Chennai: The state will soon get a 1,500 megawatt hour (MWh) battery energy storage system (BESS), as the Tamil Nadu Green Energy Corporation Ltd (TNGECL) is likely to finalise the winning bidder and issue a letter of authorisation (LOA).Finance minister Thanam Thennarasu announced in the recent interim budget that the tender for the BESS project was in the final stages, and TNGECL officials expedited the process for two main reasons – LOA cannot be issued after the model code of conduct (MCC) is announced, and secondly the deadline to avail itself of viability gap funding (VGF) for the BESS projects is close approaching.
The Union govt releases 40% of the project cost as VGF for the BESS projects with a view to encourage more investors to enter the market. In the second phase, the Union power ministry allocated 5,400 crore as viability gap funding to as many as 15 states to install 30 gigawatts of BESS, including 1,500 MWh for Tamil Nadu.In the first phase, TNGECL awarded tenders for the 1,000 MWh BESS project to NLC India Renewables Ltd (NIRL) (500 MWh), Bondada Engineering Ltd (400 MWh), and Oriana Power (100 MWh). The projects are in various stages of development.The BESS project will come up in areas where more renewable power is produced, and the excess green energy, such as solar and wind power, will be stored in the batteries to be used during non-solar hours to keep the grid stress-free and reduce power purchase costs. When all BESS projects become functional, they can store around 2.25 million units of power and release it in the evening hours for up to four hours to meet the peak demand.Once the LOA is issued, both the developer and TNGECL will approach the Tamil Nadu Electricity Regulatory Commission (TNERC) to finalise the storage rates.
