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					</table><p>The <a href="https://www.india.gov.in/my-government/whos-who/council-ministers" target="_blank" rel="noopener">Union Cabinet</a> has approved the viability gap funding (VGF) for the development of the battery energy storage systems (BESS) program with an initial allocation of ₹94 billion (~$1.1 billion), which includes budgetary support of ₹37.6 billion (~$452 million).</p>
<p>The VGF aid can potentially offset as much as 40% of the project&#8217;s capital costs, contingent upon the projects being finalized and operational within an 18 to 24-month timeframe.</p>
<p>The program is expected to significantly reduce the cost of battery storage systems, thereby enhancing their economic viability and forwarding the government&#8217;s sustainable efforts.</p>
<p>The approved program involves the development of 4,000 MWh of BESS projects by 2030-31, supported by up to 40% of the capital cost in the form of VGF.</p>
<p>The approval comes days after the Ministry of Power <a href="https://www.mercomindia.com/ministry-viability-gap-funding-energy-storage-projects" target="_blank" rel="noopener">released</a> a comprehensive framework to create an ecosystem for developing energy storage systems. To improve the economic viability of energy storage and render the BESS a practical option, a proposal was put forward to extend VGF support to the initial BESS projects.</p>
<p>One of the central objectives of the program is to tap into the vast potential of renewable energy sources, including solar and wind power. By doing so, it aims to provide clean, reliable, and affordable electricity to citizens nationwide.</p>
<p>The provision of VGF support under this program serves a strategic purpose: to achieve a Levelized Cost of Storage (LCoS) ranging from ₹5.50 (~$0.06) to ₹6.60 (~$0.07) per kWh.</p>
<p>The cost target makes stored renewable energy an economically viable option for managing peak power demand throughout the country. The VGF will be disbursed in five tranches, closely linked to various stages of BESS project implementation.</p>
<p>A minimum of 85% of the BESS project capacity will be allocated to distribution companies (DISCOMs) to ensure that the program&#8217;s advantages reach consumers directly.</p>
<p>The allocation is expected to promote the integration of renewable energy into the electricity grid and minimize wastage while optimizing the utilization of transmission networks. Consequently, this would help reduce the need for expensive infrastructure upgrades.</p>
<p>The selection of BESS developers for VGF grants will be carried out through a transparent, competitive bidding process, fostering a level playing field for both public and private sector entities.</p>
<p>Last year, the Ministry of Power <a href="https://www.mercomindia.com/power-ministry-notifies-wind-hydro-and-energy-storage-purchase-obligation" target="_blank" rel="noopener">issued</a> the Renewable Purchase Obligation (RPO) and Energy Storage Obligation (ESO) until the financial year 2029-2030. The ESO will be calculated in energy terms as a percentage of the total electricity consumption and treated as fulfilled only when at least 85% of the total energy stored in the ESS is procured from renewable energy sources annually.</p>
<p>According to Mercom India Research’s <a href="https://www.mercomindia.com/product/india-solar-project-tracker">Project Tracker</a>, the pipeline of standalone BESS projects stands at 5,020 MWh.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/gautamee-hazarika/" class="vcard author" rel="author"><span class="fn">Gautamee Hazarika</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/10/Picture1.jpg" width="50" /></p>
<p><strong style="text-decoration: underline">Gautamee,</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/gautamee-hazarika/" target="_blank" rel="noopener">More articles from Gautamee.</a><br />
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<a href="gautamee@mercomindia.com" target="_blank" rel="noopener">gautamee@mercomindia.com</a></p>
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<div class="authorboxn"><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/10/Picture1.jpg" width="102" height="102" /><a href="https://mercomindia.com/author/gautamee-hazarika/" rel="noopener">Gautamee</a> is a reporter at Mercom India. Prior to Mercom, Gautamee was working as a multimedia news journalist at ThePrint in New Delhi. She has received her Bachelors in English Honors and Masters in English Literature from St.Stephen&#8217;s College, University of Delhi.<a href="https://mercomindia.com/author/gautamee-hazarika/" rel="noopener">More articles from Gautamee</a></div>
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Cabinet Approves ₹37.6 Billion Viability Gap Funding for Battery Energy Storage Projects

