NLC India Renewables (NLC India), Bondada Engineering, and Oriana Power have won Tamil Nadu Green Energy Corporation’s (TNGECL) auction to set up 500 MW/1,000 MWh standalone battery energy storage system (BESS) projects in six locations in Tamil Nadu on a build-own-operate basis.

NLC India Renewables won 250 MW/500 MWh at a tariff of ₹248,000 (~$2,880.04)/MW/month, Bondada Engineering won 200 MW/400 MWh at a tariff of ₹246,000 (~$2,856.81)/MW/month, and Oriana Power won 50 MW/100 MWh at a tariff of ₹246,000 (~$2,856.81)/MW/month.NLC India will set up a BESS project each at the Ottapidaram, Anuppankulam, and Kayathar substations. Bondada Engineering will set up one BESS project each at Vellalaviduthi and Thennampatty substations. Oriana Power will set up a BESS project at the Karaikudi substation.

The tender was floated in March 2025.

The projects must be completed within 18 months.

The projects will enable the Tamil Nadu Generation and Distribution Corporation to charge and discharge the storage systems on demand. The BESS must also enable charging and discharging in groups of 50 MW/100 MWh and 100 MW/200 MWh.

The projects must be designed for interconnection with the state transmission utility network. They must also enable charging and discharging with a C-rate (charging/discharging rate) of 0.5.

The three auction winners must ensure that the BESS is available for two full operation cycles daily and guarantee a minimum annual system availability of 95%. They must also ensure that 100% of the BESS’ minimum dispatchable capacity is met.

The projects must guarantee a minimum AC-to-AC round-trip efficiency of 85% every month.

The BESS requirement is technology agnostic. However, only commercially established and operational technologies must be used to minimize the technology risk and achieve timely project commissioning.

The projects will be charged by drawing power from the Tamil Nadu Generation and Distribution Corporation (TNPDCL) and injecting it into its network per the instructions issued by the state load dispatch centers.

TNPDCL will provide the required power for charging the BESS under the minimum system efficiency agreement.

The Tamil Nadu Transmission Corporation will provide land to the selected bidders for an annual lease rate of ₹1 (~$0.011)/project/year.

Under the viability gap funding (VGF) support from the Ministry of Power, the projects will receive VGF of 30% of the BESS’ capital cost or ₹2.7 million (~$31,101)/MWh, whichever is lower. This funding will be disbursed in five tranches.

To encourage the development of more BESS projects, the Ministry of Power announced the second tranche of VGF in April 2025. 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.