Andhra Pradesh has quietly moved from talking about storage to buying it. The state’s approach sits in three layers: a headline policy that sets the ambition, a set of regulations that spell out the rules, and a live procurement that actually signs contracts. This piece walks through all three in plain terms, and where the numbers are still moving we say so.
The policy layer: Integrated Clean Energy Policy 2024
The foundation is the Andhra Pradesh Integrated Clean Energy (ICE) Policy 2024, notified in October 2024 and running for five years. It is a sweeping document — it targets roughly 78.5 GWp of solar, 35 GW of wind, and around ₹10 lakh crore of investment — but the storage headline is what matters here: a target of 25 GWh of battery storage (BESS) by 2029, alongside a very large pumped-hydro storage ambition reported in the region of 22 GW.
The policy also names the delivery agencies. NREDCAP (the New and Renewable Energy Development Corporation of Andhra Pradesh) is the nodal body for renewable and storage projects, and smaller BESS projects — those with capital expenditure below ₹100 crore — can be cleared directly by NREDCAP. Larger projects and grid-scale procurement move to the transmission utility. If you want the national backdrop that frames all of this, our guide to India”s BESS policy landscape sets the scene.
The regulatory layer: APERC’s BESS Regulations 2025
Policy sets direction; regulations set rules. On 12 September 2025, the Andhra Pradesh Electricity Regulatory Commission (APERC) — the state regulator — released its Battery Energy Storage Systems Regulations, 2025. In plain terms, these do three useful things:
- Define what counts as a BESS project — a minimum size of 1 MW with at least 2 hours of storage, so only meaningful installations qualify.
- Open up who can build and how — standalone grid-connected batteries, batteries co-located with a power plant, or consumer-level storage (down to EV-charging sites). Ownership is open to DISCOMs (distribution companies), transmission operators, generators, renewable developers and independent storage providers.
- List what a battery is allowed to do — frequency regulation, voltage support, black-start services, energy-market participation and ancillary services.
This regulatory clarity is what lets a battery earn money from more than one job at once. We explain that stacking of revenue in our renewable-firming solution page.
The procurement layer: APTRANSCO’s 1 GW / 2 GWh tender
The real action is the actual buying. APTRANSCO (the Transmission Corporation of Andhra Pradesh) was appointed the nodal agency and, in 2025, floated a tender for 1,000 MW / 2,000 MWh of standalone BESS spread across seven substations. This is a build-own-operate (BOO) model: the developer builds and runs the battery, and the DISCOMs pay a monthly capacity charge for keeping it available.
Two things make the economics work. First, central Viability Gap Funding (VGF) capped at about ₹18 lakh per MWh, disbursed in tranches — the same grant that props up standalone tenders nationwide, which we unpack in our VGF scheme explainer. Andhra Pradesh was among the states allocated capacity under the 2025 VGF expansion; reports put its early share at roughly 1,500 MWh, later aligned with the 2,000 MWh actually tendered. Second, cheap land — APTRANSCO offers project sites on a right-of-use basis at a nominal lease of ₹1 per acre per year.
Bidding ran through the Bharat ETS portal followed by an electronic reverse auction, with a bid deadline in late September 2025. The tender also set firm technical guardrails: a minimum 95 percent annual availability, no refurbished battery cells, and an Energy Management System developed indigenously in India.
What the auction actually delivered
In July 2026, APERC approved seven tripartite Battery Energy Storage Purchase Agreements covering the full 1,000 MW / 2,000 MWh, over a 12-year procurement term, under Section 63 of the Electricity Act, 2003. The discovered monthly capacity charges ranged from about ₹1.48 lakh to ₹1.65 lakh per MW across the seven sites — competitive with the low tariffs seen in Gujarat’s GUVNL auctions. Winning developers reportedly included Bondada, Brahmasagar Renewables and POWERGRID Energy Services, among others.
What this means for you
For a developer or EPC, Andhra Pradesh is now a genuine market, not a plan: standalone, co-located and consumer-side storage are all permitted, VGF and near-free land improve returns, and the technical bar (95 percent availability, no refurbished cells, indigenous EMS) rewards quality builds — see how our standalone-BESS solution is specified for exactly these tenders. For a DISCOM or C&I buyer, the ₹1.48–1.65 lakh per MW per month capacity charges are a useful benchmark for what firm, dispatchable evening power should cost.
Policies and tenders change by notification, and several AP figures — the VGF share and final commissioning timelines in particular — are still settling; always verify the current terms before committing. If you are sizing a battery for an AP tender or a captive load, our team can help you spec it: run the numbers on our BESS savings calculator or talk to us directly.
Policy snapshot as of July 2026. Terms change by notification; verify current provisions before financial decisions.