The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) is planning an INR 20,000 crore project to set up battery-based storage units for 16,000MW of solar power. This project aims to conserve surplus solar energy for use during peak demand hours at night. MSEDCL has sought viability gap funding (VGF) from the Central government to make the project financially viable.

Project Details

MSEDCL is currently implementing the Mukhyamantri Saur Krishi Vahini Yojana 2.0, under which several solar parks are being constructed across the state to generate 16,000MW of solar power. The project deadline is 2026. However, there is currently no facility to store the excess generated power at this level, prompting MSEDCL to invest in a Battery Energy Storage System (BESS).

Financial Impact

The cost of setting up a battery unit for 1MW is around INR 1.25 crore and requires a 2MWh capacity. For 16,000MW, the cost will be around INR 20,000 crore. The Central government provides a subsidy of nearly INR 27 lakh per MWh, while the rest needs to be raised by the firms that bag the contracts. MSEDCL has sent a subsidy proposal to the Central government, which will consider it.

Implementation

A small contract has been awarded to a private firm to build storage facilities using BESS at 75 substations of the discom. The first such project is being implemented for 750MW, for which 1,500MWh capacity needs to be built. Excess solar power will be stored at these locations and later used during high demand hours. This power will be bought by MSEDCL from the firm at a lower cost. The plan is to implement the project on a large scale, with tenders to be floated and different companies bidding for it if the subsidy is secured. MSEDCL's initiative is a significant step towards integrating renewable energy into the power grid, and its success will depend on the viability gap funding from the Central government.

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