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MNRE Relaxes NOC Norms for ESS Power Sales Using Non-Renewable Charging

The Ministry of New and Renewable Energy has clarified that developers can sell electricity from energy storage systems (ESS) in the open market without obtaining a No-Objection Certificate (NOC), provided the systems are charged using non-renewable sources and the linked renewable project has not yet been commissioned. The move is expected to ease regulatory hurdles in firm and dispatchable renewable energy (FDRE) projects.

This clarification comes in response to industry concerns seeking greater regulatory clarity around ESS operations in hybrid and FDRE setups. After reviewing the provisions under existing standard bidding guidelines, the ministry reiterated that electricity stored using non-renewable sources cannot be classified as renewable energy.

The ministry further highlighted that ESS should be treated as a storage component rather than a generation source. Consequently, any electricity discharged from such systems—when charged using conventional grid power—does not qualify as renewable and cannot be supplied under renewable-linked power purchase agreements.

Additionally, the ministry addressed the applicability of the ‘Right of First Refusal’ clause in FDRE contracts. It stated that this clause becomes relevant only after at least one renewable energy component, such as solar or wind, is operational. It does not apply to electricity discharged from storage systems charged using non-renewable power before the commissioning of renewable assets.

This issue is particularly significant in hybrid projects where battery energy storage systems are often installed before renewable generation units. In such cases, developers may temporarily depend on grid electricity to charge storage systems. Requiring NOCs for selling such power could create compliance issues, as the electricity would not meet renewable energy criteria under existing agreements.

By removing the NOC requirement in these scenarios, the ministry has provided greater operational flexibility to developers, enabling them to utilize and monetize storage assets during the interim phase before renewable energy generation begins.