CHENNAI: In a major step towards augmenting clean and reliable power supply in Tamil Nadu, a first-of its-kind contract for setting up 500 MWh Battery Energy Storage System (BESS) has been awarded to NLC India Renewables Limited (NIRL).
The project awarded by Tamil Nadu Green Energy Corporation Limited (TNGECL) is the first large-scale battery storage system to come up in Tamil Nadu after the state came up with an exclusive policy for energy storage systems.
Under the central government’s Viability Gap Funding (VGF) Scheme, 30% of the capital cost for BESS will be provided as financial support. Tamil Nadu is among the six renewable energy-rich states that were allocated BESS capacities under the initiative alongside Gujarat, Karnataka, Rajasthan, Telangana, and Maharashtra.
Officials said the battery system will help store surplus solar and wind energy, which are seasonal energy sources, and supply the power generated when needed, especially during night hours or cloudy days.
The award comprises development of three standalone BESS projects with a combined capacity of 250 MW / 500 MWh, to be established at 400/230/110 kV Ottapidaram Substation, 400/230/110 kV Annpankulam Substation and 400/230/110 kV Kayathar Substation in Tamil Nadu.
A senior official from TNGECL said that large-scale tapping of renewable energy sources like solar and wind comes with its own challenges, including technology for storing power during lean seasons and managing the state’s power grid, as these sources are not available throughout the year.
Speaking to TNIE, the official said, “Since renewable energy is not steady all the time, we are facing integration issues in the grid. To make better use of the existing transmission lines even when solar or wind power is not available, battery energy storage systems (BESS) are the best solution.”
He further said that storing solar power during the day will help supply clean electricity during evening hours when power demand is high. “This will reduce costs and also support clean energy usage beyond daylight hours, helping the state move towards low-carbon growth,” the official added.
TNGECL has planned to set up 1,000 MWh of battery storage capacity in selected substations under the State’s Viability Gap Funding (VGF) scheme. In the first phase, a 500 MWh BESS project has been awarded. Plans are under way to set up 4,000 MWh of battery storage in Tamil Nadu in the coming years.
According to NLC India, the projects will be executed under the Build-Own-Operate (BOO) model and have been awarded through a tariff-based competitive bidding process under the State Component of the Viability Gap Funding.
Under the current tender agreement, TN Power Distribution Corporation Limited will procure energy storage services from NIRL through a long-term Battery Energy Storage Purchase Agreement for 12 years.
Power points
Model Build-Own-Operate
Total Capacity 250 MW / 500 MWh (two full charging/discharging cycles per day)
Tenure 12 years