APERC Approves 1,000 MWh BESS Capacity: ACME Solar and Patel Infrastructure Secure Bids at Tariffs of ₹2.08–2.22 Lakh/MW/Month

Regulatory Approval and Pricing Benchmarks

In a landmark move for India’s energy storage landscape, the Andhra Pradesh Electricity Regulatory Commission (APERC) has formally approved the tripartite Battery Energy Storage Purchase Agreements (BESPAs) for 1,000 MWh (500 MW x 2 hours) of standalone capacity. Awarded under the NHPC Tranche-II BESS auction, the project establishes a significant pricing benchmark with an L1 tariff of ₹2.08 lakh/MW/month.

The initiative involves NHPC Limited acting as the Battery Energy Storage Implementing Agency (BIA), facilitating the contractual framework between selected developers and the state’s buying entities, the Andhra Pradesh Power Distribution Companies (APDISCOMs), with the state nodal agency APTRANSCO managing grid integration.

Project Framework and Technical Specifications

The capacity was awarded through a Tariff Based Competitive Bidding (TBCB) process on a Build-Own-Operate (BOO) basis. To ensure the project meets the state’s stringent grid-balancing requirements, the following technical and performance mandates have been established:

• Contractual Term: 12-year long-term storage agreement.
• Connectivity: Intra-State Transmission System (InSTS) connected standalone BESS.
• Storage Depth: 2-hour discharge depth per cycle.
• Operational Cycle: Mandatory two full charging/discharging cycles daily to mitigate morning and evening peak demand.
• Availability Metric: Minimum 95% monthly system availability.
• Efficiency Standard: Minimum 85% monthly AC-to-AC round-trip efficiency.
• Commissioning: Projects must be operational within 18 months of BESPA execution.

Viability Gap Funding (VGF) Mechanism

To mitigate the high capital expenditure associated with utility-scale storage, the projects are supported by the CPSU Component under the Scheme for Viability Gap Funding.

• Support Ceiling: Eligible developers will receive VGF of ₹27 lakh/MWh or 30% of the project’s capital cost, whichever is lower.
• Financial Rationale: This Central Financial Assistance is designed to bridge the gap between high technology costs and the off-take requirements of state DISCOMs, ensuring the discovered tariffs remain commercially sustainable.

Auction Results: Developer Allocations and Discovered Tariffs

The Tranche-II auction saw aggressive bidding, particularly at the Jammalamadugu and Kuppam substations. Patel Infrastructure emerged as the L1 bidder for the largest single-site allocation.

Commercial Structure and Intermediary Nodal Roles

The project utilizes a tripartite agreement structure involving the BESS Developer (BESSD), NHPC (as the BIA), and the APDISCOMs (as the Buying Entities).

• Offtake Guarantee: APDISCOMs have committed to 100% of the awarded capacity to ensure grid reliability.
• NHPC Trading Margin: As the intermediary agency, NHPC’s trading margin is capped at 0.5% of the capacity charges.
• Charging Power: The responsibility for providing power to charge the BESS resides with the Buying Entities (APDISCOMs).

Regulatory Review: Stakeholder Scrutiny vs. Commission Rationale

During the hybrid public hearing, APERC addressed critical concerns regarding the long-term economic viability of the BESPAs in a rapidly evolving technological market.

Strategic Grid Context

This 1,000 MWh deployment is a cornerstone of Andhra Pradesh’s strategy to integrate 160 GW of renewable capacity. By connecting these assets to the Intra-State Transmission System (InSTS), the state moves closer to its target of 25 GWh of battery storage by 2029-30. The project serves as a critical proof-of-concept for standalone BESS as a commercially viable alternative to traditional fossil-fuel peaking plants in the Indian grid.