Govt Makes Battery Storage Mandatory for New Solar and Wind Projects

The federal government has decided to make Battery Energy Storage Systems (BESS) mandatory for all participants in its upcoming 800 MW renewable energy auction as it seeks to address growing grid stability challenges caused by the rapid expansion of solar and wind power.

The requirement will apply to projects participating in Pakistan’s first wheeling auction, under which surplus electricity generation capacity will be offered through a competitive bidding process. Developers will now be required to install battery storage equivalent to at least 10 percent of their project’s firm generation capacity alongside solar or wind facilities.

According to the Independent System and Market Operator (ISMO), the move is aimed at reducing grid congestion, minimizing renewable energy curtailment, and addressing the country’s growing duck curve challenge, where electricity demand from the national grid falls sharply during the day as solar generation increases before surging again after sunset.

ISMO said its financial modeling indicates that battery storage not only improves grid flexibility but can also enhance project returns. While 10 percent battery capacity has been proposed as the minimum requirement, developers will be free to install larger storage systems if they believe it will improve project economics.

The proposal follows consultations with prospective bidders and other stakeholders, most of whom supported introducing a mandatory battery storage requirement during the initial phase of Pakistan’s competitive electricity market. ISMO noted that several developing countries, including India, China, the Philippines, and the Dominican Republic, have adopted similar mandatory battery storage requirements for renewable energy projects.

In addition to the battery storage requirement, ISMO has proposed allowing the auction submission deadline to be extended when necessary.

Under the current framework, bidders have only one month to submit proposals, with no provision for extensions. The operator argued that additional flexibility may be needed during the country’s first auction if multiple participants request more time.

ISMO has also proposed establishing a Grievance Redressal Committee comprising two independent members of its board along with the organization’s chief executive to handle complaints from bidders. At present, the auction committee is responsible for both evaluating bids and deciding complaints related to those evaluations.

The proposed changes have been submitted to the National Electric Power Regulatory Authority (NEPRA) for approval, with the regulator inviting stakeholder feedback within seven days.