The Tamil Nadu Electricity Regulatory Commission (TNERC) has approved the proposal of the Tamil Nadu Green Energy Corporation Limited (TNGECL) to float a tariff-based competitive bidding tender for developing a 1500 MWh Battery Energy Storage System (BESS) across seven substations in the State. The project will be executed under a Build-Own-Operate (BOO) model as part of the Union Ministry of Power's Viability Gap Funding (VGF) scheme supported by the Power System Development Fund (PSDF).

Project Specifications and Locations

The INR 18-lakh-per-MWh VGF-backed scheme will enable TNGECL to select developers through an e-reverse auction process for the installation of 375 MW (4-hour cycle) standalone BESS facilities. The battery energy storage systems will be established at substations in Palladam, Pudukkottai, Thatchankurichi, Tiruvarur, Karamadai, Thappagundu, and Anaikadavu.

The BESS units are required to provide 1.5 full charge-discharge cycles per day, ensuring 95 percent availability. Capacity charges will be paid on a 'per MW per month' basis under the operational framework.

Agreement Structure and Timeline

A 15-year Battery Energy Storage Purchase Agreement (BESPA) will be executed between Tamil Nadu Power Distribution Corporation Ltd. (TNPDCL) and successful bidders. Developers must commission their respective projects within 18 months of signing the BESPA.

The TNERC has instructed TNGECL to incorporate specific provisions for metering, separate service connections for non-storage power needs, and real-time communication with grid control centers for operational transparency.

Previous Storage Initiative Success

The latest approval follows Tamil Nadu's first large-scale storage initiative earlier this year, which marked a significant step in the state's renewable energy journey. In June 2025, three companies won the TNGECL tender to develop a combined 1,000 MWh of battery energy storage systems.

NLC India Renewables Limited (NIRL), a subsidiary of NLCIL, was awarded a 500 MWh project. Bondada Engineering Limited (BEL) secured a 400 MWh project, while Oriana Power was allocated a 100 MWh project in the earlier tender process.

The battery energy storage systems aim to improve renewable energy integration, grid stability, and peak demand management, especially during evening and morning load hours.

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