Eninrac Analytics: Decoding The CERC's Draft On Integrated Energy Storage Systems (IESS)
This draft represents the most significant regulatory evolution since the introduction of renewable purchase obligations. It creates an entirely new asset class within India's electricity market structure one that bridges thermal inertia with renewable intermittency. Our analysis suggests this will fundamentally alter three key market dynamics, namely “peaking capacity” , revenue stack re-engineering and technology adoption trajectory
Executive Summary
India's power sector has long awaited the missing piece in its renewable integration puzzle: a clear, bankable pathway for grid-scale energy storage. With the Central Electricity Regulatory Commission's (CERC) landmark 2025 draft regulations on Integrated Energy Storage Systems (IESS), that wait is over. This isn't merely another policy update rather; it's the creation of an entirely new asset class within India's electricity market. We explore the three-layered revenue stack (capacity payments + energy arbitrage + ancillary services), analyze the risk allocation between developers and beneficiaries, and examine how this framework transforms storage from a "nice-to-have" grid accessory to a "must-have" bankable infrastructure asset. The article also identifies implementation challenges and strategic opportunities for generators, transmission utilities, and financial institutions poised to capitalize on India's emerging ₹50,000-75,000 crore storage economy.
This analytical deep-dive unpacks how CERC's draft:
- Assigns concrete monetary value to storage through supplementary tariffs with fixed capacity charges and variable energy components
- De-risks investments with a guaranteed 14% return on equity and 12-year asset life recognition
- Builds revenue certainty through transparent cost recovery mechanisms and performance-linked incentives
- Enables project financing by providing the regulatory predictability banks and investors demand
- Catalyzes 15-20 GW of storage integration with existing thermal and transmission infrastructure
Regulatory Foundations & Normative Framework
Eninrac analysis distills the CERC notification's core operational and financial parameters into actionable business metrics. By converting regulatory clauses; such as the 12-year asset life, 85% round-trip efficiency, and 14% return on equity into a structured matrix, Eninrac analysis provide stakeholders with a clear reference for project viability, performance benchmarking, and tariff computation, ensuring all financial models are grounded in notified norms.
Key Notified Draft Regulations & Norms for IESS
Paradigm Shift in Market Structure
Eninrac assessment maps the fundamental transformation from a pilot-based, cost-centric storage approach to a formalized asset class. It contrasts the pre-draft environment of regulatory ambiguity with the new framework that introduces bankable revenue streams, standardized asset recognition, and streamlined approvals, thereby de-risking investments and catalyzing large-scale deployment across generation and transmission segments.
Source: eninrac consulting, eninrac analysis
Energy Transition Acceleration Metrics
Eninrac’s projections evaluate the comprehensive influence of large-scale storage deployment on achieving India's national decarbonization targets. By utilizing the regulatory framework's capacity for expansion, it forecasts significant improvements in grid flexibility, reductions in carbon emissions, and strengthened energy security. The analysis offers a broad perspective on how energy storage technologies serve as critical accelerators in India's transition toward a cleaner, more sustainable energy future, highlighting their role in enhancing system resilience and supporting the integration of renewable resources at a national scale
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Source: eninrac consulting, eninrac analysis
Strategic Recommendations - Stakeholder-Specific Actionable Roadmap
Eninrac’s strategic guide translates the regulatory provisions into phased initiatives for each market participant. It aligns the notification's timelines, approval requirements, and commercial mechanisms with actionable steps for OEMs, generators, transmission companies, financiers, and distributors to capture value in a sequenced manner.