<p>The Solar Energy Corporation of India (SECI) conducted the auction for 1,500 MW of solar projects under the second phase of the Central Public Sector Undertaking (CPSU) program (Tranche-II). The projects have been allocated through the viability gap funding (VGF) route.</p>
<p>Out of the 1,500 MW capacity, 1,104 MW have been auctioned. The tender was undersubscribed, receiving financial bids only for 1,381 MW. As the tender had been undersubscribed, only 80% (1,104 MW) of the bid capacity was awarded out of the 1.5 GW tender.</p>
<p>Capacities have been awarded to Singareni Collieries Company Limited (81 MW), which quoted the lowest VGF amount of ₹6.8 million ($95,492)/MW and Indore Municipal Corporation (100 MW) quoted ~₹6.9 million (~$96,616)/MW. The National Thermal Power Corporation Limited (NTPC) which quoted the highest VGF of ₹7 million ($98,301) was successful in winning 923 MW out of 1,104 MW it had bid for. The highest VGF of ₹7 million (~$98,301)/MW for these projects is the maximum permissible limit.</p>
<p>NTPC has already <a href="https://mercomindia.com/ntpc-floats-tender-923-mw-solar-projects-dcr-category/" target="_blank" rel="noopener noreferrer">invited</a> bids seeking EPC (engineering, procurement, and construction) contractors to construct the 923 MW project.</p>
<p>SECI <a href="https://mercomindia.com/seci-solar-tender-1-5-gw-cpsu/" target="_blank" rel="noopener noreferrer">issued</a> the tender in August 2019, which included mini and microgrid projects. The tender stated that the power generated from these projects is expected to be procured by the government for self-use, either directly or through distribution companies on the payment of mutually agreed usage charges of not more than ₹3.50 (~$0.050)/kWh, which should be exclusive of any other third party charges like wheeling and transmission, point of connection, and cross-subsidy surcharges.</p>
<p><a href="https://mercomindia.com/wp-content/uploads/2020/01/Auction-Results-for-1500-MW-CPSU-Phase-II-Tranche-II.png"><img decoding="async" loading="lazy" class="aligncenter size-full wp-image-17069" src="https://mercomindia.com/wp-content/uploads/2020/01/Auction-Results-for-1500-MW-CPSU-Phase-II-Tranche-II.png" alt="Auction Results for 1,500 MW CPSU Phase-II (Tranche II)" width="534" height="220" srcset="https://cms.mercomindia.com/wp-content/uploads/2020/01/Auction-Results-for-1500-MW-CPSU-Phase-II-Tranche-II.png 534w, https://cms.mercomindia.com/wp-content/uploads/2020/01/Auction-Results-for-1500-MW-CPSU-Phase-II-Tranche-II-300x124.png 300w" sizes="(max-width: 534px) 100vw, 534px" /></a></p>
<p>According to the tender document, the minimum capacity that can be awarded to a bidder is 1 MW. The projects can be developed anywhere in the country, and the cells and modules used in the projects should be manufactured locally. The projects may be implemented as ground-mounted, rooftop, floating/canal-top, or a combination of these depending on the requirements of the developer.</p>
<p>The maximum time allowed for the commissioning of the full project capacity is limited to 30 months from the date of issuance of the letter of award.</p>
<p>SECI had <a href="https://mercomindia.com/seci-extends-bid-deadline-solar-tenders/" target="_blank" rel="noopener noreferrer">extended</a> the bid submission deadline for this tender to September 13, 2019. Initially, it had announced August 23, 2019, as the deadline for bid submission.</p>
<p>In September 2019, it was also reported that SECI <a href="https://mercomindia.com/seci-auction-cpsu-solar-tender-ntpc-winner/" target="_blank" rel="noopener noreferrer">conducted</a> the auction for 2,000 MW of grid-connected solar projects (Tranche-1) under the second phase of CPSU. Capacities that were awarded to NHDC were 25 MW, Singareni Collieries won 90 MW, Assam Power Distribution Company Limited was awarded 30 MW. Similarly, Delhi Metro Rail Corporation, Nalanda University, and NTPC bagged 3 MW, 5 MW, and 769.4 MW, respectively.</p>
<p>Image credit: Renovalia Energy</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/anjana/" class="vcard author" rel="author"><span class="fn">Anjana Parikh</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><p><img class="alignleft" src="https://mercomindia.com/wp-content/uploads/2019/06/Anjana2.png" width="112" height="121" />Anjana is a news editor at Mercom India. Before joining Mercom, she held roles of senior editor, district correspondent, and sub-editor for The Times of India, Biospectrum and The Sunday Guardian. Before that, she worked at the Deccan Herald and the Asianlite as chief sub-editor and news editor. She has also contributed to The Quint, Hindustan Times, The New Indian Express, Reader’s Digest (UK edition), IndiaSe (Singapore-based magazine) and Asiaville. Anjana holds a Master’s degree in Geography from North Bengal University, and a diploma in mass communication and journalism from Guru Ghasidas University, Bhopal.</p>
