Tamil Nadu Unveils New Three-Year Policy to Boost Battery Energy Storage Systems

The Tamil Nadu government has released a new three-year policy for Battery Energy Storage Systems aimed at building 2.5 GW and 10 GWh of storage capacity across the state. Under the guidelines, existing solar and wind power projects of one megawatt and above are encouraged to set up storage systems to help manage peak electricity demand and support the power grid.

Project Rules

New solar or solar-hybrid power projects of one megawatt and above that apply after the policy notification or start operating on or after April 1, 2027, must install storage capacity equal to at least 10 percent of their total solar power. Both standalone and co-located storage projects will receive a full waiver on transmission and wheeling charges. The Tamil Nadu Power Distribution Corporation will buy storage capacity totaling 2,500 megawatts and 10,000 megawatt-hours from eligible projects in the first phase.

Agencies Involved

To manage the rollout, the Tamil Nadu Green Energy Corporation Limited will serve as the state nodal agency to coordinate and monitor projects through a single window system. The state currently has 29.8 gigawatts of total renewable energy capacity, which includes 14.5 gigawatts of solar power and 11.6 gigawatts of wind power. Tamil Nadu is also working on four separate storage projects, including two larger facilities backed by viability gap funding and two solar-storage combination projects.

Context

Battery storage systems store excess electricity generated from wind and solar farms during peak production hours so it can be supplied back to the power grid when demand is high. This technology helps states manage the natural ups and downs of renewable energy sources to keep power supplies steady and reliable for consumers.