Nepra mandates battery storage for renewables auction

First wheeling auction doubled to 400MW; solar and wind projects must install BESS equal to at least 10% of firm capacity, while proposal deadline is fixed at two months The National Electric Power Regulatory Authority (NEPRA) has made battery energy storage systems (BESS) mandatory for solar and wind projects participating in Pakistan's first electricity wheeling auction, while approving an increase in the auction size from 200MW to 400MW, Business Recorder reported. The regulator approved, with modifications, amendments to the auction process proposed by the Independent System and Market Operator of Pakistan (ISMO). Under the revised framework, solar and wind projects will only be eligible to participate if the firm capacity of their co-located BESS is at least 10% of the firm capacity of the associated renewable generation facility. For the 400MW auction, ISMO estimates the requirement would translate into around 40MW of BESS firm capacity and approximately 160MWh of storage capacity, subject to the applicable discharge-duration requirement. Nepra approved the 10% threshold despite broader stakeholder support during consultations for a 20% requirement. The regulator said a higher threshold could raise upfront costs and implementation risks and discourage participation, particularly from smaller players. ISMO simulations showed that the mandatory storage requirement could reduce system-level renewable energy curtailment by around 0.3 percentage points for wind and 1.1 percentage points for solar. Its impact on marginal electricity prices is expected to be negligible. At the project level, however, ISMO's modelling indicated that adding 10% BESS could improve equity internal rates of return for both solar and wind projects supplying B-3 and B-4 consumers by mitigating curtailment risks. Nepra said the 10% requirement would be an initial-phase measure rather than a permanent or automatically escalating threshold. ISMO has been directed to assess participation, competition, storage costs and technical performance before submitting proposals for any future changes. The regulator also directed ISMO to publish its supporting financial model before issuing the first request for proposals (RFP). Separately, Nepra rejected ISMO's proposal to retain discretion to extend the bid submission deadline. It fixed a non-extendable two-month submission period from publication of the RFP for the first auction, while subsequent auctions will have a one-month window. Nepra also approved a three-member Grievance Redressal Committee, to be chaired by the managing director of the Private Power & Infrastructure Board (PPIB) and comprising two independent directors of ISMO's board. Participants will have five business days after publication of the provisional list of eligible bidders to file grievances, while the committee will have four weeks to decide them. Its decisions will be binding for purposes of the auction. Nepra directed ISMO to incorporate the approved changes into the RFP and other auction documents before proceeding with the process.