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Solar Energy Corporation of India Limited (SECI) has issued a tender for setting up 500 MW/1000 MWh Standalone Battery Energy Storage Systems (BESS) to provide Discoms with storage facilities to be used on an "on-demand" basis.

The tender marks the first tranche of the Government's immediate target of setting up 4000 MWh of Battery Storage Capacity as part of achieving increased penetration of RE in the national grid. Central Electricity Authority (CEA)/MoP has prepared a Report on Optimal Generation Capacity Mix for 2029-30.

As per the report, a Battery Energy Storage capacity of 27,000 MW/108,000 MWh (4-hour storage) is projected to be part of the installed capacity in 2029-30.

The tender, which will be first-of-its-kind tender in the country, has been issued under the Standard Bidding Guidelines issued by the Ministry of Power in March 2022. The total capacity to be set up under the RfS is 1000 MWh (500 MW x 2hrs), which will constitute two projects of 500 MWh (250 MW x 2 hrs) capacity each. The Projects will be installed in the vicinity of the Fatehgarh-III Grid-Substation of the ISTS network, in the State of Rajasthan.

The Buying Entities will be offered the storage capacity to charge and discharge the same daily through RE power, as per their energy shifting requirements.

The projects will be set up on a "Build-Own-Operate" basis, with the connectivity and necessary permissions being under the scope of the Project Developer. Land for the projects will be provided by the CTU to the Developers on a right-to-use basis. SECI is the implementing agency of this tender and will be procuring capacity on behalf of the Buying Entities, charging a facilitation fee in the form of a trading margin.

A unique feature of this tender is the composition of capacity offtake. Of the total capacity being installed under the tender, 60 per cent of the capacity will be off taken by SECI on behalf of the Buying Entities, and the offtake of 40 per cent of capacity will be the responsibility of the Developers, through third-party or market sale. Thus, through this tender, the Government provides substantial support for market development in the energy storage domain. Out of the 60 per cent capacity off taken by SECI, 30 per cent will be earmarked to be used by NLDC, POSOCO for Grid Ancillary Services.

The Developer shall make the BESS available for 2 operational cycles per day, i.e. 2 complete charge-discharge cycles per day. The Projects are required to demonstrate minimum Availability of 95 per cent on an annual basis, a minimum Round-Trip Efficiency of 85 per cent monthly, and suitable liquidated damages stipulated in case of shortfall in meeting the above criteria. The term of the Projects will be 12 years, with the Scheduled Commissioning Date being 18 months from the date of signing of the Battery Energy Storage Purchase Agreement (BESPA). Financial Closure is to be achieved within 12 months of the signing of BESPA.