Chennai Unveils 1,500MWh Battery Energy Storage System

Key Takeaways

Tamil Nadu plans to implement a 1,500 MWh battery energy storage system (BESS) to support renewable energy.
The Tamil Nadu Green Energy Corporation Ltd is in the final stages of selecting a bidder before the model code of conduct is announced.
The project will utilize viability gap funding from the Union government to enhance investment in renewable energy storage.

Rapid Progress on Battery Energy Storage in Tamil Nadu

Tamil Nadu is advancing its renewable energy strategy with a planned 1,500 megawatt hour (MWh) battery energy storage system (BESS). The Tamil Nadu Green Energy Corporation Ltd (TNGECL) is expected to finalize the winning bidder and issue a letter of authorization (LOA) shortly. Finance Minister Thanam Thennarasu highlighted the urgency during the recent interim budget presentation, noting the need to expedite the tender process. This urgency stems from two factors: the impending announcement of the model code of conduct (MCC) and the upcoming deadline for securing viability gap funding (VGF), which supports BESS projects.

Under the VGF scheme, the Union government provides 40% of the project costs to stimulate investor interest. In a subsequent phase, the Union power ministry has allocated ₹5,400 crore to 15 states to set up a total of 30 gigawatts of BESS capacity, with Tamil Nadu’s 1,500 MWh project included.

Previously, in the first phase, TNGECL awarded contracts for a 1,000 MWh BESS project to various companies: NLC India Renewables Ltd received a contract for 500 MWh, Bondada Engineering Ltd for 400 MWh, and Oriana Power for 100 MWh, with these projects progressing through various stages of development.

The new BESS facilities will be strategically located in regions where renewable energy generation, particularly solar and wind, is high. This setup will allow for the storage of surplus green energy, which can be utilized during non-solar hours, thereby alleviating grid stress and lowering power purchase costs. Once operational, these systems are projected to store about 2.25 million units of electricity, allowing energy release during peak evening hours for up to four hours.

Following the issuance of the LOA, both the appointed developer and TNGECL will approach the Tamil Nadu Electricity Regulatory Commission (TNERC) to establish the storage rates, ensuring that the process aligns with regulatory standards and supports the state’s energy goals.

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