appropriate definition of energy storage in the Electricity Act. The definition should factor in flexible nature and applications, and its categorization as generation, transmission and/or distribution asset.
Storage purchase obligation
Instead of a Hydro Purchase Obligation, which include significant environment and operational limitation, Storage Purchase Obligation (SPO) should be advocated. SPO can comprise various existing and emerging costeffective solutions that provide appropriate flexibility. Discoms should be free to choose specific form of procurement, either hybrid RE + storage or RE and storage independently.
Inclusion of missing definitions in Electricity Act
The Electricity Act should explain terms which 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.
Control of transmission and use of electricity
The following may be added at the end of section 54 of Electricity Act. “There shall be automatic exemptions for allowed micro-grids, 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)].
Power quality
Smart grids
Allow the aggregation of open access electricity, and access to renewable energy
Defining energy storage
It should be the duty of every supply licensee to ensure power quality (covering voltage, harmonics, frequency, surges, etc.) as per norms prescribed by the relevant authority. The licensee should be allowed to offer different qualities at different price points subject to regulatory approval as well as meeting a minimum power quality as mandated. Power quality might require the creation of new services and markets, such as ancillary services, and these need to be enabled by the relevant authorities within two years.
Section 42 of the Electricity Act provides a minimum threshold on contract demand, this should be removed especially for EV charging when the aggregated contract demand is more than 1MW. Currently, the policy allows for open access to avail RE within the State only after paying the cost component to Discoms as fixed by State Electricity Regulatory Commission, this clause should be relaxed as market forces would then ensure competition and drive in systemic efficiency. | May-June 2020
New clause should be added to Section 61. 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 microgrids, EV (V2G and charging infra integration with utilities), differentiated supply (time of use, guaranteed supply, power quality, demand response or dynamic load management).
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 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.
