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MPPMCL Floats Tender for 625 MW/1,250 MWh Battery Energy Storage Projects in Madhya Pradesh

MP Power Management Company Limited (MPPMCL) has invited bids for the development of 625 MW/1,250 MWh of standalone Battery Energy Storage System (BESS) capacity in Madhya Pradesh, marking another significant step in strengthening the state's electricity infrastructure and supporting the integration of renewable energy into the power grid. The projects will be awarded under the Build, Own and Operate (BOO) model, with bid submissions scheduled to close on July 30, 2026.

The tender covers three standalone battery storage projects comprising two systems of 250 MW/500 MWh each and one system of 125 MW/250 MWh. The facilities will be connected to the Birsinghpur (Pali), Bina and Sendhwa substations of the State Transmission Utility (STU), enabling stored electricity to be dispatched during periods of high demand and improving grid flexibility.

To enhance project viability, the selected developers will be eligible for Viability Gap Funding (VGF) of up to Rs 18 lakh per MWh, in line with the Central Government's battery energy storage support programme. The VGF scheme is intended to accelerate large-scale deployment of energy storage systems, making battery projects more financially attractive while facilitating greater integration of renewable energy sources such as solar and wind.

Under the tender conditions, developers will establish the battery storage facilities and make them available to MPPMCL for scheduled charging and discharging operations. The Battery Energy Storage System Developer (BESSD) will charge the batteries using electricity supplied by MPPMCL through the STU interconnection point and discharge the stored energy back into the transmission network whenever instructed, helping manage peak demand and improve grid reliability.

The tender specifies that each battery system must provide a minimum discharge duration of two hours at rated capacity, with the capability to complete two charge-discharge cycles per day. However, MPPMCL will have the flexibility to schedule multiple discharge sessions during a cycle when the battery is operated below its rated output, allowing the storage systems to respond more effectively to changing grid conditions.

To ensure operational reliability, developers must guarantee a minimum annual system availability of 95 percent. The successful bidders will also be required to use only new battery cells, as refurbished cells are prohibited under the tender. In addition, the Energy Management System (EMS) software must be developed within India, and the overall project must achieve a minimum domestic content of 20 percent of the total project cost, including the EMS. These provisions support the government's broader efforts to strengthen domestic manufacturing and promote indigenous technology development in the energy storage sector.

The responsibility for identifying suitable land, securing leases or acquisitions, and obtaining all statutory approvals will rest entirely with the successful developer. This approach places greater emphasis on project readiness and timely execution while allowing developers flexibility in site selection.

MPPMCL has also prescribed detailed financial eligibility requirements to ensure that participating bidders possess adequate technical and financial capability. Applicants must have a minimum net worth of Rs 44 lakh per MW as of the end of the 2024-25 financial year or at least seven days before the bid submission deadline. Additionally, bidders must satisfy at least one financial criterion, including an annual turnover of Rs 21.34 lakh per MW, a Profit Before Depreciation, Interest and Taxes (PBDIT) of at least Rs 4.27 lakh per MW, or an in-principle credit sanction from a financial institution providing a working capital line of at least Rs 5.35 lakh per MW.

As part of the bidding process, interested developers are required to pay a tender document fee of Rs 29,500, a bid processing fee of Rs 15 lakh plus applicable GST, and furnish an Earnest Money Deposit (EMD) of Rs 2.20 lakh per MW. Successful bidders must also submit a Performance Bank Guarantee (PBG) of Rs 11 lakh per MW before signing the Battery Energy Storage Purchase Agreement (BESPA). Techno-commercial bids are scheduled to be opened on August 4, 2026.

Battery energy storage systems are becoming increasingly important in India's evolving power sector as renewable energy capacity continues to expand. Unlike conventional power plants, BESS projects can rapidly store excess electricity generated during periods of high solar or wind output and release it during peak demand, helping improve grid stability, reduce renewable energy curtailment and enhance overall power system reliability.

The latest tender reflects Madhya Pradesh's continued focus on modernizing its electricity infrastructure and aligns with the Government of India's broader objective of expanding battery storage capacity to support the country's clean energy transition. As renewable generation grows, large-scale energy storage is expected to play a vital role in ensuring a stable, flexible and resilient electricity network.