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The cost of battery energy storage system (BESS) is anticipated to be in the range of ₹2.20-2.40 crore per megawatt-hour (MWh) during 2023-26 for the development of the BESS capacity of 4,000 MWh, Parliament was informed on Thursday.
“The cost of BESS system is anticipated to be in the range of ₹2.40 to ₹2.20 crore per MWh during the period 2023-26 for development of BESS capacity of 4,000 MWh, which translates into capital cost of ₹9,400 crore with a budget support of ₹3,760 crore,” Power Minister R K Singh said in a written response to a query in Lok sabha.
The Union Cabinet on September 6 this year approved the scheme for Viability Gap Funding (VGF) for development of BESS with a capacity of 4,000 MWh. Under the scheme, projects will be approved during a period of 3 years (FY24 to FY26). The disbursement of funds will extend up to FY31 in 5 tranches, he added.
Energy storage
The VGF to the extent of up to 40 per cent of the capital cost for BESS will be provided by the Centre. Public and private sector entities will be selected for development of BESS through the bidding process to be conducted by the implementing agencies as per provisions, the Minister said.
The implementation of 4,000 MWh capacity is expected to result in an annual reduction of around 1.3 million tonnes (MT) of carbon emissions (CO2) considering charging of BESS with renewable energy (RE).
This will make up to 4,000 MWh of energy available during peak hours for Discoms and other beneficiaries to utilize, depending on their specific usage patterns, Singh explained.
Utility of BESS
India’s energy mix is set to undergo a transition from fossil fuel sources to non-fossil fuel based sources dominated by RE in the future. However, solar and wind energy are not available round the clock.
To facilitate transition from fossil fuel-based sources to RE sources, it is crucial to make RE dispatchable and available round the clock. Energy Storage Systems (ESS) play a key role in achieving this objective by storing energy generated from RE sources when it is available for use when the sun is not shining or the wind is not blowing.
They also help in addressing RE variability, enhancing grid stability, facilitating energy/peak shifting, providing ancillary support services and fostering greater integration of RE.
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