Tamil Nadu Launches Energy Policy To Overcome Power Issues

The Tamil Nadu government has launched the Tamil Nadu Battery Energy Storage Systems (BESS) Policy, 2026, under which it aims to build a capacity of 10 gigawatt-hours (GWh) by 2029.

The policy has been rolled out to overhaul the state's power grid, ensure energy security, and slash power purchase costs. The state has also launched a dedicated single-window portal to help applicants.

Under the new policy, any new solar or solar-hybrid project of 1 megawatt and above, applied or commissioned on or after the policy notification, must install a BESS capacity of at least 10 per cent of its solar capacity. It also needs to have a four-hour discharge duration.

The Tamil Nadu Power Distribution Corporation Limited will also procure a storage capacity of 2,500 MW / 10,000 MWh in its first phase through competitive bidding.

The decision comes as Tamil Nadu, which has nearly 29.8 gigawatts of installed solar and wind capacity, faces hurdles regarding grid integration. The state struggles with power deficits during evenings, compelling it to rely on short-term market purchases or power swaps to meet demand.

The new policy aims to solve the issue by capturing surplus solar energy and releasing it during peak power demand hours.

Strict Operational Standards

To ensure the systems perform when the grid needs them most, BESS projects are required to maintain an annual availability of at least 95 per cent and be online and available during peak demand windows from March 1 to June 30 and September 1 to October 31 each year.

Additionally, to safeguard critical infrastructure against cyber vulnerabilities, developers must use domestically developed indigenous Energy Management System (EMS) platforms.

Incentives for Investors

To attract private investment and fast-track implementation, the policy offers substantial financial reliefs. Eligible BESS projects that begin commercial operations during the policy window will enjoy a complete waiver on transmission and wheeling charges for a period of 10 years.