SECI will offtake 60% capacity for third-party leasing, while 30% will be earmarked by northern and national grid operators for their ancillary services
In what is being touted as the first-of-its-kind facility, the Solar Energy Corporation of India Limited (SECI) has issued the tender for setting up 500 MW/1000–MWh Standalone Battery Energy Storage Systems (BESS).
It will undertaken at an investment of Rs 2,000 crore to make green energy available on tap for discoms and grid operators during peak demand, but spike in prices of lithium — a key ingredient for making batteries — and supply chain disruptions due to the Russia-Ukraine conflict may weigh on industry response.
Discoms can hire storage capacity, which will be charged using renewable energy, and draw power to manage peak demand. The project is to be located in the vicinity of the Fatehgarh-III substation of the interstate transmission system in Rajasthan. The project will be set up on a build-own-operate basis, with the developer being responsible for securing connectivity and necessary permissions. Land will be provided by the central transmission utility on a right-to-use basis. The developer has to make storage capacity available for two operational cycles per day, or two complete charge-discharge cycles a day.
SECI will off-take 60% capacity for third-party leasing, while 30% will be earmarked by northern and national grid operators for their ancillary services. But industry representatives said the project’s success will depend on viability gap funding from the Centre, especially since 500% increase in lithium prices has made batteries expensive and will push up power tariff unviable for entities’ leasing capacity.
But the ministry statement said the project is aimed at providing support for developing a market in the energy storage domain. Currently, India is considered a low-priority market by global battery makers, who are focusing on the US and Europe that are focused on storage-based renewable energy projects.
The government has set a target of 4,000MWh of battery storage capacity as part of the plan to increase penetration of renewable energy in the national grid. A Central Electricity Authority report on optimal generation capacity mix envisages a battery storage capacity of 27,000MW, or 108,000MWh — essentially four-hour storage — by 2029-30.
