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Ministry of Power Releases VGF Guidelines for Development of BESS
Under the scheme, projects must be commissioned within 24 months from the signing of the Battery Energy Storage Purchase Agreement (BESPA).
March 22, 2024. By Abha Rustagi
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The Ministry of Power has issued guidelines for the 'Viability Gap Funding (VGF) for Development of Battery Energy Storage Systems (BESS)' scheme.
The scheme aims to enhance BESS capacity by 4,000 MWh over a three-year period, from 2023-24 to 2025-26, with disbursements extending up to 2030-31.
Under the scheme, projects must be commissioned within 24 months from the signing of the Battery Energy Storage Purchase Agreement (BESPA). The proposed outlay stands at INR 9,400 crores, with budgetary support of INR 3,760 crores.
Disbursements of VGF amounts to eligible projects will occur in five tranches, tied to specific milestones such as financial closure and completion of operational years. Initially, up to 40 percent of the capital cost for BESS will be provided by the Central Government in the first tranche.
The BESS projects under the scheme will fulfill system requirements by addressing grid needs during periods of high demand and stress. The National Load Dispatch Center (NLDC) will pre-declare stress hours on a quarter-ahead basis, typically during evening and morning peak hours, with updates provided on a week-ahead basis.
Responsibility for securing the discharge of power from BESS during pre-declared high-demand and stress hours lies with the Battery Interface Agency (BIA). Failure to discharge power during specified hours by the BESS developer will result in penalties, as per BESS TBCB guidelines. Additionally, the BIA will secure charging power for BESS projects through fixed-term contracts with renewable energy sources, supplemented by market purchases.
The scheme aims to enhance BESS capacity by 4,000 MWh over a three-year period, from 2023-24 to 2025-26, with disbursements extending up to 2030-31.
Under the scheme, projects must be commissioned within 24 months from the signing of the Battery Energy Storage Purchase Agreement (BESPA). The proposed outlay stands at INR 9,400 crores, with budgetary support of INR 3,760 crores.
Disbursements of VGF amounts to eligible projects will occur in five tranches, tied to specific milestones such as financial closure and completion of operational years. Initially, up to 40 percent of the capital cost for BESS will be provided by the Central Government in the first tranche.
The BESS projects under the scheme will fulfill system requirements by addressing grid needs during periods of high demand and stress. The National Load Dispatch Center (NLDC) will pre-declare stress hours on a quarter-ahead basis, typically during evening and morning peak hours, with updates provided on a week-ahead basis.
Responsibility for securing the discharge of power from BESS during pre-declared high-demand and stress hours lies with the Battery Interface Agency (BIA). Failure to discharge power during specified hours by the BESS developer will result in penalties, as per BESS TBCB guidelines. Additionally, the BIA will secure charging power for BESS projects through fixed-term contracts with renewable energy sources, supplemented by market purchases.
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