Ministry Of Power Updates Electricity Rules To Boost Energy Storage Ownership And Use
Source：solarquarter
The Ministry of Power has announced amendments to the Electricity Rules, 2005, which will take effect from September 19, 2025. The new rules focus on the use and ownership of energy storage systems and mark an important step in strengthening the role of storage in India’s power sector. According to the official notification, energy storage systems can now be used independently or integrated with generation, transmission, or distribution infrastructure. This gives flexibility in how storage systems can be applied and makes it easier to bring them into the country’s power grid.
The notification also makes clear who is allowed to own and operate these systems. A wide list of entities, including generating companies, transmission and distribution licensees, consumers, system operators, and independent energy storage service providers, can now develop, own, lease, or operate energy storage systems. This expansion of eligible participants is seen as an effort to increase opportunities in the energy storage sector and create a wider market base.
The amendments also bring clarity on the legal status of energy storage systems. If a storage system is co-located with a generating station or a consumer facility, it will carry the same legal status as the owner of that facility. However, if the system is owned but not physically located with the primary facility of the owner, it will be treated as a separate storage element for purposes such as scheduling and dispatch. This distinction ensures proper classification and smooth integration into the power system.
Another important feature of the new rules is the provision that allows developers or owners of energy storage systems to sell, lease, or rent out their storage capacity. They can do this either fully or partially and make the capacity available to consumers, utilities, load dispatch centers, or other parties. This creates a framework for a market in energy storage services, opening up opportunities for business models around the use of storage. By enabling trading of storage capacity, the government expects greater investment and faster development in this field.
The Ministry of Power has introduced these changes to modernize the regulatory structure and prepare the grid for the increasing role of storage. Energy storage is seen as a key part of the transition to cleaner and more flexible electricity systems. The new rules recognize its importance and provide the legal and operational space needed for storage to become a mainstream part of India’s power sector. The amendments are expected to boost participation, innovation, and growth in energy storage solutions across the country.