ACME Solar and Patel Infrastructure have won NHPC’s auction to set up 500 MW/1,000 MWh intrastate transmission system-connected standalone battery energy storage systems (BESS) in Andhra Pradesh (Tranche II).

ACME Solar won 225 MW/ 450 MWh at a tariff of ₹222,000 (~$2,580.20) MW/month for the Ghani substation and 50 MW/100 MWh at ₹210,000 (~$2,440.73)/MW/month for the Kuppam substation.

Patel Infrastructure won 225 MW/450 MWh at a tariff of ₹208,000 (~$2,417.48)/MW/month for the Jammalamadugu substation.

The tender was issued in February this year.

Developers will be eligible for viability gap (VGF) funding of ₹2.7 million (~$32,114)/MWh or 30% of the project’s capital cost, whichever is lower.

They must also ensure the BESS is available for two operational cycles daily, maintain a minimum monthly system availability of 95%, and guarantee an AC-to-AC roundtrip efficiency of 85% monthly.

Developers must employ commercially established and operational technologies that are compliant with the guidelines specified in codes and standards to minimize technology risks.

They must commission the projects within 18 months of signing the battery energy storage purchase agreement.

The Ministry of Power recently announced the second tranche of VGF to support BESS development. Under this tranche, a VGF of ₹1.8 million (~$21,043)/MWh will be provided to support the development of 30 GWh of BESS capacity.

Of the proposed 30 GWh, 25 GWh of storage capacity has been allocated across 15 states, while NTPC will develop the remaining 5 GWh.

The Central Electricity Authority estimates the need to deploy 37 GWh BESS capacity by 2027. This requirement is expected to increase to 236 GWh by 2031-2032. A BESS capacity of 13.2 GWh has been approved under the ongoing VGF program for BESS development.

In March 2025, the Ministry directed all states and implementing agencies to award all BESS contracts by June 2025, enabling the VGF program to be completed by May 2027.