APTEL Upholds CERC’s Rejection of High-Cost Battery Storage Tariff

The Appellate Tribunal for Electricity (APTEL) has upheld a Central Electricity Regulatory Commission (CERC) order rejecting the adoption of a tariff discovered in a 2022 auction for a 500 MW/1000 MWh stand-alone battery energy storage system (BESS) project. The apex regulator cited inordinate delays and a sharp fall in storage prices as key reasons behind its order./ 

APTEL dismissed appeals filed by JSW Renew Energy Five and the Solar Energy Corporation of India (SECI) in this regard. The tribunal said the tariff of₹10.83 lakh per MW per month was no longer aligned with market conditions and its adoption would have caused undue loss to consumers while offering unintended gains to the developer.

Background

JSW was declared the winner of two 250 MW projects under SECI’s August 2022 auction. Letters of award were issued in January 2023, followed by a battery storage sale agreement with Gujarat Urja Vikas Nigam (GUVNL) in June 2023. A purchase agreement between JSW and SECI was signed in March 2024, after which SECI sought tariff adoption by CERC.

On January 2, 2025, CERC rejected the petition, pointing to delays of over a year and seven months in moving the adoption plea and highlighting that subsequent auctions had discovered tariffs in the ₹3.72–4.85 lakh per MW per month range. Notably, JSW itself had quoted ₹3.81 lakh per MW per month in SECI’s ESS-II auction in August 2024.

Tribunal’s Reasoning

APTEL said CERC was within its rights to examine market alignment and consumer interest under the Electricity Act. It rejected arguments that bids were not comparable due to differences in contract structure, noting that the Build-Own-Operate-Transfer (BOOT) model offered no real benefit to procurers or consumers.

The tribunal also clarified that JSW had no vested right until CERC approved the tariff and stressed that consumer interest remained paramount. “Unreasonable delay… would lead to unintended gains for the developer and wrongful loss to the public at large,” the order noted.

Significance

The ruling underscores regulatory scrutiny on tariff adoption in emerging technologies like battery storage, where costs are falling rapidly. Analysts said it also sends a strong signal to developers and nodal agencies to adhere to timelines and ensure discovered tariffs reflect prevailing market conditions.