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Singareni Collieries Quotes Lowest VGF in SECI’s 1,104 MW Solar Auction

<p>The Ministry of New and Renewable Energy (<a href="https://mnre.gov.in/" target="_blank" rel="noopener noreferrer">MNRE</a>) has invited an Expression of Interest (EoI)  for the evaluation of its 5,000 MW Viability Gap Funding (VGF) program for solar projects.</p>
<p>This capacity falls under the batch-IV of Phase-II of the Jawaharlal Nehru National Solar Mission (JNNSM).</p>
<p>The last date for the submission of interest is November 20, 2019.</p>
<p>The ministry seeks to evaluate the program with multiple objectives, which include an assessment of its effectiveness, impact, lessons to be drawn, and the need to continue with the program.</p>
<p>It would require critical analysis and evaluation of the solar developer selection criteria, methods adopted by the implementing agency for the program to suggest a better approach.</p>
<p>The scope of work also includes finding out the bottlenecks in the implementation of the program if it is extended to the northeast region.</p>
<p>The EoI also entails the assessment of solar tariffs quoted under this program as well as outside to arrive at a tariff that’s feasible in a competitive market like India.</p>
<p>Through this EoI, the MNRE wants to find a way to increase the involvement of state governments in this program. This EoI includes physical verification of at least 10% of the projects as well as the impact assessment of these projects in local areas.</p>
<p>The scope of work would also include a review and assessment of the central financial assistance (CFA) as well as the present financing mechanisms.</p>
<p>According to the eligibility criteria for bidding for the project, interested bidders should have an experience of at least five years in conducting such assignments and engaged in renewable energy activities.</p>
<p>The successful bidder should have an annual turnover of at least ₹10 million (~$0.14 million) during the last three years. Moreover, the bidder should have a sector-specific experience and in-house capability to manage the assignment, which will be an added advantage.</p>
<p>Nationally and internationally reputed organizations with adequate and specific expertise in conducting such assignments are also invited to submit their bids.</p>
<p>The review team will be required to use different methods to ensure that data gathered, and its analysis delivers evidence-based qualitative and quantitative information based on diverse sources proposed by the MNRE.</p>
<p>Interested bidders need to pay a sum of ₹200,000 (~$2,823) as the earnest money deposit (EMD).</p>
<p>Meanwhile, the present status of the 5,000 VGF program are as follows:</p>
<p>Out of the tendered capacity of 3,925 MW, 3,420 MW has been awarded, and a total of 2,120 MW of projects were commissioned as of July 16, 2019.</p>
<p>The states where these solar projects have been commissioned under the 5,000 MW VGF program are Gujarat-Solar park (Charanka), Odisha, Maharashtra, Rajasthan (Bhadla Phase-III (Saurya Urja) and Bhadla Phase-IV (Adani), Uttar Pradesh Solar Park, Kadapa Solar Park, and Pavagada Solar Park in Karnataka.</p>
<p>Previously, the ministry <a href="https://mercomindia.com/mnre-amends-2gw-solar-vgf-guidelines/" target="_blank" rel="noopener noreferrer">amended</a> for the fourth time its guidelines for the implementation of its program under which the government aims to develop 2 GW of solar projects with VGF under the third batch of the National Solar Mission (NSM) Phase-II.</p>
<p>Then earlier this year, the ministry had <a href="https://mercomindia.com/mnre-vgf-solar-northeastern-states/" target="_blank" rel="noopener noreferrer">announced</a> that it received the approval by the President of India for the implementation of a subset of the existing 5,000 MW VGF program that includes developing 1,000 MW of solar projects in the northeastern states.</p>
<p>&nbsp;</p>
<p>Image credit: EDF</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/anjana/" class="vcard author" rel="author"><span class="fn">Anjana Parikh</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><p><img class="alignleft" src="https://mercomindia.com/wp-content/uploads/2019/06/Anjana2.png" width="112" height="121" />Anjana is a news editor at Mercom India. Before joining Mercom, she held roles of senior editor, district correspondent, and sub-editor for The Times of India, Biospectrum and The Sunday Guardian. Before that, she worked at the Deccan Herald and the Asianlite as chief sub-editor and news editor. She has also contributed to The Quint, Hindustan Times, The New Indian Express, Reader’s Digest (UK edition), IndiaSe (Singapore-based magazine) and Asiaville. Anjana holds a Master’s degree in Geography from North Bengal University, and a diploma in mass communication and journalism from Guru Ghasidas University, Bhopal.</p>
