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The Power Ministry has introduced a draft proposal for a single-stage, two-part bidding process to procure storage capacity from pumped storage projects (PSPs). The proposed process includes both technical and financial bidding stages, aiming to streamline the procurement of energy storage from these projects.
Earlier this week, the Ministry released draft tariff-based competitive bidding (TBCB) guidelines for PSPs, inviting feedback from stakeholders by the first week of September 2024.
The Ministry emphasized the importance of energy storage systems (ESS) in addressing the variability of renewable energy (RE), which fluctuates due to factors like time, climate, season, and location. Renewable sources such as solar, wind, and run-of-the-river hydro are not consistently available, creating challenges in maintaining grid stability. ESS helps by storing surplus energy and releasing it when needed, thus enhancing grid stability, facilitating peak shifting, and improving the integration of renewable energy.
The Ministry has already issued guidelines for procuring and utilizing Battery Energy Storage Systems (BESS). According to the National Electricity Plan 2023, India will require approximately 74 gigawatts (GW) or 411 GW hours (GWh) of ESS by FY32, with 27 GW/175 GWh expected from PSPs and 47 GW/236 GWh from BESS.
The Ministrys draft guidelines outline two procurement modes for PSP storage capacity. In the first mode, the project can be located at a pre-specified site in the bidding documents. If the site is government-owned, the project will be developed on a Build Own Operate Transfer (BOOT) basis for a term of 25 to 40 years, after which it will be transferred to a state-identified entity.
In the second mode, storage capacity can be supplied from a PSP developed at a site chosen by the bidder or from an existing PSP. This option allows for development on a Finance Own Operate (FOO) basis for 15 to 25 years.
For Inter-State Transmission System (ISTS) connected projects, the draft guidelines stipulate a minimum bid capacity of 50 megawatts (MW). For Intra-State Transmission System (InSTS) connected projects, the minimum bid capacity is set at 10 MW, with allowances for smaller capacities in special cases such as North-Eastern States, Special Category States, and other InSTS-connected projects, depending on land and transmission availability. |
