Uttar Pradesh Approves 375 MW/1500 MWh Battery Storage Project To Strengthen Grid Stability And Manage Peak Power Demand

In a major step toward enhancing the stability of Uttar Pradesh’s power grid, the Uttar Pradesh Electricity Regulatory Commission (UPERC) has processed a petition to adopt tariffs for a 375 MW/1500 MWh standalone Battery Energy Storage System (BESS). The project, led by SJVN Limited (SJVNL), is designed to provide on-demand energy storage to the U.P. Power Corporation Ltd. (UPPCL). This will help the state manage peak electricity demand and make effective use of surplus power during off-peak periods.

The project was developed under the Ministry of Power’s guidelines, with SJVNL acting as the implementing agency. A transparent and competitive bidding process was initiated in February 2025. The response from the industry was overwhelming, with 21 bidders submitting a total capacity of 3,395 MW, nearly nine times the required capacity. After detailed technical and financial evaluations, 18 bidders qualified to participate in an e-reverse auction held on July 4, 2025.

The auction produced record-low tariffs for battery storage in the country. Patel Infrastructure Ltd. secured half of the project, amounting to 187.5 MW, at a rate of ₹3,59,000 per MW per month. The remaining 187.5 MW was awarded to Enerica Infra 3 Pvt. Ltd. at ₹3,59,999 per MW per month. The significantly reduced tariffs were supported by Viability Gap Funding (VGF), a government incentive that aims to make advanced technologies like BESS more affordable and financially viable for large-scale implementation.

A notable topic of discussion during the regulatory review was the “trading margin,” which is the fee paid to SJVNL for facilitating the project. Initially, guidelines suggested a lower margin, but UPPCL and SJVNL agreed on a fee of 7 paise per kWh. This is in line with standards applied by other major agencies such as NTPC and SECI for similar storage projects. UPPCL highlighted that acquiring this storage capacity quickly was crucial for the state’s energy security. Any delay could have jeopardized the federal VGF funding that supports the project.

The storage systems are planned to be installed near the Garautha Substation in Jhansi, directly connecting to the state’s transmission network. This location has been chosen strategically to ensure efficient distribution of stored energy across Uttar Pradesh. Under a 15-year agreement, UPPCL will be the sole buyer of the storage capacity, guaranteeing a steady and reliable power supply during peak demand hours.

This initiative marks a significant advancement for Uttar Pradesh in integrating large-scale energy storage into its electricity infrastructure. By combining competitive tariffs, government incentives, and strategic placement, the state is positioning itself to manage electricity demand more effectively. Experts say that projects like these will play a vital role in supporting grid stability, promoting renewable energy utilization, and ensuring uninterrupted power supply for residents. With the adoption of tariffs by UPERC, the project is now one step closer to execution, signaling a new era in energy planning and reliability for Uttar Pradesh.

This 375 MW/1500 MWh BESS project demonstrates how large-scale storage can help states balance supply and demand, strengthen grid resilience, and make renewable energy integration more feasible in the long run.