CERC IESS Regulations: What They Mean For Storage Investors In India

CERC’s Integrated Energy Storage Systems regulations bring energy storage into the core of India’s power market by defining how storage co-located with generating stations and transmission systems will be treated, paid, and regulated. For the first time, storage can earn regulated returns like any other grid asset, with clear rules on tariff, efficiency, availability, and revenue sharing.

This guide breaks down what the CERC Integrated Energy Storage Systems regulations and the CERC IESS tariff framework 2025 mean for C&I consumers, IPPs, grid planners, and investors.

What are CERC’s Integrated Energy Storage Systems regulations

CERC’s Integrated Energy Storage Systems regulations are a draft Second Amendment to the Tariff Regulations 2024-29 that formally define how battery energy storage co-located with coal, lignite, gas plants, or inter-state transmission systems (ISTS) will be regulated and remunerated.

The regulations cover definitions, norms of operation, cost recovery, supplementary tariffs, revenue sharing, and a Regulatory Sandbox for innovative storage use cases.

CERC adds a new concept of Integrated Energy Storage System, meaning an energy storage system co-located with a generating station or transmission system and connected to a common bus, used for grid reliability, transmission deferral, or flexible operation.
Battery Energy Storage Systems (BESS) are explicitly recognised with a 12-year useful life in the depreciation schedule, bringing them into the same regulatory universe as other regulated assets.
The regulations apply wherever a coal, lignite, or gas-based station or ISTS installs storage to supply electricity to beneficiaries or Designated ISTS Customers whose tariff is determined by CERC.

How the CERC IESS tariff framework 2025 works in practice

The CERC IESS tariff framework 2025 introduces supplementary capacity and energy charges that sit on top of the existing tariff of a plant or transmission asset, creating a clear revenue path for storage. In practice, storage becomes a regulated component whose fixed and variable costs are recovered through defined formulas and shared with beneficiaries.

Generators and transmission licensees must apply for a supplementary tariff for an integrated energy storage system within 30 days of commercial operation, based on audited capital expenditure.
Supplementary Capacity Charges (SCCess) recover the Annual Fixed Cost of the ESS, linked to the Plant Availability Factor of the integrated energy storage system (PAFess) and a normative availability of 90 percent for generating-station-linked storage.
Supplementary Energy Charges (SECess) cover the cost of energy used to charge the ESS, computed from the source tariff or discovered price, adjusted for round-trip efficiency and auxiliary consumption.
Charging energy can come from surplus generation of the host plant, other generating stations, the open market, or high-frequency drawal from the grid, with specific formulas defined for each case.
An additional incentive of 25 paise per kWh is payable for excess discharge beyond what is implied by normative round-trip efficiency, rewarding better operational performance.

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What the draft IESS norms mean for C&I and open access users

For C&I and open access users, the CERC Integrated Energy Storage Systems regulations mean that storage-linked plants and ISTS assets they depend on now have a predictable way to invest in and recover the cost of storage. This directly supports better reliability and tariff stability. In simple terms, it becomes easier for your generating counterparties or ISTS providers to justify storage investments that strengthen your operations.

Storage can be used to maintain the technical minimum of thermal units and ensure a continuous supply to beneficiaries. This is critical for C&I users that cannot afford frequent ramping, interruptions, or curtailments.
The framework allows charging energy to be sourced from the most economical option when surplus from the host plant is not available, helping keep supplementary energy charges competitive for beneficiaries.
The first right of discharge from integrated storage lies with the beneficiary, except where required for safe and secure grid operation. This gives C&I and open access users greater confidence in how stored energy will be prioritised.
Revenue sharing of gains from storage services in a 50:50 ratio between the generator and beneficiaries allows C&I users to benefit when storage earns revenues from ancillary services or market-based opportunities.
Over time, this structure supports firmer renewable energy products, better time-of-use optimisation, and stronger reliability commitments in open access power supply contracts.

Why IPPs, developers, and grid planners should care about storage as a regulated asset

IPPs, developers, and grid planners should care because the IESS framework converts storage from a pure merchant or scheme-driven asset into a regulated infrastructure component with recognised tariffs and clear cost recovery routes. This shift lowers revenue risk, opens new project configurations, and gives grid planners a formal pathway to deploy storage within transmission systems.

