CHENNAI: The Tamil Nadu Electricity Regulatory Commission (TNERC) has given approval to the Tamil Nadu Transmission Corporation (Tantransco) to lease out its substation lands at six locations across the state to private players, virtually free of cost, for setting up a 1,000-MW Battery Energy Storage System (BESS).
The land will be leased at Rs 1 per year for a period of 15 years under the Viability Gap Funding (VGF) scheme. Officials said that they have decided to lease out the land for a negligible price so as to prevent developers from hiking their tariffs for storage, which is currently at Rs 2.75 per unit, citing higher rents.
In its order, TNERC stated, “The substation land to be utilised for development of BESS projects should not be sold, transferred or otherwise used for any other purpose. These lands can only be used in a restrictive manner on a right-to-use basis and under the supervision and control of Tantransco.”
A senior official from Tantransco said the storage facilities will come up at the substations in Thennampatty, Anuppankulam, Ottapidaram, Vellalaviduthi, Kayathar and Karaikudi. “These are empty lands and we are making use of them to install the 1,000-MW BESS,” the official told TNIE.
The BESS developers will store renewable energy, which will be supplied to the distribution company (Discom) at Rs 2.75 per unit. “Including both generation and storage, the cost of power will come to Rs 5.50 per unit, which is far cheaper than thermal power that costs around `10 during peak hours,” the official added.
“Unlike thermal power, renewable energy is not available round the clock, making storage facilities crucial for balancing demand and supply,” the TNERC order stated.