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MNRE Seeks Consultants to Evaluate its 5 GW VGF Program for Solar Projects

<p>The <a href="http://remcl.in/" target="_blank" rel="noopener noreferrer">Railway Energy Management Company Limited</a> (REMCL), a joint venture of the <a href="http://www.indianrail.gov.in/enquiry/StaticPages/StaticEnquiry.jsp?StaticPage=index.html" target="_blank" rel="noopener noreferrer">Indian Railways</a> and RITES Limited, has issued a request for qualification (RfQ) to set up approximately 32.56 MW of rooftop solar photovoltaic (PV) systems at various railway establishments and stations across the zonal railways in India.</p>
<p>The last date for the submission of bids is December 9, 2019, while the bid opening date has been scheduled for December 12, 2019.</p>
<p>The bidding process will be a single stage two packet centralized process carried out by REMCL on behalf of zonal railways without any subsidy or viability gap funding (VGF) support from the <a href="https://mnre.gov.in/" target="_blank" rel="noopener noreferrer">Ministry of New and Renewable Energy</a> (MNRE) or railways.</p>
<p>This project aims to generate and supply power from rooftop solar PV systems under the public-private partnership (PPP) basis.</p>
<p>Broadly, the scope of work includes the design, engineering, procurement, erection, installation, testing, and commissioning of the solar PV systems, including operation and maintenance (O&amp;M) of the systems for a period of 25 years.</p>
<p>The prospective bidders need to pay a sum of ₹1.2 million (~$16,891.2) as the earnest money deposit (EMD).</p>
<p><a href="https://mercomindia.com/wp-content/uploads/2019/10/Zone-Wise-Distribution-of-Quantity-of-Rooftop-Capacity-Tentative.png"><img decoding="async" loading="lazy" class="aligncenter size-full wp-image-15841" src="https://mercomindia.com/wp-content/uploads/2019/10/Zone-Wise-Distribution-of-Quantity-of-Rooftop-Capacity-Tentative.png" alt="Zone Wise Distribution of Quantity of Rooftop Capacity (Tentative)" width="436" height="327" srcset="https://cms.mercomindia.com/wp-content/uploads/2019/10/Zone-Wise-Distribution-of-Quantity-of-Rooftop-Capacity-Tentative.png 436w, https://cms.mercomindia.com/wp-content/uploads/2019/10/Zone-Wise-Distribution-of-Quantity-of-Rooftop-Capacity-Tentative-300x225.png 300w" sizes="(max-width: 436px) 100vw, 436px" /></a></p>
<p>According to the tender, the bidder may be a single entity or a group of entities, coming together to implement the project.</p>
<p>As far as the technical capacity is concerned, the bidder, over the past three financial years, should have paid for or received payments of at least one solar PV grid-connected project of at least 100 kW at a single location for a minimum value of 35% of the offered capacity.</p>
<p>If the bidder has quoted for one project in any zonal railway with a capacity of 1 MW, then he must have successfully executed at least one project of not less than 35% of the quoted capacity.</p>
<p>In <a href="https://mercomindia.com/60-mw-tender-rooftop-solar-zonal-railway/" target="_blank" rel="noopener noreferrer">March 2019</a>, Mercom had reported that the REMCL had also invited bids to set up 60.17 MW of rooftop solar PV capacity on the rooftops of offices, buildings, and railway establishments across the zonal railways in India.</p>
<p>Earlier, <a href="https://mercomindia.com/indian-railways-green-with-solar-panels-more-trains/" target="_blank" rel="noopener noreferrer">Mercom</a> had reported that the Indian Railways is continuously trying to solarize the railway lines of the country. It is the single largest consumer of electricity with a roughly 2% share of the national energy consumption.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/anjana/" class="vcard author" rel="author"><span class="fn">Anjana Parikh</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><p><img class="alignleft" src="https://mercomindia.com/wp-content/uploads/2019/06/Anjana2.png" width="112" height="121" />Anjana is a news editor at Mercom India. Before joining Mercom, she held roles of senior editor, district correspondent, and sub-editor for The Times of India, Biospectrum and The Sunday Guardian. Before that, she worked at the Deccan Herald and the Asianlite as chief sub-editor and news editor. She has also contributed to The Quint, Hindustan Times, The New Indian Express, Reader’s Digest (UK edition), IndiaSe (Singapore-based magazine) and Asiaville. Anjana holds a Master’s degree in Geography from North Bengal University, and a diploma in mass communication and journalism from Guru Ghasidas University, Bhopal.</p>
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