The Tamil Nadu Electricity Regulatory Commission (TNERC) has issued draft regulations to create a comprehensive framework for battery energy storage systems in the state.

The draft Tamil Nadu Electricity Regulatory Commission (Battery Energy Storage Systems) Regulations, 2026, aim to promote the deployment of battery energy storage systems (BESS) to support grid stability, peak load management, congestion management, frequency management, voltage control, reactive power services, and the integration of renewable energy.

The framework covers standalone BESS, co-located BESS with renewable or conventional generation, embedded BESS, behind-the-meter systems, hybrid RE-BESS, and multi-location BESS.

These regulations apply to all entities engaged in planning, installation, operation, or utilization of BESS connected to the intrastate transmission and distribution systems in Tamil Nadu.

The Commission has proposed a post-2030 review mechanism. It will review the framework on or before November 30, 2029, and notify whether it should be extended, modified, or discontinued at least 90 days before January 1, 2031.

Grid‑connected Standalone BESS

A grid‑connected standalone BESS should operate independently as a merchant energy storage facility and should be physically separate from generation installations. Such BESS should ordinarily be connected at transmission-voltage levels, preferably at 66 kV or above.

Co‑located BESS

Co-located BESS should be operated as an integrated unit with the associated generating station under single operational control and may be used for round-the-clock (RTC) power supply, meeting peak-hour supply obligations, enhancing grid stability during periods of high renewable energy penetration, and providing ancillary and other grid support services.

Embedded BESS

Embedded BESS may be owned by a licensee or a third-party developer and should be integrated into transmission and distribution planning frameworks to support the grid, in accordance with procedures issued by the State Transmission Utility (STU) and distribution companies and approved by the Commission.

Behind‑the‑Meter BESS

The installation of behind-the-meter BESS will require prior approval or intimation to the distribution licensee and should comply with all applicable safety, metering, protection, and technical connectivity standards specified by the Commission, the distribution licensee, STU, and the Central Electricity Authority (CEA).

Hybrid Renewable Energy‑BESS

A hybrid renewable energy‑BESS may be configured to supply power in a firm, dispatchable manner, optimize the utilization of transmission and distribution infrastructure, reduce the variability and intermittency of renewable energy output, and enhance grid reliability and system flexibility.

To ensure adequate storage capacity for a reliable power supply, new renewable energy projects with an installed capacity of 5 MW or more must include an energy storage system with a minimum storage capacity equal to 25% of the renewable capacity to manage variability and peak demand.

Multi‑location BESS

Multi-location BESS configurations may be used, particularly for portfolios of renewable energy generators or distribution network assets, and will be subject to aggregated forecasting, scheduling, and dispatch by the system operator.

Minimum Project Size

Grid-connected BESS projects should have a minimum rated power capacity of 1 MW, while sub-MW projects between 125 kW and 1 MW may be allowed for distribution-level applications, community or campus-level projects, and pilots with the Commission’s approval.

Specialized and program-based applications such as feeder-level solarisation, agricultural demand management, distributed generation with BESS, and PM KUSUM-related projects may be implemented at 125 kW and above.

Behind-the-meter BESS systems are kept outside the minimum project-size requirement but are subject to approval or notification requirements, safety standards, metering obligations, protection systems, and operational restrictions.

The draft states that these systems will primarily be used for self-consumption and cannot be used for energy arbitrage unless expressly permitted by applicable regulations and approvals.

Grid Forming Power Conversion System

For BESS projects with a capacity of 5 MW or more but less than 25 MW, developers must provide either a grid-forming or a grid-following power conversion system (PCS). If a grid-following PCS is used, the developer must provide an undertaking that the system can be upgraded to grid-forming capability later, if required by the distribution licensee or the system operator. This upgrade must be possible through software modification alone, without replacing any hardware components.

Procurement Framework

The Commission’s proposed framework favors transparent tariff-based competitive bidding for procurement of BESS projects and BESS-based services by transmission licensees, distribution licensees, and other procuring entities.

The Commission may adopt discovered tariffs if the bidding process is transparent, follows applicable guidelines, and results in a reasonable tariff and in the interest of consumers.

At the same time, the Commission retains the option to determine tariffs in specified circumstances, including cases where BESS is integrated with existing regulated infrastructure or where other circumstances justify such approval.

For such cases, the draft provides tariff components such as storage capacity charge and storage energy charge rate, along with normative parameters including a useful life of 15 years, 85% round-trip efficiency, 95% normative annual plant availability factor, 2% annual degradation, and a 5% auxiliary energy consumption limit on a rolling monthly average basis.

For renewable energy projects, the draft mandates that new renewable projects of 5 MW and above install storage capacity equal to at least 25% of the renewable energy capacity to manage variability and peak demand.

Existing renewable energy projects may add BESS with separate tariffs for renewable generation and energy discharged from storage, while new co-located RE-BESS projects may adopt either separate tariffs or a composite tariff.

Operational Requirements

The Commission also proposes operational requirements for BESS, including forecasting, scheduling, dispatch, deviation settlement, and participation in ancillary services. Grid-connected BESS systems may provide primary, secondary, and tertiary reserve ancillary services, subject to qualification and registration with the State Load Desptach Center or the relevant market platform.

The draft requires BESS installations to comply with CEA Grid Code and TNERC standards.

Systems must meet requirements for round-trip efficiency, availability, response characteristics, C-rate, cycle life, auxiliary energy consumption, harmonic control, reactive power support, voltage and frequency compliance, cybersecurity, and environmental obligations, including battery recycling and disposal.

Cycle Life

The battery system should be capable of achieving at least 5,000 complete charge-discharge cycles at an 80% depth of discharge, while maintaining at least 80% of the rated capacity at the end of the cycle life period.

In addition, the BESS should, at a minimum, retain 90% of its rated output at the end of five years and 80% at the end of 10 years of commercial operation.

Scheduling and Dispatch Procedures

Every grid-connected BESS installation, including BESS associated with renewable energy projects and standalone BESS participating in scheduling and dispatch, should submit a day-ahead forecast of available capacity in MW and projected state-of-charge in percentage terms to the system operator by 06:00 hours on the day preceding the delivery day (D-1).

The forecast should cover the entire 24-hour period of the delivery day and should consider maintenance schedules, anticipated system conditions, and any constraints declared by the BESS operator, the concerned licensee, or the system operator.

The SLDC should issue day‑ahead charging and discharging schedules to BESS operators by 18:00 hours on (D‑1) for the delivery day. The schedule should specify the designated time blocks for charging and discharging, the target power in MW, and the ramp rate requirements, consistent with the Grid Code.

Open Access Framework

The BESS connected at transmission or distribution voltage levels should be eligible to avail open access in accordance with the provisions of the Green Energy Open Access) Regulations, 2025, and the Grid Connectivity and Intra‑State Open Access Regulations, 2014.

Metering

For high-tension prosumers, generators, and BESS developers connected at 11 kV and above, a bidirectional interface meter should be installed on the high-tension side of the transformer to measure both power injection into and withdrawal from the grid, thereby enabling accurate energy accounting.

The proposed enforcement framework allows the Commission, system operator, and licensees to act against non-compliance through warnings, cure periods, penalties, suspension of services, market restrictions, or disconnection.

Unauthorized behind-the-meter operation, safety violations, data-reporting failures, power-quality breaches, and failure to comply with dispatch instructions may attract penalties.

Recently, TNERC released draft regulations to determine tariffs for renewable energy and non-conventional energy projects during the control period from the financial year (FY) 2027-28 to FY 2031-32.

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