MoP Issues Viability Gap Funding Guidelines For BESS Project

MoP Issues Viability Gap Funding Guidelines For BESS Project

The Ministry of Power (MoP) has issued the guidelines for the Rs 94 billion program to provide viability gap funding (VGF) of up to 40% to develop 4,000 Mh of battery energy storage systems (BESS) capacity across the country.

According to the MoP, the budget that has been allocated to the programme stands at $37.6 billion and will run for three years from 2024 to 2026. Further, the ministry also stated that projects be completed within 24 months from the agreement’s signing date. Funds will be disbursed in five tranches linked to milestones like financial closure and commercial operations.

The notice also specifies that battery implementing agencies (BIAs) will be responsible for securing power to charge storage systems through renewable sources and market purchases. They will discharge stored energy through power exchanges, bilateral contracts, and ancillary services to optimize grid management and revenue generation.

Project awards will follow the tariff-based competitive bidding process according to MoP guidelines. Developers will compete by quoting the lowest annualised fixed costs subject to tariff caps determined by a committee. Regarding capacity allocation, private sector participation is mandated with caps on maximum capacity awarded to a single developer. One project developer can get up to half the total capacity in a specific round. However it cannot receive over 1,000 Mh of cumulative capacity across all rounds. The ministry also added that only projects with at least 100 Mh capacity are eligible for consideration.

Earlier, this month, the Ministry of New and Renewable Energy released guidelines regarding scheme on skilling, up-skilling, and re-skilling under the national Green Hydrogen Mission. The scheme aims to undertake a comprehensive skill gap analysis covering key areas of the Green Hydrogen ecosystem continuously along with the creation/updation of a registry of skills as required by the Green hydrogen value chain.

Moreover, the MNRE scheme further aims to design and develop curricular elements for use in schools, Industrial Training Institutes (ITI), Polytechnics, and HEIs at various levels and segments of the Green Hydrogen value chain. With that the scheme will also delve into developing Qualification Packs (QPs), and training content including training manuals and online study resources for Green Hydrogen and allied sectors for the use of STT and up-skilling courses.