Tamil Nadu advances 1,500 MWh storage, wind repowering initiatives to build a resilient renewable grid

The Tamil Nadu Electricity Regulatory Commission (TNERC) has given the green signal to a major battery energy storage initiative that will install 1,500 megawatt-hour of storage capacity across seven substations in the state, marking another significant stride in the region’s renewable energy infrastructure development.

The project, valued at Rs 18 lakh per MWh under the Centre’s Viability Gap Funding scheme, will deploy 375 MW of standalone battery systems operating on a four-hour discharge cycle.

Tamil Nadu Green Energy Corporation Ltd (TNGECL) will conduct the developer selection through an e-reverse auction process under a 'build-own-operate’ model, with the Union Ministry of Power’s Power System Development Fund providing financial backing. The selected developers will enter into 15-year battery energy storage purchase agreements with Tamil Nadu Power Distribution Corporation Ltd, with projects required to reach commercial operation within 18 months of contract signing.

The battery installations will be strategically positioned at substations in Palladam, Tiruvarur, Karamadai, Pudukkottai, Thatchankurichi, Thappagundun and Anaikadavu. These facilities must deliver 1.5 full charge-discharge cycles daily, while maintaining 95 per cent availability, with developers receiving capacity charges calculated on a per-megawatt monthly basis.

The regulatory commission has mandated provisions for metering infrastructure, dedicated service connections for auxiliary power requirements and real-time communication links with grid control centers to ensure operational transparency.

This approval builds on Tamil Nadu’s expanding energy storage portfolio. Earlier in June 2025, three companies secured contracts for a combined 1,000 MWh of battery storage systems through a TNGECL tender.

NLC India Renewables Ltd, a subsidiary of NLC India Ltd, won the largest share with a 500 MWh project, while Bondada Engineering Ltd and Oriana Power secured 400 MWh and 100 MWh projects, respectively. The latest 1,500 MWh project represents a 50 per cent increase over that initial deployment.

The battery storage systems are designed to address critical grid management challenges, particularly during peak demand periods in the morning and evening hours, when solar generation either hasn't commenced or has declined. By storing excess renewable energy generated during off-peak hours and releasing it during high-demand periods, these facilities will enhance grid stability while reducing reliance on fossil fuel-based peaking power plants.

In a parallel development, TNERC has also approved a 34.75 MW hybrid wind-solar project as part of the state's renewable asset repowering strategy. The initiative will develop 18.75 MW of wind capacity and 16 MW of solar installations at legacy wind farm sites in Kayathar I and II, Puliankulam, and Muppandal villages in southern Tamil Nadu.

These locations hosted some of the state's earliest wind installations, with 110 turbines totaling 17.355 MW commissioned between 1985 and 1992 through a joint venture involving TNGECL, the Tamil Nadu Energy Development Agency and the Union Ministry of New and Renewable Energy, in technical collaboration with Denmark's Danida Energy Agency.
Of those original 110 turbines, only 15 remain operational today, with the remaining 95 machines condemned due to unavailability of spare parts and maintenance support from original equipment manufacturers who have since exited the industry.

The repowering project will replace these obsolete 55-250 kW machines with modern hybrid installations under a tariff-based competitive bidding process. TNGECL will execute 30-year lease agreements for the TEDA-owned sites and sub-lease them to successful bidders for 27 years at a nominal rent of one rupee annually plus applicable taxes.

However, critics argue the repowering initiative lacks ambition given the scale of opportunity. With modern wind turbines rated at 3 MW and higher, and Tamil Nadu possessing substantial wind resources currently served by sub-optimal turbines below 500 kW capacity, a more aggressive repowering strategy could dramatically accelerate the state's progress toward Renewable Purchase Obligation targets at lower levelised costs.

The combined battery storage and hybrid renewable projects represent complementary solutions to Tamil Nadu's energy transition challenges. While the battery systems provide the flexibility to balance intermittent renewable generation with demand patterns, the repowering initiative maximises energy capture from proven wind resources.

The levelised tariff for the hybrid project has been calculated at Rs 2.93 per unit over 25 years, excluding land and evacuation infrastructure costs. Together, these initiatives show how investing in storage and modernizing aging renewable assets can build a more resilient, sustainable power system that meets rising demand while cutting emissions and reliance on thermal generation.