Non-requirement of NOC from FDRE PPA/PSA procurer for ESS charged using power other than RE power – EQ

Summary:

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## Key Business Implications

### 1. No NOC Required for Early ESS-Only Sales
– **Situation:** BESS is commissioned early; solar/wind RE sources are not yet ready.
– **Action:** Developer charges BESS from the **grid** (non-RE power).
– **Rule:** No NOC needed from intermediary/end procurer to sell that power in **merchant or third-party markets**.
– **Result:** Developers can generate **revenue from BESS immediately** without waiting for RE generation or PPA amendments.

### 2. Right of First Refusal (RoFR) Does Not Apply
– The RoFR under **para 14.5 of FDRE SBGs** applies only to **RE power injected from solar/wind components**.
– ESS discharging non-RE power is **not RE power** → RoFR is irrelevant.
– Attempting to get NOC would create a regulatory anomaly (procurer buying non-RE under an RE PPA).

### 3. Clear Regulatory Boundary
| Scenario | NOC Required? | Can sell under PPA? |
|———-|—————|———————-|
| ESS charged from RE (solar/wind) | Yes | Yes (as RE power) |
| ESS charged from grid (non-RE) before RE commissioning | **No** | **No** – only merchant/third-party |
| Mixed charging (RE + grid) | Requires prudence | Partial qualification |

### 4. Applies to Existing & Future Bids/PPAs
– This clarification is **retrospective and prospective** – covers all FDRE projects already awarded or yet to be tendered.
– Provides **legal certainty** to developers and lenders.

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## Strategic Business Opportunities

### For RE Developers
– **Accelerate BESS commissioning** – start earning merchant revenue immediately.
– **Avoid lengthy NOC negotiations** with procurers (often delays of months).
– **Optimize asset utilization** – charge from low-cost grid power (e.g., off-peak) and sell at peak merchant prices.

### For DISCOMs / Procurers (SECI, NTPC, etc.)
– **No obligation to buy non-RE power** – protects their regulatory compliance.
– **No risk of forced off-take** of power that doesn’t meet RPO (Renewable Purchase Obligation).

### For Financiers & Investors
– **Reduces project cash flow risk** – BESS can generate revenue independently.
– **Improves debt servicing ability** during construction/ramp-up phase of RE components.
– **Clarity on merchant sale** – no hidden NOC condition in PPAs.

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## Legal & Contractual Safeguards

– Must **not** represent merchant ESS power as RE power to any stakeholder.
– Must maintain separate **metering and accounting** for RE vs. non-RE charged ESS.
– FDRE PPA clauses on “Early Commencement” (para 14.5) remain valid **only for RE components**.

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