Nepra allows govt to mandate Battery Energy Storage Systems for wind, solar IPPs in upcoming power auction

Nepra allows govt to mandate Battery Energy Storage Systems for wind, solar IPPs in upcoming power auction.

Key points

• Khaleeq Kiani Published September 4, 2026 Updated September 4, 2026 09: 40pm.
• Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and throughout the world.
• Khaleeq Kiani is an Islamabad-based reporter for Dawn, specializing in political economy, governance, business, finance, macroeconomics and energy.
• Based on feedback from participants, a minimum BESS capacity of 10pc has been finalised as a mandatory requirement.
• Facing serious duck curve challenges, the administration had decided in July to produce BESS mandatory for bidders as part of the upcoming auction.

Khaleeq Kiani Published September 4, 2026 Updated September 4, 2026 09: 40pm. Join our Whatsapp Channel. Add Dawn as a trusted source.

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Friday allowed the administration to require mandatory Battery Energy Storage Systems (BESS) as part of an upcoming auction for 800 megawatts of renewable power capacity from wind and solar projects, aimed at helping stabilise an electricity supply facing serious duck curve challenges.

After a delay of more than 30 years, the administration has confirmed the auction process for a notional 800MW of capacity as part of its efforts to gradually move towards a competitive energy market. It is at present engaging with the private sector to finalise the bidding schedule.

For context, the regulator approved the move through amendments to the "wheeling auction process", allowing the Independent System Operator (Ismo) – a subsidiary of the power division – to formally matter a request for proposals for the first block of the 400MW auction within the current month.

Under the first of three key amendments to the previous wheeling auction process, prospective bidders would be required to commit to having BESS comprise at least 10 per cent of their proposed wind or solar capacity, the regulator stated.

"An auction participant that intends to participate in the auction by utilising solar and/or wind generation technologies shall only be eligible to participate in the auction if the firm capacity of its BESS located at the site of the generation facility is equivalent to at least 10pc of the firm capacity of its solar and/or wind generation facility, " it remarked.

For the first auction conducted by Ismo, participants are to submit their proposals within two months of the publication of the request for proposal (RFP).

"This period shall be fixed and non-extendable. For all subsequent auctions, auction participants shall submit their proposals within one month of the publication of the RFP, " Nepra remarked.

As a significant number of prospective participants may seek an extension of the submission deadline, the rationale for this provision, apart from it being a standard feature of plenty of procurement and auction frameworks, is to provide Ismo flexibility during the implementation of the first auction.

In practice, the amendments additionally provide for the constitution of a three-member grievance redressal committee, headed by the managing director of the Private Power and Infrastructure Board (PPIB) and comprising two independent directors of the Ismo board, to address complaints or grievances regarding the auction process.

Ismo's extensive modelling of BESS and its financial implications additionally indicated that returns from installing BESS climbed up to a certain capacity.

Based on feedback from participants, a minimum BESS capacity of 10pc has been finalised as a mandatory requirement. As the financial model demonstrated higher returns with greater BESS capacity, nevertheless, auction participants may install more than the minimum to further improve their financial viability.

According to Ismo, international markets had adopted two approaches to integrating BESS into the grid. While developing countries adopted mandatory requirements for BESS integration, countries with mature markets generally published all relevant information and allowed market players to create appropriate decisions. Developing markets such as India, the Philippines, China and the Dominican Republic have additionally implemented mandatory BESS requirements, it stated.

Most prospective auction participants and other stakeholders, according to Ismo, acknowledged the importance of BESS in addressing grid flexibility and mitigating the challenge of the duck curve caused by renewable energy – for example, sizeable numbers of solar consumers exiting the grid during the day and suddenly returning in the evening, creating a surge in demand.

Under the current mechanism, the auction committee is responsible for evaluating eligibility as well as addressing grievances over these evaluations. The private sector, nevertheless, called on an independent forum, separate from the auction committee, to address grievances relating to auctions, so as to eliminate an apparent conflict of interest and enhance the credibility and transparency of the process.

Khaleeq Kiani is an Islamabad-based reporter for Dawn, specializing in political economy, governance, business, finance, macroeconomics and energy. He can be discovered on X at @khaleeqkiani.

For now, nepra allows govt to mandate Battery Energy Storage Systems for wind, solar remains the part of the story worth watching, and further updates are likely as more details are confirmed.