Tantransco Secures Approval to Lease Substation Land for Battery Storage Projects

Speedy Summary

• Tamil Nadu Transmission Corporation Ltd (Tantransco) received approval from the state power regulator for leasing substation land at ₹1 per project per year to establish battery energy storage systems (BESS).
• The Union Power Ministry allocated 1000 Megawatt-hour (MWh) of BESS capacity to Tamil Nadu under the State Viability Gap Funding (VGF) scheme, with Tamil Nadu Green Energy Corporation proposing a standalone capacity of 500 MW/1000 MWh.
• Tantransco plans to implement 1000 MWh BESS projects at six substations under a “Build Own Operate” model for a lease period of up to 15 years.
• Viability Gap Funding will cover up to 30% of capital costs or ₹27 lakh per MWh, whichever is lower.
• Only surplus land that does not interfere with licensed transmission activities will be used for the projects.
• Revenue from thes projects is expected to benefit consumers and system users rather than generating direct revenue for Tantransco.
• BESS systems are considered crucial for integrating renewable energy into grids due to their faster deployment compared to Pumped Storage Systems (PSP).
• TNERC directed Tantransco to study grid connectivity, assess technical feasibility, and document clear terms in lease agreements regarding land return after the lease period.

Indian Opinion Analysis

The approval and funding allocation reflect notable progress toward modernizing Tamil Nadu’s electricity infrastructure.By focusing on battery energy storage systems (BESS), the state aligns itself with global trends in renewable energy integration.This decision has logical merit as BESS can play an instrumental role in managing grid fluctuations caused by inconsistencies in renewable power supply.

Operational details,such as leasing public utility land at negligible rates and central government support via viability gap funding,suggest efforts aimed at lowering financial barriers while fostering technological advancement. The allocation prioritizes consumers’ benefits over immediate profit generation – demonstrating long-term thinking geared toward sustainability.

Though, proper execution requires meticulous planning; so TNERC’s insistence on technical studies and binding agreements ensures accountability. If implemented effectively within timelines, this initiative could serve as a model nationwide for leveraging surplus resources without disrupting core transmission services.

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