Andhra Pradesh Moves to Regulate Battery Storage Projects

Andhra Pradesh has unveiled draft regulations to formalise the planning, procurement and deployment of battery energy storage systems (BESS), aiming to boost renewable energy integration and improve the resilience of its electricity grid.

The Andhra Pradesh Electricity Regulatory Commission (APERC) released the draft rules this week, marking the state’s first comprehensive attempt to regulate large-scale battery storage and facilitate its participation in the electricity market.

The move comes as Andhra Pradesh targets more than 160 gigawatts (GW) of renewable energy capacity and up to 25 gigawatt-hours (GWh) of energy storage under its 2024 Clean Energy Policy, which envisions the state becoming a national “storage capital”.

Broad Coverage and Flexible Models

The draft rules apply to all electricity sector entities operating in Andhra Pradesh, including licensees, generating companies, renewable developers, aggregators, and storage service providers.

Battery storage systems can be developed by a wide range of actors – from government distribution companies and transmission utilities to private developers and consumers. They may be deployed in multiple ways: standalone grid-connected facilities, co-located with power plants, embedded in transmission and distribution networks, or as consumer-level "behind-the-meter" systems.

Aggregators will also play a pivotal role, able to pool smaller battery units from across locations and offer grid services such as frequency regulation, reserves, voltage support, and black start capabilities.

To qualify for procurement by DISCOMs or other licensees, individual projects must generally have a minimum power rating of 1 megawatt (MW) and a minimum energy capacity of four hours – except in the case of rooftop solar-connected systems.

Procurement and Cost Recovery

The Commission has made competitive bidding the default route for procuring storage capacity. Any storage services procured from third-party providers will be compensated through market-determined tariffs, while storage assets owned by state licensees will be regulated under traditional tariff norms based on prudent capital investment.

In the case of market-linked ancillary services, providers will be compensated based on clearing prices or methodologies approved by the Commission.

APERC said it will retain oversight of all major procurement and tariff decisions, and licensees will be required to seek prior approval for adding storage capacity.

Grid Management and Oversight

The draft assigns a central implementation role to APSLDC (Andhra Pradesh State Load Despatch Centre), which will oversee generator registration, scheduling, verification, and performance tracking, including metrics such as State of Charge (SoC), round-trip efficiency, and availability.

Distribution companies will be required to identify potential BESS sites, while APTRANSCO, the state transmission utility, will integrate BESS into its resource planning.

All systems must comply with technical standards set by India’s Central Electricity Authority (CEA), including guidelines on cybersecurity and battery waste disposal.

Public feedback on the draft is expected in the coming weeks before the Commission finalises the regulations.

The push underscores Andhra Pradesh’s growing commitment to balancing grid reliability with its ambitious renewable expansion plans, as India accelerates efforts to decarbonise its power sector.