On April 30, 2026, the Central Electricity Regulatory Commission (CERC) released the draft “Power Market (Second Amendment) Regulations, 2026.” The framework formalizes Integrated Energy Storage Systems (IESS) within the National Indian Grid and establishes a centralized price discovery mechanism through market coupling. Operating under CERC’s jurisdiction over inter-state transmission systems, the regulations define the technical and commercial requirements for storage assets to function as grid reliability tools. Stakeholders are required to submit formal comments by May 31, 2026.
Formalization of IESS in Grid Operations
The regulations categorize Integrated Energy Storage Systems as an Ancillary Service Provider (ASP) within the synchronous power system. The framework integrates these assets into three primary functional areas:
- Primary Reserve: Providing immediate frequency response to maintain the balance between generation and consumption.
- Frequency Regulation: Maintaining grid frequency within nominal values and specific operational ranges to ensure power quality.
- Voltage Support: Utilizing reactive power and voltage control to compensate for voltage drops and maintain transmission system integrity.
Technical Specifications for IESS Participation
The regulatory framework establishes normative operational benchmarks and technical requirements for storage assets participating in the ancillary market:
- Round-trip Efficiency: A minimum threshold of 85%.
- Availability: A minimum operational requirement of 90%.
- Depreciation Schedule: A 12-year period for battery-based assets.
- Response Time: Ability to respond within tens of milliseconds; categorized as faster than traditional spinning reserve.
- Charging Flexibility: Capability to draw energy from host plants, specific grid frequency periods, or the open market.
Market Mechanism and Price Discovery
The Grid Controller of India Limited (Grid India) is the designated Market Coupling Operator (MCO) and is required to establish a dedicated internal unit to manage coupling operations. The centralized price discovery process is structured as follows:
- Bid Collection: Power exchanges collect buy and sell bids from market participants using a uniform bidding format.
- Data Transmission: Validated and anonymized bids are transmitted to the MCO.
- Clearing: The MCO aggregates bids to identify a single market-clearing price designed to maximize economic surplus.
The mechanism will initially target the Day-Ahead Market (DAM) and the Real-Time Market (RTM).
Revenue and Commercial Framework
The regulations outline compensation structures and innovation incentives for integrated storage assets:
- Tariff Mechanisms: Recovery through fixed storage charges and energy charges; tariff filings must be submitted within 30 days of commercial operation.
- Revenue Sharing: Gains exceeding fixed and variable costs derived from ancillary services, peak support, and congestion relief are split 50:50 between the generator and the beneficiaries.
- Transmission Assets: Transmission licensees may employ grid-side storage for reliability; revenues generated from these services are used to reduce annual transmission charges for consumers.
- Regulatory Sandbox: The framework allocates capital for licensees to test innovative storage technologies and business models.
- MPPT Signal Requirement: A technical recommendation for an aggregated Maximum Power Point Tracking (MPPT) signal at the plant controller level for future solar-paired Automatic Generation Control (AGC).
Stakeholder Submission Process
The formal deadline for stakeholder comments and feedback on the draft regulations is May 31, 2026. Submissions must follow the prescribed method defined by the CERC notification. Following the finalization of the rules, Grid India is required to submit a detailed Power Market Coupling Procedure (PMCP) for commission approval within six months. This procedure will define the operational framework, including algorithm design and congestion management protocols.
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