NTPC Vidyut Vyapar Nigam Limited (NVVN), a subsidiary of NTPC Limited, has approached the Uttar Pradesh Electricity Regulatory Commission (UPERC) seeking formal approval for tariffs discovered through a competitive bidding process for a large-scale battery storage project in the state. The petition, numbered 2295 of 2025, relates to a contractual arrangement between NVVN and U.P. Power Corporation Ltd. (UPPCL) for the development of a 250MW/1000MWh standalone Battery Energy Storage System (BESS).
The proposed project will be developed at the Garautha substation located in Jhansi district of Uttar Pradesh. The project is being implemented under the central government’s Viability Gap Funding (VGF) scheme, which is designed to support the development of energy storage infrastructure and enhance grid reliability. Battery Energy Storage Systems are increasingly becoming an important component of modern power systems, particularly for integrating renewable energy sources and managing fluctuations in electricity demand.
According to NVVN, the tariffs were discovered through a transparent e-reverse auction conducted in July 2025. Two developers emerged as successful bidders through the process. Sunsure Energy Private Limited secured a capacity allocation of 125MW with a discovered tariff of ₹6.64 per kWh. Meanwhile, Enerica Infra 3 Private Limited was awarded the remaining 125MW at a tariff of ₹6.65 per kWh. Both projects will operate under long-term agreements spanning 15 years.
NVVN stated that the discovered tariffs are highly competitive when compared with similar state-level battery storage tenders. As an example, the company highlighted projects in Bihar where the effective costs were significantly higher. The competitive tariffs are expected to support cost-effective energy storage solutions for the state’s power system.
During the regulatory hearings, an important issue discussed was the trading margin and the application of Goods and Services Tax (GST). Initially, NVVN had proposed a trading margin of 7 paise per kWh along with GST. However, after queries from the Commission and further examination of tax provisions, it was acknowledged that electrical energy is generally exempt from GST. As a result, NVVN agreed to revise the Battery Energy Discharge Sale Agreement (BEDSA) and set a flat trading margin of 7 paise per kWh without any additional GST.
UPERC observed that the proposed battery storage project could play a significant role in strengthening the state’s power system. By enabling better integration of renewable energy and supporting peak demand management, the project could help optimize overall power procurement costs for the state utility. Additionally, locating the BESS facility within Jhansi will help reduce interstate transmission losses and minimize grid congestion.
The Commission has admitted the petition and directed NVVN to finalize the necessary documentation and make the required corrections to ensure that the project progresses according to the planned timelines.
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