India’s Shift to Dispatchable Renewables: Evaluating the Economics of recent Solar Plus Storage Auctions

India’s renewable energy transition is entering a new phase characterized by firm and dispatchable renewable power enabled through large-scale battery energy storage systems (BESS). This article examines three recent landmark developments — the SECI 2 GW + 4 GWh solar + storage auction, the RUMSL 600 MW hybrid solar + BESS project, and the CERC’s tariff approval for 2.4 GW FDRE projects — to assess their techno-economic structure, tariff trajectory, and policy implications. Together, these auctions mark the beginning of renewable dispatch flexibility at grid scale, positioning India at the forefront of low-cost, reliable clean power.

India’s power system is rapidly evolving from capacity addition to firm renewable integration. With renewable energy penetration projected to exceed 50% of installed capacity by 2030, variability management through storage and hybridization has become critical. The government, through the Solar Energy Corporation of India (SECI), Rewa Ultra Mega Solar Ltd (RUMSL), and SJVN/NTPC, has launched a sequence of solar + storage and Firm and Dispatchable Renewable Energy (FDRE) tenders designed to provide 24×7 clean power at grid-competitive tariffs.

These initiatives not only reflect declining battery costs but also an institutional shift toward energy-as-service models, where reliability and flexibility are as valuable as generation.

SECI’s 2 GW + 4 GWh Tender: Structuring Affordable Dispatchability

In June 2025, SECI floated India’s largest solar + storage tender — 2,000 MW of solar capacity coupled with 4,000 MWh of energy storage, structured under a Build–Own–Operate model with a 25-year PPA.

Key Design Features:

Parameter	Specification
Total Capacity	2 GW solar + 4 GWh ESS (4 hours storage)
Storage–Solar Ratio	Minimum 0.5 MW/2 MWh per MW of solar
Tariff Range	₹ 2.86–₹ 2.87 /kWh
Winning Bidders	Shivalaya Construction (600 MW), Purvah Green Power, SAEL, Navayuga, and others
PBG	₹ 3.5 million/MW
CUF Requirement	19–30%
Commissioning Timeline	24 months from PPA signing
Land, Grid & Connectivity	Developer’s responsibility; ISTS connectivity mandatory

This structure creates a 4-hour dispatchable renewable block, allowing SECI to deliver power during evening peaks, mitigating grid stress from renewable intermittency.

The discovered tariff of ₹ 2.86 /kWh marks a record low for integrated solar-storage systems globally, reflecting optimized sizing, improved battery costs (now near ₹ 9–10 crore/MWh installed), and competitive EPC financing.

However, the relatively tight bank guarantee and CUF floor create execution and performance risk. Developers must manage both solar generation efficiency and BESS cycling/degradation to maintain profitability within narrow tariff margins.

RUMSL 600 MW Solar + Storage: The True FDRE Prototype

In contrast, Rewa Ultra Mega Solar Ltd (RUMSL)’s 600 MW solar + BESS project in Madhya Pradesh, auctioned in early 2025, set new performance benchmarks. ACME Solar and Ceigall India emerged as winners with tariffs between ₹ 2.70 – ₹ 2.76 /kWh — even lower than SECI’s discovery.

This tender introduced firm dispatch requirements, including:

• 9 hours of daily supply (4 hours morning + 5 hours evening),

• 95% guaranteed availability, and

• minimum 35% annual CUF.

The design mandates time-of-day dispatch flexibility, aligning renewable output with demand peaks — a structural evolution from energy supply to capacity and reliability delivery.

Charging power for BESS will be drawn during off-peak periods at concessional tariffs from MPPMCL, creating a near-circular energy flow that enables cost optimization.

This framework demonstrates that firm, flexible renewable power can be delivered at sub-₹ 3/kWh, redefining India’s benchmark for dispatchable clean energy.

CERC’s 2.4 GW FDRE Approval: Establishing the Regulatory Ceiling

In September 2025, the Central Electricity Regulatory Commission (CERC) approved ₹ 4.25 – ₹ 4.26 /kWh tariffs for 2.4 GW FDRE projects tendered by SJVN. Developers include Hero Solar, Juniper Green, Renew Solar, Avaada, and Ganeko Energy.

Unlike the SECI and RUMSL models, the FDRE contracts are designed for round-the-clock renewable power, with continuous availability, firm scheduling, and risk-sharing through escrow-backed payment security.

CERC’s approval effectively sets a tariff ceiling for high-availability FDRE contracts until storage and grid-balancing costs fall further.

The differential between SECI (₹ 2.86), RUMSL (₹ 2.70), and SJVN FDRE (₹ 4.25) underscores the price gradient of firmness — the more reliable the renewable delivery, the higher the tariff.

Policy & Market Implications

1. Cost Convergence with Thermal PowerThe sub-₹ 3/kWh tariffs from SECI and RUMSL demonstrate that renewables with storage now rival new coal generation costs, especially for peak-hour power.

2. Storage as Grid InfrastructureBESS is transitioning from a project-specific component to a grid-level balancing asset, supporting frequency control, ramping, and ancillary services.

3. Investor Confidence & FinancingRecord participation and competitive tariffs highlight rising investor confidence, aided by improved access to green financing, viability gap funding (VGF), and concessional credit lines.

4. Execution & Technology RisksTight project timelines, high CUF mandates, and long-term degradation risk may stress project economics. Battery supply chain localization remains a bottleneck.

5. Future Evolution — FDRE 2.0Next-generation tenders are expected to allow multi-source charging (solar + wind) and co-located energy management, improving capacity factors to 50–60% and reducing per-unit costs further.

The convergence of SECI, RUMSL, and CERC initiatives marks a turning point in India’s renewable energy policy — from capacity addition to firm power delivery.

With solar + storage tariffs now competitive with thermal, India is positioned to deliver dispatchable green power at scale, potentially meeting 10–12% of its peak demand from hybrid renewable systems by 2030.

As technology matures and battery prices fall further (projected 30–35% reduction by 2027), India’s hybrid and FDRE tenders will define global benchmarks for cost-effective, reliable renewable energy integration.

In essence, the SECI 4 GWh tender and RUMSL’s 9-hour FDRE are not just projects — they are templates for the energy system of the future, where renewables are not intermittent liabilities but dependable, schedulable assets powering a resilient and decarbonized grid.

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