MSEDCL Issues 2 GW/4 GWh BESS Tender With VGF Under Global Bidding

Maharashtra State Electricity Distribution Co (MSEDCL) has issued a 2 GW/ 4 GWh global competitive bidding tender for a standalone battery energy storage system (BESS) under the new VGF scheme. This latest tender is the third under the scheme, with already 10 GWh of the 30 issued. The other two tenders under the scheme have previously been issued first by Rajasthan and then by Gujarat. MSEDCL's latest tender has sought bids under global competitive bidding until September 15, 2025, as the last date for submission of technical and financial bids.

One of the first such tenders under the new Viability Gap Funding (VGF) regime was earlier issued by a power-generating company (Genco) in Rajasthan for a 1 GW battery energy storage system (BESS) project. Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RVUNL) invited bids for a 1,000 MW/2,000 MWh standalone BESS project with VGF support. In parallel, Gujarat Urja Vikas Nigam Ltd (GUVNL) also floated a 2 GW/4 GWh standalone BESS tender under the new VGF regime. The tender, part of Phase 7, is issued under the Build, Own, Operate (BOO) model with a contract tenor of 12 years.

The latest tender aligns with MSEDCL’s plans to deploy round-the-clock clean energy using battery-based storage systems worth ₹20,000 crore under the ongoing Mukhyamantri Saur Krishi Vahini Yojana 2.0. In this context, the tender supports Maharashtra’s goal to meet its 2026 renewable energy target. With this move, MSEDCL is turning to a large-scale Battery Energy Storage System (BESS) network to enhance renewable energy generation and utilisation across the state.

Scope Of Work

The Maharashtra State Electricity Distribution Company Limited (MSEDCL) has issued a tender inviting Battery Energy Storage System Developers (BESSDs) to set up energy storage projects under a Build-Own-Operate (BOO) model to supply "on-demand" power. Under the tender, MSEDCL proposes to install BESS capacity across multiple locations near MSEDCL or MSETCL substations. It will provide land for such installations on a Right-of-Use (RoU) basis, at a nominal lease rental of ₹1 per plot per year.

MSEDCL offers developers holding a valid Power Purchase Agreement (PPA) with MSEDCL for intra-state renewable energy projects, along with co-located BESS facilities. The tender clarified that, in such cases, the responsibility for land acquisition and site development will lie solely with the BESSD. The maximum allowable BESS capacity for co-located projects will be limited to the contracted solar capacity at the respective location.

Additionally, MSEDCL set 100 MW/200 MWh as the minimum bid size for the tender. MSEDCL will account for Round Trip Efficiency (RtE) while calculating charging energy, measured AC-to-AC for standalone projects and DC-to-AC for co-located, DC-coupled projects.

MSEDCL mandates the BESSD to guarantee a minimum round-trip efficiency of 85% (AC to AC) monthly and a system availability of 95% on an annual basis. Additionally, the Monthly Average Availability will be calculated for each month, and the annual average derived from monthly values where availability is 95% or below. Whereas in the case of Shortfalls in the system, the tender clarified that liquidated damages, calculated at twice the capacity charges for the unavailable capacity, would be payable by the BESSD.  Moreover, the tender sets the 18 months as the Scheduled Commissioning Date (SCD) for the full capacity from the Effective Date of the Battery Energy Storage Purchase Agreement (BESPA). 

Under the tender, the selected developers will be eligible for financial assistance under the Viability Gap Funding (VGF) scheme, with support of up to ₹18 lakh per MWh, as per the Ministry of Power’s guidelines dated June 9, 2025. The scheme is backed by the Power System Development Fund (PSDF) to promote large-scale BESS deployment.