MC Exclusive: NTPC to invite bids for 9 GWh of energy storage systems

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NTPC is planning to invite bids for 9 gigawatt hour (GWh) of energy storage systems, senior officials of the state-run power generator told Moneycontrol on March 10.

Once the tender is floated, this will be the largest bid for energy storage systems in India, surpassing NTPC's own previous tender of 3 GWh.

In March 2022, NTPC, through its subsidiary NTPC Renewable Energy Ltd, invited bids for 3 GWh (3,000 MWh) energy storage systems.

“We are almost on the verge of closing the 3GWh tender as everything has been finalised in that. Work will be awarded soon. Now, we are going bigger in the energy storage space by three times. NTPC will soon float a technology agnostic tender for 9 GWh of energy storage systems, which will again be the biggest one in India so far and probably in the world,” said a senior NTPC official requesting anonymity.

A second NTPC official also confirmed the same and added that they aim to float the tender either this month or in April. "However, it is yet to be decided whether it will be through NTPC or its subsidiaries NTPC Renewable Energy Ltd or NTPC Green Energy Ltd because it will depend on the power purchase agreements (PPAs) that are signed. Our requirement is pretty large, which is why we will be allowing even smaller bids to tune of 100 MWh so that even if there are those interested in setting up battery energy storage systems can bid. We are not saying that the entire capacity will be given to one type," the second senior official said requesting anonymity.

As India scales up its renewable energy capacity, battery storage systems are gaining importance as a solution to reduce the intermittency of renewable energy projects to provide continuous power. India aims to add 500 GW of renewable energy capacity by 2030. In July 2022, the government also added an Energy Storage Obligation to its existing Renewable Purchase Obligation policy for the first time.

In the 3 GWh tender, which was the world’s first and largest technology agnostic storage tender in 2022, Hyderabad-based Greenko Group emerged as the lowest bidder in December last year. Greenko is backed by GIC Holdings Pte Ltd, Abu Dhabi Investment Authority and Japan’s ORIX Corp.

Greenko was the lowest bidder for 3,000 MWh tender, competing with Italy’s Enel Group Indian arm Enel Green Power (EGP), JSW Neo Energy Ltd, Hinduja Renewables Energy Private Ltd, HES Infra Pvt Ltd, and India Grid Trust (IndiGrid). Greenko’s lowest bid was for Rs 5 per kWh on a single cycle per day basis, with effective storage charges expected to be far lower than Rs 2.5 per kWh. Bid values were as high as 216 percent, made by Hinduja Renewables Energy Pvt Ltd and as low as 0 percent and 12.50 percent made by Greenko Group.

Greenko is going to build energy storage systems through the pumped storage technology and not the battery storage mechanism. It stated that pumped hydro storage projects (PSPs) are the lowest cost long duration energy storage solution at the moment. "The winning bid translates into unit storage charges of $58/MWh on a single cycle per day basis, as compared to the storage charges discovered in another recent tender based on battery energy storage systems by SECI, which was $120/MWh. Taking in account the fact that PSP can deliver more than one cycle per day without any impact on the performance, effective storage charges can be significantly lower ($29/MWh)," the company said while announcing the details of its winning bid in December last year.

Last month (February 2023), India released its long-awaited draft guidelines for setting up pumped storage plants (PSPs) in the country and exempted off-river plants from having to conduct environmental impact assessments (EIA), which was mandatory until now.

Pumped storage hydropower plants act like giant batteries and are essential for the storage of renewable solar and wind energy that are mired with problems of intermittency. Such plants use two water reservoirs at different elevations. Water is moved from the upper reservoir to the lower one through a turbine which generates electricity. The system also requires electricity as it pumps the water back into the upper reservoir. Solar and wind energy are used for this. PSPs have a longer operational life of 50-60 years compared to a battery energy storage system.

At the same time, battery energy storage systems are more effective for immediate spot power balancing needs.