BHUBANESWAR: The state government has conveyed its willingness to the Ministry of Power to implement the allocated capacity of battery energy storage system (BESS) under the viability gap funding (VGF) scheme to enhance its grid stability.
This is in response to a recent communication from the New and Renewable Energy division of the ministry allocating 500 megawatt hour (MWh) to Odisha out of the total allocation of 16,500 MWh to 15 states to ensure grid integration of renewable energy (RE) and reliable electricity supply.
Acknowledging the importance of BESS, GRIDCO in its response to the ministry said, “The state is committed to accelerating the development of RE and associated infrastructure in line with national priorities and is keen to support the initiative.”
GRIDCO being the nodal agency of the state government for RE projects has identified 10 locations for installation of the battery energy storage system. However, in the first phase BESS will be set up in four grid sub-stations under VGF scheme supported through the power system development fund (PSDF), sources said.
The battery storage systems can be operated in single-cycle mode where they are charged using solar or wind power and discharged during peak demand or in double-cycle mode. The grid energy is used for charging during low-demand hours and discharged during peak periods.
Integrating storage with solar projects would improve grid stability, enhance transmission efficiency and reduce overall energy costs, contributing to long-term sustainablity of renewable energy sector, said the sources.
The VGF will provide financial support to developers of BESS projects, helping to offset the cost of construction. While the cost of BESS is declining, the levelised cost of storage for four hours is expected to be around Rs 4.75 per kWh. The proposed VGF amount will be approximately 16 per cent of the BESS capital cost.
The sources further said that tenders will be floated inviting request for proposal for tariff-based competitive bidding.The developers will submit bids for the price they are willing to charge for storing and discharging electricity, allowing for the most cost-effective allocation of BESS resources. This will ensure a fair and competitive market for BESS development.
As GRIDCO is failing to meet the renewable purchase obligation (RPO) target of 33 per cent by more than seven per cent, BESS will be of great help to achieve the target, the sources said.