Author: PPD Team Date: 24/03/2025
The Ministry of Power (MoP) has directed all states and implementing agencies to finalise the awarding of battery energy storage system (BESS) contracts by June 2025. This move aims to ensure the completion of the viability gap funding (VGF) programme by May 2027.
Once contracts are awarded, the programme will require 18 to 24 months for implementation. Due to declining BESS prices, the initial target of 4,000 MWh has been revised to 13,200 MWh. The allocation is divided into three components: the market component, the state component, and the central public sector undertaking (CPSU) component.
Under the market component, the first tranche includes 1,000 MWh allocated to NTPC Vidyut Vyapar Nigam Limited (NVVN) with a VGF of Rs 4.6 million per MWh. The second tranche assigns 1,200 MWh to the Solar Energy Corporation of India Limited (SECI) with a VGF of Rs 2.7 million per MWh.
The state component covers 6,000 MWh, distributed across Rajasthan, Tamil Nadu, Karnataka, Gujarat, Maharashtra, Telangana, Bihar, and Kerala, with each state receiving VGF support of Rs 2.7 million per MWh.
Additionally, 5,000 MWh has been allocated under the CPSU component to NVVN, NHPC Limited, and SJVN Limited, also with a VGF of Rs 2.7 million per MWh.
The MoP’s push for faster contract finalisation is expected to accelerate energy storage deployment, supporting India’s renewable energy integration and grid stability.