The Tamil Nadu Green Energy Corporation Limited (TNGECL) will soon float a tender for Battery Energy Storage System (BESS) for solar energy.
Energy Storage Systems (ESS) can be used for storing available energy from renewable energy and further can be used during peak hours of the day. BESS is one of the storage options available. The Central government provides Viability Gap Funding (VGF) of up to 30% of capital cost or ₹27 lakh per Megawatt (MW) whichever is lower for BESS.
According to data from the Union Ministry of New and Renewable Energy (MNRE), Tamil Nadu’s installed renewable energy capacity was 24,274 MW as on December 31, 2024, out of which wind energy accounted for 11,409.04 MW and solar energy accounted for 9,518.37 MW.
“We are aiming to add 30 gigawatt (GW) of renewable energy by 2030. Out of this solar would be 18-20 GW and wind would be 5 GW,” a TNGECL official said.
With the BESS cost coming down, we are looking at the option for solar energy. We will soon float a tender for battery energy storage systems with capacity of 500 MW/1,000 megawatts hours (Mwh), the official added.
The BESS would help in ensuring round-the-clock power from renewable energy sources, the official noted.
Vikram. V, Vice-President & Co-Group Head – Corporate Ratings, ICRA Limited, said the bid tariff for the battery energy storage system projects have been on the declining trend over the past two years.
Including the VGF component, the prices in the auction for battery energy storage system projects have come down from over ₹10.8 lakh/MW/month to less than ₹4.0 lakh/MW/month in the first and second quarter of financial year 2025. It has further dropped to less than ₹3.0 lakh/MW/month (including the VGF component) in recent bids, he noted.
The average tariff has declined to ₹2.26 (lakh/MW/month) in the auction conducted by Gujarat Urja Vikas Nigam Limited in December 2024 from ₹10.84 (lakh/MW/month) in August 2022 in an auction conducted by Solar Energy Corporation of India Limited, as per data shared by ICRA.
“The significant scale-up in battery manufacturing capacity, mainly in China, is the key reason for the decline in the battery prices in recent years. This in turn is driving the decline in bid tariffs for BESS projects in India,” Mr. Vikram said.
Published – January 20, 2025 07:25 pm IST
