Uttarakhand Opens Door to Grid Storage with New Renewable Tariff Amendment

RE Society of India RESI
2 days ago
2 min read

Uttarakhand’s amendment formally brings Battery Energy Storage Systems (BESS) into renewable tariff rules, setting useful life at 12 years, a net BESS tariff of ₹5.78/kWh, and new commissioning, depreciation, and metering norms—effective from 27 November 2025.

The Uttarakhand Electricity Regulatory Commission (UERC) issued the second amendment to its renewable tariff regulations to explicitly include BESS alongside solar and small hydro, renaming the principal regulation and extending its scope to storage projects commissioned after the effective date. The change aligns state-level rules with the growing role of storage in grid integration and renewable firming.

Key regulatory changes

Definitions and technical parameters: The amendment adds formal definitions for BESS, charge/discharge ramp rates, and round-trip efficiency, and clarifies commercial operation date (COD) conditions for both solar and BESS, including mandatory metering and electrical-inspector clearance within seven days of application receipt.
Economic parameters: The useful life for BESS is set at 12 years with an optional five-year extension at 50% tariff, and depreciation is 4.67% p.a. for the first 15 years, with residual value assumptions applied thereafter.
Tariff benchmarks: The Commission sets levelized net tariffs at ₹4.31/kWh (canal bank solar), ₹4.48/kWh (canal top solar), and ₹5.78/kWh (BESS), and clarifies that generic tariffs are the ceiling for project-specific bids.

All of the above are codified to apply to distribution licensees and local rural grids within Uttarakhand.

Technical and financial implications

By prescribing COD testing standards tied to CEA, IEEE/IEC, or utility protocols and mandating performance demonstrations, the regulation reduces commissioning ambiguity and protects offtakers from underperforming assets. The 12‑year useful life and 50% tariff in extended years create predictable cash‑flow assumptions for financiers but may understate rapid technology improvements and second‑life value for batteries.

Recommendations to strengthen the regulation

Adopt performance‑based tariff components that reward availability, cycle throughput, and response time to align payments with grid value.
Introduce lifecycle cost methodology for tariff setting that accounts for degradation, replacement of inverter/BMS components, and recycling/repurposing revenues.
Shorten and enforce metering and clearance timelines with penalties for delays to avoid COD bottlenecks.
Create a technology‑neutral procurement framework with minimum round‑trip efficiency and safety standards while allowing innovation in chemistries.
Incentivize local manufacturing and recycling through preferential tariff adders or capital subsidies to reduce end‑of‑life risks and supply chain exposure.
Mandate data reporting and independent performance audits to build a transparent database for future tariff reviews.

Implementation roadmap

Immediate (0–6 months): Publish detailed technical annexures (testing protocols, metering specs) and launch pilot performance‑based tenders.
Medium term (6–24 months): Collect operational data, run tariff true‑ups, and revise useful‑life assumptions based on empirical degradation curves.
Long term (24+ months): Integrate recycling mandates, local content incentives, and dynamic tariffs that reflect market services such as frequency response.

Conclusion

Uttarakhand’s amendment is a decisive step to mainstream BESS into state tariff policy, providing clear COD, life, depreciation, and tariff signals for investors and utilities. Implementing the recommendations above will convert a solid regulatory foundation into a resilient, cost‑effective storage market that accelerates renewable integration and grid stability.

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