Ministry of Power Allows States to Develop Standalone BESS with 4-Hour 1-Cycle Configuration
The Ministry of Power has revised its guidelines to allow states to set up standalone battery energy storage system (BESS) projects under viability gap funding with flexible two-hour or four-hour configurations, aiming to enhance grid flexibility and renewable integration.
October 03, 2025. By Mrinmoy Dey
“The states may implement the BESS project in 2-hour/4-hour configurations while retaining the contractual right to utilise at least 6,300 cycles of the BESS during the contract period,” the Ministry said in a notification.
This flexibility follows requests from Bihar, Odisha, Chhattisgarh, Rajasthan, and Kerala seeking deviation from the original guidelines for the implementation of BESS under the VGF scheme on storage duration and number of cycle operation per day.
Industry experts expressed that a four-hour, single-cycle operation is often more practical than a two-hour, two-cycle model. Taking advantage of the relaxation, the Rajasthan Rajya Vidyut Utpadan Nigam has invited bids for a 500 MW/2,000 MWh standalone BESS with a four-hour, one-cycle configuration, stated Ajitabh Sharma, Principal Secretary (Energy), Government of Rajasthan, in a social media post.
Rajasthan currently has 4,000 MWh under development following a 2-hour, 2-cycle design, while the government has proposed an additional 2,000 MWh based on a 4-hour single-cycle configuration. “This is the final lot of our current plan of setting up 6,000 MWh of BESS in Rajasthan. More to come as generation, grid, ancillary services, and market assets — under planning as of now,” added Sharma.
Debmalya Sen, President, India Energy Storage Alliance (IESA) commented, “This will bring relief to a lot of projects. Four-hour, one-cycle operation is much more viable than 2-hour 2-cycle. A lot of the second cycle remain underutilised depending upon the seasonal load profile of the state. The 4-hour, 1-cycle gives flexibility to the DISCOM to use the battery as and when required by using partial cycles or broken down discharge of the four hours in multiple stages.”
Kartik Seth, Managing Partner, Chambers of Kartik Seth opined, “The 4-hour single-cycle relaxation is a pragmatic move that enhances asset longevity and commercial viability. It will strengthen grid flexibility, bolster ancillary services, and enable deeper renewable integration.”
In June 2025, the Ministry of Power approved the second tranche of the Viability Gap Funding (VGF) scheme with financial support of INR 5,400 crore to support the development of 30 GWh of Battery Energy Storage System (BESS) capacity across 15 states and NTPC.
The scheme offers VGF at INR 18 lakh/MWh and aims to enhance the integration of renewable energy into the grid while supporting a reliable and flexible electricity supply.
Of the total 30 GWh capacity, 25 GWh has been earmarked for 15 states and 5 GWh for NTPC. Key allocations include 4,000 MWh each to Rajasthan, Gujarat, and Maharashtra; 2,000 MWh each to Karnataka and Andhra Pradesh; and 1,500 MWh to Tamil Nadu, Madhya Pradesh, Telangana, and Uttar Pradesh. Smaller allocations of 500 MWh have been made to Haryana, Kerala, Punjab, Chhattisgarh, Odisha, and Uttarakhand.
The Ministry also mandated indigenous EMS software and prohibited refurbished battery cells to ensure higher quality standards.
According to the Central Electricity Authority (CEA), India will require 37 GWh of BESS by 2027 and 236 GWh by 2031-32. While 13.2 GWh has already been approved under the first tranche of the VGF scheme, this new allocation significantly boosts the country’s battery storage roadmap.
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