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Setback for SECI's First Standalone 1,000 MWh Battery Energy Storage System (BESS) Tender

The Central Electricity Regulatory Commission (CERC) has refused to adopt the tariff of ?10,83,500/MW discovered in SECI's first 500 MW/1,000 MWh Standalone Battery Energy Storage System (BESS) tender under Tariff-Based Global Competitive Bidding (ESS-I).

CERC emphasized its authority to evaluate whether discovered tariffs align with prevailing market conditions. It cited a Supreme Court judgment dated January 8, 2024, in JVVNL vs. MB Power, reinforcing the importance of market-aligned pricing.

Delays in signing the Battery Energy Storage Sale Agreement (BESSA) and Battery Energy Storage Purchase Agreement (BESPA) contributed to market dynamics shifting since the bidding process. The Commission observed that BESS tariffs have significantly decreased since the tender, making the discovered tariff uncompetitive. While acknowledging that price reductions after bidding are generally not grounds for rejecting discovered tariffs,

CERC highlighted that this case was exceptional due to:

• Significant delays in project execution, allowing market conditions to evolve unfavorably.

• Missed timelines, which could have otherwise safeguarded the discovered tariff from re-evaluation.

This case serves as a vital learning opportunity for SECI and other stakeholders in India’s emerging energy storage sector.