RVUNL Storage Tender Attracts Bids At Rs 2.21/kWh, A New Low

Energy storage tenders continued their steep decline from last year, as RVUNL's 500 MW/ 1000 MWh standalone BESS tender, which comes with a 30% VGF support, attracting bids at Rs 2.21 lakhs /MWh.   Solar World Energy led with the lowest bid and an award of 125 MW/250 MWh, while Oriana Power won 50MW/100 MWh with a bid of Rs 2.22. Rays Power experts bid at Rs 2.23 for an award of 75MW/150MWh, with the largest component pocketed JSW Neo Energy with a bid at Rs 2.24 for 250 MW/500MWh.

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Even with the VGF, these are extremely attractive prices, which will be a cause for much cheer, and some worry. Worry, simply because it might raise questions on the fate of some of the previous tenders of 4.6 GWh capacity awarded till date. Readers will recall that JSW Neo Energy has just decided to appeal its own case where it won an award at Rs 10.81/kWh back in 2022, which has been disallowed by CERC when it came to tariff adoption on the grounds of delays and drop in prices.

Among other changes, this particular tender had also removed the tariff ceiling and reduced the need for round trip efficiency from 90% to 85%. A slew of other changes like reduction in financial penalties and charges like EMD etc had also been reduced.

This particular tender has an additional greenshoe option of 500 MW/ 1000 MWh without VGF funding, which will be discussed with the winners. At this rate, there seems a good chance of that closing at around Rs 3/unit, again, a very attractive rate.

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The total awarded capacity for standalone BESS stands at 4.6 GWh with 0.5 GWh capacity under construction and 3.7 GWh under open tendering process. India's delay on moving forward with storage tenders seems to have been fortuitous in many ways, considering the steep decline seen since 2023. While cases like JSW Neo Energy's are unfortunate, one will hope those serve as aberrations to ensure execution moves ahead fast as well.