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Solar Energy Corporation of India begins BESS tenders backed with Viability Gap Funding

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The Solar Energy Corporation of India (SECI) has begun the process of tendering for 4,000MWh of grid-scale battery storage, which will be supported by the government’s Viability Gap Funding (VGF) scheme.

The public sector company, established by the ministry of new and renewable energy (MNRE), has posted a number of notices in the past few days relating to forthcoming battery energy storage system (BESS) tenders.

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They include a notice inviting tender (NIT) for 250MW/500MWh of standalone battery storage, under Tranche 1 of the VGF commitment, which aims to provide support for projects that are not financially viable on their own merits.

India’s finance minister Nirmala Sitharaman announced the government’s commitment to the scheme in her ministry’s Union Budget for 2023-2024, just over a year ago. The cabinet then approved the competitive tender scheme in September.

While India’s major policy commitments toward promoting renewable energy have helped drive interest in battery storage systems paired with solar PV plants – including one of the other tenders announced recently by SECI – the case for large-scale standalone BESS has been slower to develop.

The National Electricity Plan puts the need for energy storage capacity at 74GW/411GWh, from a mix of batteries and pumped hydro energy storage (PHES) by 2030 to integrate a targeted 500GW of non-fossil fuel energy generation by that time.

The VGF scheme will contribute around 40% of the revenue required to make the business case for standalone storage work, while owners or investors will be able to make the rest from merchant opportunities.

The tariff-based competitive bidding opportunity will open soon. The ministry of power is set to issue tender documents shortly, SECI said.

Tender for 1,200MW of PV paired with 600MW/1,200MWh of storage

SECI issued the NIT for the storage project on 16 March. The day before, the corporation issued its NIT for 1,200MW of solar PV systems, to be connected to the Inter State Transmission System (ISTS) and paired with 600MW/1,200MWh of energy storage systems.

Again, to be awarded through a tariff-based competitive bidding process, a timeline for the tender was not provided in the notice, but SECI said that tender documents have been drafted and, like the VGF solicitation, will be “issued shortly”.

It is worth noting that in neither of the above tenders, regions for systems to be deployed have been stipulated besides the requirement in the solar-plus-storage tender to connect to the ISTS.

However, also on that day (15 March), the corporation put out an NIT for solar PV and energy storage for the tropical island territory of Lakshadweep.  

A much smaller undertaking, totalling 1,385kW of solar PV with 1,117kWh of battery storage, the projects would be split across four different islands. The largest will be a 600kW PV plant on Kadmat Island with 200kW/600kWh of BESS; the smallest, on Amini Island, will include 240kW of solar PV with a 24kW/12kWh BESS. Tender documents again will be “issued shortly”, SECI said.   

India’s prime minister Narendra Modi, one of the many world leaders running in a general election in 2024, recently made a dedication to welcome online India’s largest battery storage project, pairing 100MWac of PV with a 40MW/120MWh BESS, in the state of Chhattisgarh.   

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