The Uttar Pradesh Power Corporation Ltd. (UPPCL) has taken a major step to improve grid stability and support renewable energy integration by approaching the Uttar Pradesh Electricity Regulatory Commission for approval of a large battery storage project. The proposal involves procuring 375 MW/1500 MWh capacity from standalone Battery Energy Storage Systems (BESS), which will be set up within the state and connected to the transmission network.
This project is aimed at solving one of the biggest challenges of renewable energy—its variability. Solar and wind power are not available all the time, which creates imbalances in supply and demand. With the help of battery storage, excess electricity generated during low-demand periods can be stored and used later when demand is high. This will help in managing peak load, reducing pressure on the grid, and lowering dependence on fossil fuel-based power generation.
The move is also in line with India’s long-term clean energy target of achieving 500 GW of non-fossil fuel capacity by 2030. By investing in large-scale storage, the state is preparing its power system to handle a higher share of renewable energy reliably.
A key feature of the project is financial support through Viability Gap Funding (VGF), which is being provided by the Ministry of Power under the Power System Development Fund. To meet the conditions of this funding, UPPCL has requested certain changes in the standard bidding guidelines. One such change is the timeline for achieving financial closure, which has been set at six months from the date of agreement signing. This adjustment has been made to align with VGF requirements.
In another important decision, UPPCL has limited participation in the bidding process to companies or consortia, excluding Alternative Investment Funds (AIFs). This has been done because AIFs typically have limited fund durations, which may not match the long-term nature of infrastructure projects like battery storage.
The project will be implemented under a Build-Own-Operate model. In this structure, UPPCL will purchase only the discharged energy from the system, while the developer will be responsible for arranging the charging power. The system is expected to maintain a monthly availability of 95 percent and complete one full four-hour discharge cycle every day.
To support domestic manufacturing, the tender also requires at least 20 percent local content in the total project cost, including software developed in India. This is expected to boost local industry participation in the growing energy storage sector.
The agreement for this project will be governed by a Battery Energy Discharge Purchase Agreement (BEDPA). UPPCL has also proposed a new payment security mechanism, replacing the usual multi-month reserve with a weekly revolving Letter of Credit, considering the current financial situation of distribution companies in the state.
With this 1500 MWh project, UPPCL aims to manage peak power costs more effectively while ensuring a stable and reliable power supply as the state moves toward a cleaner energy future.
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