The Andhra Pradesh Electricity Regulatory Commission (APERC) has introduced the Battery Energy Storage Systems (BESS) Regulations, 2025, providing a clear framework for the deployment and integration of energy storage technologies in the state.

This move supports the state’s Integrated Clean Energy Policy, 2024, which has set a target of adding 25 GWh of BESS capacity by 2029.

Scope and Applicability

The regulations apply to distribution and transmission licensees, generating companies, renewable energy developers, independent power producers (IPPs), aggregators, and third-party investors, as well as battery energy storage service providers.

Ownership and Deployment Models

The framework allows BESS to be developed, owned, leased, or operated by a variety of entities, including distribution and transmission licensees, system operators, generating companies (GENCOs), IPPs, renewable developers, independent storage service providers, and aggregators.

Deployment models are flexible and include co-location with renewable or conventional generators, grid-connected standalone systems, embedded storage within transmission or distribution networks, and behind-the-meter consumer-level storage.

The regulations also encourage innovative integrations such as BESS with electric vehicle charging and battery swapping stations, as well as vehicle-to-grid and grid-to-vehicle services, which will play a key role in shaping the future of e-mobility and grid interaction.

Planning and Procurement

Planning guidelines emphasize that the reverse power flow from lower to higher voltage substations will be the primary criterion for finalizing BESS locations. Distribution companies (DISCOMs) and the transmission company are encouraged to install BESS at generation sites, which can provide ancillary services and reduce grid integration costs.

The regulations specify that individual projects must have a minimum size of 1 MW with at least two hours of storage capacity, connected at 11 kV or above. However, smaller installations at the distribution transformer level are permitted without this size restriction, especially to locally store excess rooftop solar power.

For open access and captive users, behind-the-meter BESS can be installed at any capacity, giving consumers flexibility. All capacity procurement by licensees must receive prior approval from APERC.

Utilization for Ancillary Services

BESS will play a crucial role in strengthening grid reliability by providing a range of ancillary services. These include frequency regulation at the primary, secondary, and tertiary levels, spinning and non-spinning reserves, voltage support, black start capability, and demand response services. This ensures that BESS becomes a critical asset for maintaining balance and stability in the state’s power system.

Role of Aggregators

Aggregators must pool together BESS resources from different sites, such as co-located storage, standalone systems, electric vehicles, EV charging stations, battery swapping facilities, and distributed renewable energy systems integrated with BESS. These aggregated resources can then provide services to the Andhra Pradesh State Load Dispatch Centre (APSLDC), Andhra Pradesh Transmission Corporation (APTRANSCO), DISCOMs, or other market participants, making it possible to optimize resources at scale.

Tariff and Market Participation

The regulations emphasize that procurement of BESS capacity and services by licensees must be done through tariff-based competitive bidding. For licensee-owned BESS, cost recovery will be determined by the Commission based on prudent investment norms and regulatory guidelines. Market-linked services will be compensated at market-clearing prices in ancillary service markets, ensuring transparency and efficiency.

Importantly, renewable energy that is stored in BESS will retain its green attributes upon discharge and consumption, enabling consumers and obligated entities to claim compliance under renewable purchase and renewable consumption obligations.

Role of DISCOMs

DISCOMs must publish potential 11 kV sites in 33/11 kV substations for establishing BESS and identify transformers where rooftop solar installations exceed 50% of capacity. They must include BESS in their resource planning and regulatory filings, with all expenditure on BESS to be recoverable through appropriate regulatory mechanisms.

Expenditure for ancillary services will be claimed under power purchase costs, while capital expenditure on licensee-owned BESS will be recovered through depreciation, return on equity, and O&M costs in the annual revenue requirement. All procurement outside this framework must be conducted through competitive bidding, in line with national guidelines.

Additionally, DISCOMs must maintain a database of behind-the-meter BESS installations and publish the list of registered aggregators on their websites.

Role of APTRANSCO

APTRANSCO is responsible for identifying and finalizing the locations for BESS within the transmission network. Its role includes ensuring that BESS integration strengthens transmission-level reliability and reduces grid congestion. APTRANSCO will also be tasked with facilitating the installation of BESS at points where reverse power flow and renewable integration challenges are significant.

Role of APSLDC

APSLDC has been designated as the nodal agency under these regulations. It will oversee the scheduling, despatch, and utilization of BESS for ancillary services. It will be responsible for publishing on its website the eligibility criteria and technical requirements for participating in ancillary service markets, including primary, secondary, and tertiary reserves.

APSLDC will also identify the quantum of reserves required for grid operation and communicate these requirements to market participants.

Additionally, it will supervise the aggregation of distributed BESS resources and ensure that ancillary services are procured transparently and efficiently.

Role of GENCOS, IPPs, CPPs, and BESS Developers

GENCOs, IPPs, captive power producers (CPPs), and BESS developers are encouraged to integrate energy storage into their generation facilities. By doing so, they can improve the reliability of power supply, optimize renewable energy output, and provide valuable ancillary services to the grid. Developers may set up BESS as standalone systems or in co-location with renewable and conventional power plants.

They are also expected to explore opportunities for market participation, either directly or through aggregators, thereby strengthening the overall ecosystem for energy storage in Andhra Pradesh.

Consumers and Prosumers

Consumers and prosumers are empowered under the new regulations. They may install behind-the-meter BESS systems for self-use and also participate in ancillary service markets. These systems must comply with technical standards and be registered with DISCOMs. Consumers who charge BESS with renewable energy will be able to retain its renewable attributes, enhancing their role in supporting the state’s clean energy goals.

Open Access to BESS

Open access to BESS will be governed by the APERC Green Energy Open Access Charges and Banking Regulation, 2024.

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