Integrated storage can now be capitalised as additional expenditure on existing generating stations or transmission systems, with in-principle approval available based on cost-benefit analysis and the impact on tariffs.
Transmission licensees are permitted to install storage as a transmission asset for reliability improvement, congestion management, and investment deferral, with costs recovered under CERC’s transmission charge sharing regulations.
Where transmission-side storage also delivers storage services as an “other business”, the associated revenue is governed by separate sharing regulations, supporting a multi-use and multi-revenue operating model.
Grid planners gain a codified tool to manage peak demand, contingency events, ramping requirements, and frequency support by using integrated storage rather than relying only on new lines or additional generation.
For developers, the presence of a clear CERC IESS tariff framework 2025 can simplify lender discussions and unlock more IPP-led storage proposals at existing or new project sites.

Bankability: what 85 percent RTE, 90 percent availability, and 12‑year life mean for investors and lenders

The CERC norms of 85 percent round trip efficiency, 90 percent normative availability, and a 12-year depreciation life set a clear bankability baseline for storage integrated with generation or transmission assets. For investors and lenders, these benchmarks reduce technical and regulatory ambiguity, making underwriting, modelling, and risk assessment more straightforward.

Round Trip Efficiency (RTEess) is defined as the percentage of energy delivered versus energy used for charging. A normative value of 85 percent or actual, whichever is higher, is used for tariff calculations, directly incentivising better-performing systems.
Auxiliary Energy Consumption (AECess) is capped at 5 percent of input energy. Any excess auxiliary usage cannot be implicitly passed on to beneficiaries, enforcing operational efficiency discipline.
A Normative Availability Factor (NAPAFess) of 90 percent for integrated storage at generating stations establishes a high but transparent operational benchmark, directly linked to supplementary capacity charge recovery.
Battery energy storage systems are assigned a 12-year useful life in the depreciation schedule. Any unrecovered depreciation after this period is spread over the remaining life of the generating plant or transmission asset, smoothing revenues beyond the initial depreciation window.
Defined O&M norms at 2 percent of admitted capital cost, with annual escalation, provide a predictable operating cost envelope that can be reliably built into financial models and lender appraisals.

How Infisol Energy can help you design CERC‑ready storage plus solar projects

CERC’s IESS framework opens a new design space where open access, solar, and storage can be combined to deliver more reliable and bankable power solutions. Navigating this complexity requires a specialised EPC partner that understands both regulation and execution.

Infisol Energy, as a leading solar EPC company operating in India’s C&I and open access space, is well positioned to help translate these regulatory norms into practical, on-ground project configurations.

For C&I users, Infisol can evaluate whether your reliability and peak management needs are best served through pure solar, solar plus BESS behind the meter, or participation in projects that use integrated storage at the generation or ISTS level.
For IPPs and developers, Infisol supports the technical design of integrated solar plus storage blocks aligned with the CERC Integrated Energy Storage Systems regulations, including assumptions for round trip efficiency, availability norms, auxiliary consumption, and O&M cost footprints.
For investors and lenders, Infisol can work alongside your financial advisors to translate the CERC IESS tariff framework 2025 into bankable revenue models, downside scenarios, and sensitivity analyses.
For multi-site or multi-state portfolios, Infisol helps assess how storage deployed at the ISTS or substation level interacts with open access strategies, grid codes, and state-level regulatory requirements.

If your team is evaluating storage as part of a solar, open access, or hybrid power strategy, Infisol can help you interpret the CERC IESS norms in the context of your specific load profile, power contracts, and risk appetite, and outline technically and commercially feasible options you can confidently present to your board or lenders.

FAQs on CERC IESS regulations and the tariff framework

What are the CERC Integrated Energy Storage Systems regulations?

The CERC Integrated Energy Storage Systems regulations are a draft Second Amendment to the 2024 Tariff Regulations that define how storage co-located with coal, lignite, gas plants, or inter-state transmission systems will be treated for tariff and regulation. They introduce new definitions, norms of operation, cost recovery mechanisms, and revenue-sharing rules for integrated energy storage systems.

