NVVN’s 500MWh Storage Tender Breaks New Ground With Record Low Tariffs

NTPC Vidyut Vyapar Nigam’s (NVVN) first standalone energy storage tender has broken new ground with record low tariffs. While the bids come with viability gap funding, even after accounting for that, the winning bids are lower than the lowest seen so far at Rs 3.41/unit by SECI.

The tender with a  total capacity 500 MW/ 1000 MWh (2 cycle operation) was won by IndiGrid, Kintech Synergy and HG Infra at a discovered tariff of Rs 2.37-2.38 lacs/MW/month. While Indigrid won for 250 MW, Kintech walks away with a 65 MW win, and HG Infra the remaining 250 MW. Among major developers missing out are JSW New Energy, Gensol Engineering and Avaada Energy.

Launched in September this year, the tender sought successful bidders to set up a Battery Energy Storage System (BESS) and make it available for charging and discharging. The tender mentioned that this would be on an “on demand” basis. Additionally, the tender stated that the charging power for the BESS project is to be provided by the BESS Implementing Agency (BIA), which is NVVN, through fixed-term contracts with solar, wind, or hybrid energy sources. To meet the remaining charging power requirement, the tender stated that the requirement is to be met through market purchases or any other source of energy (BESS charging source).

The tender also placed limits on the total capacity offered and project sizing. The document set the minimum bid size as 100 MWh, i.e., 50 MW x 2 hours. The tender also mentioned the maximum contracted capacity allocation for a bidder as 125 MW/250 MWh.

With the critical role that BESS is expected to play in supporting the integration of renewable energy into the Indian grid, the drop in prices augurs well for faster capacity additions in the future as well, which will be a huge point of comfort for power regulators as well as discoms. SaurEnergy had highlighted this aspect earlier this week in this article.