RERC Approves Tariff for 1000 MWh Battery Storage Project

The Rajasthan Electricity Regulatory Commission (RERC) today formally adopted tariffs for India’s largest grid-scale battery storage initiative, approving capacity charges of INR 2.21–2.24 lakh per MW/month for 500 MW/1000 MWh systems.

It may be noted that the decision comes after the petition was filed by the Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RRVUNL), seeking approval for the adoption of tariff (capacity charges) discovered through a global competitive bidding process.

The petition pertains to the development of a 500 MW/1000 MWh standalone Battery Energy Storage System (BESS) under the Tariff-Based Competitive Bidding framework, to be established at RRVUNL’s power plant premises and RVPNL grid substations. An additional greenshoe option of up to 500 MW/1000 MWh is also included, with Viability Gap Funding (VGF) support, under the Build-Own-Operate (BOO) model.

Four developers secured 12-year contracts through a competitive reverse auction involving 11 initial bidders. Solarworld Energy Solutions won 125 MW at INR 2.21 lakh for RVPN substations, Oriana Power 50 MW at INR 2.22 lakh for RVPN sites, Rays Power Experts 75 MW at INR 2.21 lakh for Heerapura GSS (Jaipur), and JSW Neo Energy 250 MW at INR 2.24 lakh at RRVUNL’s Giral and Suratgarh thermal plants. An identical 500 MW/1000 MWh green shoe option remains available.

RERC validated the tariff’s competitiveness, noting it aligns with recent projects in Gujarat (INR 2.26 lakh) and Maharashtra (INR 2.19 lakh). The project qualifies for 30 percent Viability Gap Funding from the Ministry of Power, whose October 2024 guidelines mandated RRVUNL as implementing agency.

The significant operational advantages were confirmed viz. discoms will save up to INR 1 crore daily by replacing peak-market power (INR 6–10/unit) with stored renewable energy (delivered at INR 4.57–5.07/unit), while fulfilling Rajasthan’s 2025 Energy Storage Obligation of 2 percent.

The Commission imposed strict conditions, demanding RRVUNL reduce its controversial INR 0.07/unit trading margin to ease consumer burden. Future locations must be chosen through RVPN’s load-flow studies to optimise grid relief, particularly at congested nodes like Bikaner GSS. Developers were directed to explore AI-enhanced battery technologies for safety improvements, while RRVUNL must submit quarterly construction reports and publicly disclose signed Battery Energy Storage Purchase Agreements (BESPA) within 30 days.

The Commission emphasised the project’s role in preventing renewable curtailment and stabilising the grid during thermal plant retirements. "This positions Rajasthan as India’s energy storage leader," stated the order, noting the systems will provide critical support during the phased closure of Kota Thermal Power Station’s older units.