Bid for 1,500 MWh battery energy storage project approved
The project, to be executed under a Build-Own-Operate (BOO) model, is part of the Union Ministry of Power’s Viability Gap Funding (VGF) scheme supported by the Power System Development Fund (PSDF).
TNERC
CHENNAI: The Tamil Nadu Electricity Regulatory Commission (TNERC) has approved the proposal of the Tamil Nadu Green Energy Corporation Limited (TNGECL) to float a tariff-based competitive bidding tender for developing a 1500 MWh Battery Energy Storage System (BESS) across seven substations in the State.
The project, to be executed under a Build-Own-Operate (BOO) model, is part of the Union Ministry of Power’s Viability Gap Funding (VGF) scheme supported by the Power System Development Fund (PSDF).
The Rs 18-lakh-per-MWh VGF-backed scheme will enable TNGECL to select developers through an e-reverse auction process for the installation of 375 MW (4-hour cycle) standalone BESS facilities. These systems will come up at substations in Palladam, Pudukkottai, Thatchankurichi, Tiruvarur, Karamadai, Thappagundu and Anaikadavu.
The 15-year Battery Energy Storage Purchase Agreement (BESPA) will be executed between Tamil Nadu Power Distribution Corporation Ltd. (TNPDCL) and successful bidders.
The BESS units are required to provide 1.5 full charge-discharge cycles per day, ensuring 95 per cent availability, with capacity charges paid on a 'per MW per month' basis. Developers must commission projects within 18 months of signing the BESPA.
The TNERC further instructed TNGECL to incorporate provisions for metering, separate service connections for non-storage power needs, and real-time communication with grid control centres for operational transparency.
The latest approval follows Tamil Nadu's first large-scale storage initiative earlier this year, which marked a significant step in the state’s renewable energy journey.
In June 2025, three companies, NLC India Renewables Limited (NIRL), Bondada Engineering Limited (BEL), and Oriana Power, won the TNGECL tender to develop a combined 1,000 MWh of battery energy storage systems. The NIRL, a subsidiary of NLCIL, was awarded a 500 MWh project, while BEL and Oriana secured 400 MWh and 100 MWh projects, respectively.
It aims to improve renewable energy integration, grid stability and peak demand management, especially during evening and morning load hours.