The Ministry of Power has allowed states to implement standalone battery energy storage system (BESS) projects under viability gap funding (VGF), supported by the Power System Development Fund, in both two-hour and four-hour configurations.

The original guidelines specified that the BESS capacity should preferably have a two-hour discharge duration and average one and a half cycles per 24-hour period.

The amended guidelines, however, clarified that states can retain the right to utilize at least 6,300 cycles of BESS operation during the contract term.

The Ministry permitted deviation from the guidelines in response to requests from Bihar, Odisha, Chhattisgarh, Rajasthan, and Kerala.

Industry experts believe that a four-hour, one-cycle operation is more viable than a two-hour, two-cycle operation.

After receiving the guideline relaxation, the Rajasthan Rajya Vidyut Utpadan Nigam’s tender for setting up a standalone BESS of 500 MW/2,000 MWh capacity with a four-hour, one-cycle operation is now open for offers, Ajitabh Sharma, Principal Secretary (Industries), Rajasthan government, said in a social media post.

“We have 4,000 MWh under implementation on a two-hour two-cycle design pattern. This 2,000 MWh is another tranche under a four-hour single-cycle design. A four-hour single-cycle discharge in phases will give more flexibility in renewable energy integration. This is the final lot of our current plan of setting up 6,000 MWh of BESS in Rajasthan,” he said.

Debmalya Sen, President at India Energy Storage Alliance, said the four-hour, one-cycle operation is a good move. Distribution companies will now have the flexibility to use the BESS as needed by utilizing partial cycles. They could break down the four hours into multiple stages. A four-hour cycle will also improve battery health.

Concurring, Kartik Seth, Managing Partner at Chambers of Kartik Seth, said the four-hour, one-cycle relaxation is a pragmatic initiative that enhances asset longevity and commercial viability. This relaxation will enhance grid flexibility, bolster ancillary services, and facilitate deeper integration of renewables.

The government’s permitting of a four-hour, one-cycle BESS operation is significant for a solar-rich state like Rajasthan, which has experienced high levels of solar curtailment in recent months.

Stakeholders had commented that, since transmission corridors are much harder to build than renewable energy projects, BESS can facilitate the full utilization of solar energy.  Energy storage will serve as a buffer against both forecast variability and transmission congestion.

In June, the government announced the second tranche of VGF of ₹1.8 million (~$21,043)/MWh to support the development of 30 GWh of BESS capacity.