In a significant move to enhance grid reliability and support renewable energy integration, Uttar Pradesh Power Corporation Ltd. (UPPCL) has approached the Uttar Pradesh Electricity Regulatory Commission for approval of a large-scale battery energy storage project in the state.
The proposal involves the procurement of 375 MW / 1500 MWh capacity through standalone Battery Energy Storage Systems (BESS), which will be connected to the state’s transmission network. The initiative is aimed at addressing the intermittency of renewable energy sources such as solar and wind by enabling storage of excess power during low-demand periods and dispatching it during peak demand.
The project aligns with India’s broader clean energy targets, including achieving 500 GW of non-fossil fuel capacity by 2030. By investing in large-scale storage infrastructure, UPPCL aims to facilitate higher renewable energy penetration while maintaining grid stability.
To support project viability, the initiative will receive financial assistance through Viability Gap Funding (VGF) from the Ministry of Power under the Power System Development Fund. UPPCL has proposed certain modifications to standard bidding guidelines, including a six-month timeline for financial closure, to align with VGF requirements.
In terms of participation, the utility has restricted bidding eligibility to companies and consortia, excluding Alternative Investment Funds (AIFs), citing concerns over their shorter fund tenures compared to the long-term nature of infrastructure projects.
The project will be implemented under a Build-Own-Operate (BOO) model, wherein UPPCL will procure only the discharged energy, while developers will be responsible for sourcing charging power. The system is expected to maintain a monthly availability of 95% and deliver one full four-hour discharge cycle daily.
Additionally, the tender mandates a minimum of 20% domestic content in the overall project cost, including locally developed software, to promote indigenous manufacturing in the energy storage sector.
The agreement will be governed by a Battery Energy Discharge Purchase Agreement (BEDPA), with UPPCL proposing a revised payment security mechanism through a weekly revolving Letter of Credit instead of the conventional multi-month reserve structure.
The project is expected to play a crucial role in optimising peak power costs and ensuring a stable and reliable electricity supply as Uttar Pradesh advances towards a cleaner and more resilient energy system.
