The Ministry of Power (MoP) has proposed an amendment to the Electricity Rules 2025 to permit the sale, lease, and renting of energy storage systems (ESS).

The Ministry invited comments on the draft amendment from stakeholders to be sent by July 10, 2025.

The amendment provides a wider regulatory framework for ESS in India to introduce it as an independent energy infrastructure. ESS can be utilized either as an independent project or as part of a generation, transmission, or distribution system.

It can also be developed, owned, leased, or operated by a generating company or a transmission, or a distribution licensee.

The amendment allows for ESS to be developed, owned, leased, or operated by consumers, system operators, or independent energy storage service providers.

The ESS will have the same legal status as its owner.  If the ESS is not co-located but owned and operated either by the generating station, distribution licensee, or the consumer, it will carry the same legal status.

However, it will not acquire the ESS owner’s status and retain its independent status for scheduling and dispatching.

ESS developers will be able to sell, lease, or rent out the systems in whole or in part to any consumer or utility engaged in generation, transmission, or distribution. They can also sell the energy to load dispatch centers.

Large-scale ESS adoption can help address the intermittency of renewables.

In an interview to Mercom, Ayush Misra, CEO of AmpereHour Energy, highlighted that ESS helps systems smooth out fluctuations, ensure grid stability, and maximize the utilization of renewable energy assets.

In February this year, the Ministry of Power mandated that all Renewable Energy Implementing Agencies and state utilities incorporate a minimum two-hour co-located ESS equivalent to 10% of the installed solar capacity in all solar tenders.