Policy gaps
The Battery Energy Storage Systems (BESS) policy released by electricity minister C T R Nirmal Kumar on Tuesday aims to reach 10 gigawatts (GW) of installed battery storage in Tamil Nadu by 2029. Anyone installing a solar plant above 1MW must set up a battery system of at least 10% of the installed capacity. The minister said investors would be exempt from transmission and wheeling charges for up to 10 years, but experts say the benefit is too small to woo investment in battery storage. He added that the Tamil Nadu Power Distribution Corporation Limited (TNPDCL) will purchase battery power at 75% of the total value, with pricing to be decided by the Tamil Nadu Electricity Regulatory Commission (TNERC). Tamil Nadu has 14,717MW of installed solar capacity, most of it privately owned and set up for captive consumption by industries. Solar generation hit a new all-time high of 8,818MW on Oct 30.
Renewable Energy Producers’ Association (REPA) chief adviser K Venkatachalam said that under the existing system, solar power producers can use excess solar energy at night for captive use, keeping electricity costs in check. “But BESS policy says the energy stored in batteries cannot be used for captive consumption, and the minister too has made it clear battery power can only be sold to TNPDCL. If industries cannot use the battery power for their own consumption, not many will come forward to make huge investments in battery storage,” he said. “We have sought comments from stakeholders and challenged the policy in judicial forums,” he said. K E Raghunathan, national chairman of the Association of Indian Entrepreneurs and a solar expert, said the policy covers only macro aspects and needs more clarity to be implementable. Govt should have discussed with stakeholders and taken TNERC’s opinion for finalising the policy,” he said. He said micro, small and medium enterprises (MSMEs) are already struggling for profit, so BESS should be a priority for lending, and the government should also offer a subsidy. L Santhosh, president of the Tamil Nadu Electricity Consumers’ Association (TECA), said the financial benefits from energy storage and reduced power procurement costs should be reflected in the electricity tariff and passed on to industrial and commercial consumers. “The real success of the BESS policy is when Tamil Nadu could reduce its dependence on costly power purchases and provide reliable electricity to industries at competitive tariffs,” he added.
Chennai: The state’s new battery storage policy is unlikely to attract investors, experts say, as it strips existing industries of current benefits and leaves key questions unanswered. Solar power is in surplus during the day, but the lack of storage makes it unusable in the evening and at night. The government hopes the BESS policy will address this. “Battery storage is an expensive technology and maintenance-heavy. Availability of batteries is also a big challenge.