Tamil Nadu Electricity Regulatory Commission (TNERC) has approved the Tamil Nadu Transmission Corporation (TANTRANSCO) to lease parts of its substation land to private developers for installing battery energy storage systems (BESS), charging a nominal fee of INR 1 (about USD 0.0113) per project per year for 15 years.

Project Details and Scope

The Electricity Transmission Corporation of Tamil Nadu (TANTRANSCO) sought approval from the Commission to permit battery energy storage system (BESS) developers to utilize its substation land. The goal was to set up 1,000 MWh of energy storage capacity under the state's Viability Gap Funding program, which would be managed by the Tamil Nadu Green Energy Corporation (TNGECL).

TNGECL would oversee five projects, each with 100 MW and 200 MWh capacity, at substations in Thennampatty, Anuppankulam, Ottapidaram, Vellalaviduthi, Kayathar, and Karaikudi. The land at these six substations would be leased for a token fee of INR 1 (about USD 0.0113) per project per year. Only surplus land not needed for transmission would be used, ensuring core transmission activities remain unaffected.

Rationale for Energy Storage Implementation

According to TANTRANSCO, Tamil Nadu has been a pioneer in renewable energy, with a total capacity of almost 24 GW from solar, wind, biomass, and cogeneration projects. However, the variable nature of renewable generation puts a lot of strain on the grid. The constant switching between thermal and renewable energy to balance this variability has created operational headaches.

The petitioner emphasized that energy storage systems are crucial for maintaining a stable grid and enabling the further integration of renewable energy. Although pumped storage projects are being promoted, they require a long time to complete. Battery energy storage systems offer a quick fix to address fluctuations in the meantime.

Government Program Integration

The Union government has introduced a program to develop 4 GWh of BESS. Tamil Nadu has been allocated 1 GWh under this initiative. TANTRANSCO maintained that leasing the land at a nominal rent serves the public interest, supporting the state's renewable energy integration goals while addressing grid stability challenges. The approval allows private BESS developers to utilize transmission corporation substation land for a 15-year lease period, facilitating the development of battery energy storage infrastructure across multiple locations in Tamil Nadu.

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