The Tamil Nadu Electricity Regulatory Commission (TNERC) has adopted tariffs of ₹315,000 (~$3,459)/MW/month and ₹316,000 (~$3,470)/MW/month for 375 MW/1,500 MWh battery energy storage system (BESS) projects.

The Commission also approved amendments to the tender process, project allocations, and execution of battery energy storage purchase agreements (BESPA), citing projected system savings of ₹47.3 billion (~$519.48 million) over 15 years.

The regulator ratified amendments issued by the Tamil Nadu Green Energy Corporation (TNGECL), including an exemption from the earnest money deposit for eligible micro, small, and medium enterprises (MSMEs), an expansion of project locations from seven to eleven substations, and other corrigenda issued during the bidding process.

The Commission permitted TNGECL to issue letters of award and execute BESPAs at the adopted tariffs and directed Tamil Nadu Power Distribution Corporation (TNPDCL) to ensure the storage capacity is used strictly for grid support, peak demand management, and regulatory compliance.

Background

The petition was jointly filed by TNGECL and TNPDCL.

TNGECL floated tenders to set up seven standalone storage units with a cumulative capacity of 375 MW/1,500 MWh, with four-hour discharge capability and 1.5 cycles per day. Initially planned across seven substations, the number was increased to 11 due to land and space constraints.

The auction discovered tariffs of ₹315,000 (~$3,459)/MW/month, ₹316,000 (~$3,470)/MW/month, and ₹325,000 (~$3,569)/MW/month. The third highest bidder later matched the lowest tariff in accordance with tender rules requiring selected bidders to be within 2% of the lowest bid.

The Commission had earlier directed minimum round-trip efficiency of 85% AC-to-AC, separate auxiliary load connections, and filing of a tariff adoption petition after bid completion.

Nine corrigenda were issued between November 2025 and January 2026, covering pre-bid clarifications, eligibility criteria, consortium provisions, MSME exemptions, bid submission extensions, revised project locations, and a minimum local content requirement of 20%, including indigenously developed energy management systems.

Commission’s Analysis

The Commission concluded that the bidding process complied with the Ministry of Power’s guidelines and ensured competitive tariff discovery through a reverse auction.

It noted that the tariffs of ₹315,000 (~$3,459) and ₹316,000 (~$3,470)/MW/month were lower than comparable procurement by Uttar Pradesh Power Corporation, which discovered tariffs of ₹359,000 (~$3,942)/MW/month despite viability gap funding support.

The Commission also found that the storage systems would supply approximately 45 million kWh/month, resulting in an effective peak power cost of ₹6.16 (~$0.067)/kWh compared to prevailing peak market rates of ₹10 (~$0.109)/kWh, generating savings of ₹3.84 (~$0.042)/kWh.

This translates into annual savings of ₹3.15 billion (~$34.59 million) and total savings of ₹47.3 billion (~$519.48 million) over the 15-year contract period.

The Commission noted that the BESS projects would provide four-hour peak support, enable peak load management, reduce renewable energy curtailment, and improve grid stability and congestion management.

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