The Ministry of New and Renewable Energy has issued a key clarification to resolve operational challenges faced by developers of Firm and Dispatchable Renewable Energy (FDRE) projects, particularly regarding the requirement of a No-Objection Certificate (NOC) for selling power from energy storage systems (ESS) before commissioning of renewable generation assets.
The ministry reiterated that electricity discharged from an energy storage system charged using non-renewable sources cannot be classified as renewable energy under existing FDRE guidelines. Renewable power is defined strictly as electricity generated from sources such as solar, wind, or other renewable technologies, including when paired with storage.
The clarification addresses project execution challenges where developers often commission Battery Energy Storage Systems (BESS) ahead of associated solar or wind assets. In such cases, storage systems may be charged from the grid in the interim, making the discharged power non-renewable in nature and therefore ineligible under renewable Power Purchase Agreements (PPAs).
Previously, ambiguity around regulatory interpretation had led some agencies to require developers to obtain NOCs from procurers before selling such electricity in the open market, citing the “Right of First Refusal” clause under FDRE bidding guidelines.
However, the ministry has now clarified that this clause applies only to renewable energy generated from commissioned renewable assets, and not to electricity discharged from storage systems charged via non-renewable sources prior to project commissioning.
As a result, developers are not required to obtain an NOC for selling such power, provided the corresponding renewable project has not yet been commissioned. The decision has been approved at the highest level of the ministry and communicated to key implementing agencies, including Solar Energy Corporation of India and NTPC Limited.
The clarification is expected to ease procedural bottlenecks, improve project cash flows during early development stages, and enhance flexibility for developers managing phased commissioning of renewable and storage assets. It also aligns regulatory interpretation with on-ground project realities, supporting smoother execution of complex renewable energy projects across India.
