Coal India and Sarus Infra Secure TGGENCO’s 1.5 GWh BESS Auction

Background and Context

Telangana Power Generation Corporation (TGGENCO) has finalized its auction for standalone battery energy storage systems (BESS), marking a critical step in the state’s efforts to integrate intermittent renewable energy into its grid. The tender, originally floated in November 2025, sought to procure 375 MW/1,500 MWh of storage capacity to be deployed at key substation locations. This initiative follows a previous 250 MW/500 MWh pilot project tender, signaling a strategic scale-up in Telangana’s energy storage infrastructure.

Key Details

Coal India and Sarus Infrastructures emerged as the successful bidders, each securing 187.5 MW/750 MWh. The projects are strategically located at the Choutuppal and Maheswaram substations, respectively. The Choutuppal project is estimated at ₹10.57 billion, while the Maheswaram project is valued at ₹10.15 billion. Developers are required to connect these systems at the 400/220 kV level.

Technical requirements are stringent: the systems must support one full charge-discharge cycle daily (4-hour duration) with a minimum annual system availability of 95% and an AC-to-AC round-trip efficiency of 85%. To support project viability, TGGENCO is providing land on a right-to-use basis for a nominal lease fee of ₹1/acre/year. Furthermore, the projects are eligible for Viability Gap Funding (VGF) of ₹1.8 million per MWh, disbursed in three tranches linked to financial closure and commercial operation milestones.

What This Means for EPCs and Developers

For EPC contractors and developers, this auction underscores the shift toward large-scale, grid-connected storage as a standard utility requirement. The 18-month commissioning timeline from the effective date of the BESPA necessitates robust supply chain management and technical expertise in battery integration. The inclusion of VGF is a critical de-risking mechanism, though developers must strictly adhere to using commercially established technologies to mitigate technical risks. The 15-year BESPA provides long-term revenue visibility, making this an attractive segment for firms capable of managing high-capacity storage assets.

What Happens Next

The immediate next step is the signing of the BESPA, which must occur within 30 days of the issuance of the letters of award. Following this, the developers will move toward financial closure, which will trigger the first tranche of VGF disbursement (20%). Stakeholders should monitor the project timelines closely, as the 18-month commissioning window will require rapid site mobilization and procurement of battery modules and balance-of-system (BOS) components.