The Andhra Pradesh Electricity Regulatory Commission (APERC) has taken a pivotal step toward energy storage leadership with the release of its draft regulation for the Planning, Procurement, Deployment, and Utilisation of Battery Energy Storage Systems (BESS). This development aligns with the state’s ambitious Integrated Clean Energy Policy, 2024, which targets 25 GWh of energy storage capacity to integrate over 160 GW of renewable energy.
Setting the Framework for a Battery-Powered Future
The draft regulation, issued on June 30, 2025, provides a comprehensive structure for how BESS assets can be owned, deployed, and operated within Andhra Pradesh. It creates a multi-stakeholder ecosystem, empowering:
- Distribution and Transmission Licensees
- Independent Power Producers (IPPs) and Renewable Energy Developers
- State GENCOs and system operators
- Standalone energy storage service providers
- Aggregators and third-party investors
Systems can be developed as co-located, standalone, grid-embedded, or behind-the-meter installations, with flexibility in ownership, leasing, or operational models.
Revenue Streams Through Grid Services
A cornerstone of the regulation is the clear articulation of how BESS can participate in grid stabilization and earn revenues. Battery assets will be eligible for compensation when providing:
- Primary, Secondary, and Tertiary frequency regulation
- Spinning and non-spinning reserves
- Voltage control
- Black start capabilities
These provisions open the door to a robust ancillary services market in the state, supported by Andhra Pradesh SLDC acting as the nodal agency.
Empowering Aggregators and Market Participation
In a major innovation, the regulation officially recognizes the role of Aggregators, who will bundle BESS capacity from multiple sites—allowing smaller players to access grid service markets. These aggregators must be registered with SLDC and meet technical eligibility norms to participate.
Market-driven models are encouraged through competitive bidding mechanisms for BESS procurement. Licensee-owned projects will have tariff recovery regulated by APERC, while third-party developers will operate under market-determined pricing.
Strategic Planning and Deployment
Deployment locations will be identified based on grid need, especially in areas experiencing reverse power flow due to high renewable penetration. Key provisions include:
- Minimum project size: 1 MW capacity with at least four hours of energy rating
- Flexibility for DISCOMs to deploy smaller systems at DTR levels
- Mandatory planning integration by DISCOMs and TRANSCOs via investment proposals
Safety, Sustainability, and Compliance
The regulation mandates adherence to national safety and environmental standards, including:
- Technical specifications by MNRE and CEA
- Cybersecurity protocols under MeitY and CEA guidelines
- Environmentally responsible battery disposal as per MoEF&CC and SPCB rules
Consumers and prosumers can also participate by setting up behind-the-meter BESS systems, especially when paired with rooftop solar, without prior DISCOM approval—provided technical standards are followed.
Next Steps and Stakeholder Input
Though not a procurement notice, this regulation establishes the policy groundwork for a vibrant energy storage market in Andhra Pradesh. With the ability to amend, adapt, and scale, APERC has positioned the state to become a national frontrunner in BESS deployment and grid modernization.
The Commission has opened the floor for public consultation and will oversee implementation through investment approvals, eligibility criteria, agreement formats, and performance monitoring.
