Tamil Nadu Issues 500 MW/1000MWH BESS Tender With VGF

Tamil Nadu Generation and Distribution Corporation Limited (TNEGCL) has issued a tender for the development of 500 MW/1000 MWh battery energy storage projects under the Build-Own-Operate (BOO) model. The tender includes six standalone Battery Energy Storage Systems (BESS) of 1000 MWh (500 MW x 2 hours) to facilitate “on-demand” energy storage through tariff-based competitive bidding under the State Component of Viability Gap Funding (VGF). The last date for bid submission is  April 2nd, 2025

The selected battery energy storage developer (BESSD) will be responsible for setting up and operating the BESS, to ensure that the energy is made available to the Tamil Nadu Power Distribution Corporation Limited (TNPDCL). It can use the energy for charging and discharging as required. The project offers a total capacity of 1000 MWh, with a minimum bid size of 50 MW x 2 hours (100 MWh). Bidders must quote in multiples of this size. Each 50 MW/100 MWh project will be allocated approximately 7000 sqm of land.

Project Locations 

The project will be implemented across various locations, with three projects of 200 MWh battery energy storage capacity in Tirunelveli, a 200 MW project in Trichy, and a 100 MW project in Madurai. The associated substations will be located at V. Vellalaviduthy, Thennampatty, Ottapidaram, Annupankulam, Kayathar, and Karaikudi. The full project capacity must be commissioned within 18 months from the effective date of the Battery Energy Storage Purchase Agreement (BESPA).

Viability Gap Funding

The tender offers a Viability gap funding VGF of up to 30% of capital cost for BESS or Rs.27 Lakh per MWh whichever is 10 lower, shall be provided by the Central Government under the State Component. The VGF shall be a non-recurring expenditure and would be fully funded from a central grant. Under the developer would be allocated VGF of Rs.27,00,000/MWh or 30% of the capital cost of the Project Capacity awarded, whichever is lower, and is to be provided by the Central Government to BESSD under the State Component. for each Developer