Daily News Wrap-Up: Industry Hails Viability Gap Funding for Battery Storage Projects

Supreme Court clarifies ownership, consumption terms for captive power projects

October 12, 2023


The recently announced Viability Gap Funding (VGF) for Battery Energy Storage Systems (BESS) has been welcomed by industry stakeholders for its potential impact on system cost, demand, and manufacturing in the country. In September 2023, the Union Cabinet approved the VGF program, allocating an initial sum of ₹94 billion ($1.1 billion), with ₹37.6 billion ($452 million) designated as budgetary assistance to facilitate 4 GWh of BESS projects by 2030-31.

In a recent ruling, the Supreme Court of India reaffirmed that a user who owns 26% of a captive power-generating project and utilizes 51% of its electricity could be classified as a captive user. It also held that if a group of individuals constitutes the captive users, they must collectively possess a minimum ownership stake of 26% in the project and jointly consume at least 51% of the electricity generated annually. The Court noted that the ownership threshold of 26% must be maintained consistently throughout the calendar year.

Raipur Division of South East Central Railway in Chhattisgarh has invited bids for state-wise empanelment of agencies to implement grid-connected rooftop solar power projects of 1.165 MW capacity at its yards and workshops through public-private partnership and on a design, build, finance, operate, and transfer basis. The projects would be developed in two capacity ranges— more than 10 kW and up to 100 kW, and more than 100 kW and up to 500 kW. Bidders can quote for one or both capacities.

Uttarakhand Jal Vidyut Nigam, a state government enterprise, has invited bids for setting up a 2.5 MW canal bank grid-connected solar power project on the Yamuna Power Channel in Dakpathar district, Dehradun, Uttarakhand, on a build, own, operate, and transfer basis. The last date for the submission of bids is November 6, 2023. Bids will be opened the next day. Bidders have to submit ₹5,000 (~$60) as the cost of the tender and ₹75,000 (~$901) as a bid processing fee, along with 18% GST.

The Central Electricity Regulatory Commission has directed the Grid Controller of India (Grid-India) to organize two Renewable Energy Certificate (REC) trading sessions every month– the second and last Wednesday of each month– for the upcoming six months, starting from October. The Commission clarified energy sold by renewable energy generators registered under the REC mechanism in conventional market contracts at power exchanges is eligible for the issuance of RECs.

The Punjab State Power Corporation has floated a tender to procure 1 GW of solar power from interstate transmission system-connected projects. This will be followed by an e-reverse auction for projects with a capacity of 50 MW or more located anywhere in India. The last date for submission of bids is October 31, 2023. Bids will be opened on November 2. Bidders have to pay ₹25,000 (~$300) plus 18% GST as the cost of the tender and a processing fee of ₹300,000 (~$3,604) plus 18% GST.

SJVN Green Energy, a wholly-owned subsidiary of SJVN, has invited bids to commission two grid-connected solar power projects with a combined capacity of 120 MW for Assam Power Distribution Company.The projects include a 70 MW project in Dhubri and a 50 MW project in Sonepur in Assam. The selected developers must oversee the projects’ operation and maintenance for three years. The last day to submit the bids is November 3, 2023. Bids will be opened the same day.

The Union Cabinet has approved the amendment to the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957, setting reduced royalty rates for three critical and strategic minerals – lithium, niobium, and Rare Earth Elements (REEs) – used in the energy transition technologies. The development paves the way for the inaugural auction of these mineral blocks with loyalty rates reduced by the Ministry of Mines from an elevated default rate of 12% of average selling (ASP) to 3% of the London Metal Exchange price for lithium, 3% of ASP (primary and secondary sources) for niobium, and 1% of ASP for rare earth oxide.