The Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) is considering a Rs20,000 crore plan to install battery-based storage systems of 16,000 MW of power that will be generated by solar energy in a big drive towards renewable energy integration. In order to bring the ambitious project to viability, MSEDCL has proposed viability gap funding (VGF) to the central government. The storage units will be sought to preserve the excess solar energy to be used during peak demand hours of the night.
A top official of MSEDCL acknowledged that they had already forwarded the proposal to the central government that seeks subsidy.
MSEDCL is also in the process of introducing Mukhyamantri Saur Krishi Vahini Yojana 2.0, where a number of solar parks would be set up in the state to produce 16,000 MW. The deadline of the project is 2026. But MSEDCL sources added that at present, there is no such facility to store the surplus generated power at this level.
In order to store the surplus energy, MSEDCL is opting for a Battery Energy Storage System (BESS), over which MERC too has given its approval to MSEDCL. It has given a small contract to a privately owned firm. The sources at the company said that the company is currently constructing storage facilities with BESS at 75 substations of the discom.
“Excess solar power will be stored at these locations and later used during high demand. This power will be bought by MSEDCL from the firm at a lower cost.”
– the sources
The first such project is being implemented for 750 MW, for which 1,500 MWh capacity needs to be built. The company sources also said that setting up the battery unit for 1 MW costs around Rs1.25 crore and requires a 2 MWh capacity.
“So, for setting up storage units for 16,000 MW, it will cost around Rs20,000 crore. The central government provides around Rs27 lakh per MWh, while the rest needs to be raised by the firms that bag the contracts. However, we have sent the subsidy proposal, and the central government will think it over.”
– the official.
In the contract already issued, the central government has subsidized 500 MWh, and the subsidy of 1,000 MWh is yet to be subsidized. MSEDCL, however, has intentions of implementing it on a large scale, and thus, they have forwarded the plan to the central government.
“If the subsidy is secured, then tenders will be floated, and different companies can bid for it. The firms will be provided a subsidy, and to recover the remaining money, they will sell the power to MSEDCL, which too will benefit because of the low cost of power.”
– MSEDCL sources.
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