How does the CERC IESS tariff framework 2025 affect storage projects?

The CERC IESS tariff framework 2025 creates supplementary capacity and energy charges on top of existing plant or transmission tariffs, giving storage a regulated revenue path. Projects can now recover capital and operating costs of integrated storage under standard formulas, improving bankability and lender confidence.

What do 85 percent RTE and 90 percent availability mean for battery storage in India?

An 85 percent round trip efficiency means tariff calculations assume that at least 85 percent of the energy used to charge the storage is returned as usable energy, with better performance rewarded in some cases. A 90 percent normative availability means integrated storage must be available for discharge at least 90 percent of the time during peak hours to fully recover fixed capacity charges, aligning performance and revenue.

How do the CERC IESS regulations impact C&I and open access users?

C&I and open access users gain access to more reliable and potentially more flexible power products as generators and ISTS operators can now justify investment in storage with clear tariff recovery. Beneficiaries also have first right of discharge from integrated storage, except when required for safe grid operation, and share in gains from storage services under a 50:50 mechanism.

Can storage now be treated as a regulated transmission asset in India?

Yes, storage integrated with existing transmission systems can be treated as a regulated transmission asset when used to improve grid reliability or defer transmission investments, with costs recovered through transmission charge sharing regulations. The regulations also allow part-use of such storage for other purposes, subject to CERC approval and applicable revenue sharing rules.

How do these norms improve bankability for investors and lenders?

Bankability improves because integrated storage now has explicit norms on efficiency, availability, O&M, depreciation, and tariff recovery, reducing uncertainty. Investors can model SCCess, SECess, incentives, and revenue sharing under clear regulatory assumptions instead of relying only on merchant or tender-based structures.

How should a C&I user or developer act on these regulations today?

C&I users should discuss with their generators, open access providers, or EPC partners whether integrated storage could reduce curtailment risk, manage peaks, or support future time-of-day tariffs under the new framework. Developers and IPPs should revisit brownfield and hybrid projects to see where storage integration under CERC Integrated Energy Storage Systems regulations can unlock additional value for beneficiaries and themselves.

Do these regulations cover only battery energy storage systems (BESS)?

The regulations explicitly define battery cells and battery energy storage systems and assign them a 12‑year life, but the broader “energy storage system” definition is tied to the Grid Code, which may cover other technologies. Practically, BESS is the first technology class to benefit, but other forms of storage that satisfy Grid Code definitions could also fall within the IESS framework, subject to interpretation.

How is charging energy priced under the IESS framework?

Charging energy for integrated storage is priced based on the tariff of the associated plant, tariff of another plant serving the same beneficiaries, discovered market prices, or DSM/high-frequency rates, depending on the source. The supplementary energy charge rate is calculated by dividing the relevant energy cost by the higher of normative or actual round trip efficiency, further adjusted for auxiliary consumption.

What is the Regulatory Sandbox mentioned in the draft?

The Regulatory Sandbox provision allows generating companies, transmission licensees, or other entities whose tariffs are determined under these regulations to run innovation and research projects in the power sector, including storage-related pilots, with limited cost recovery. The additional cost allowed is capped at 0.5 percent of annual fixed cost or ₹100 crore, whichever is less, helping de-risk early-stage innovations.

How Infisol can support your next step

CERC’s IESS framework marks a turning point where storage is no longer a sidecar to renewable tenders but a core grid asset with defined tariffs, performance norms, and revenue sharing. C&I users, IPPs, grid planners, and investors that move early will have an advantage in designing storage-integrated projects that balance reliability, cost, and regulatory compliance.

If your organisation is planning or considering solar, hybrid, or open access projects in India and wants to understand how to integrate storage under the CERC IESS tariff framework 2025, Infisol Energy can support you with feasibility assessments, project design, and practical implementation strategies tailored to your load and risk profile.

If you’d like to talk through options for your own project, you can call Infisol Energy on +91 80808 75082, or, if you prefer, leave your details on the contact page at and the team will get back to you.