SECI’s 600 MW/1200 MWh BESS EPC Tender: Pioneering Standalone Energy Storage with Long Term Operational Risk

The Solar Energy Corporation of India (SECI) has issued a groundbreaking EPC‑turnkey tender for a 600 MW / 1200 MWh standalone Battery Energy Storage System (BESS) at Kolimigundla, Andhra Pradesh. This tender covers the full scope of design, procurement, manufacture, logistics, installation and commissioning up to the PCS AC output terminals, followed by a comprehensive 15‑year O&M (Service & Maintenance) obligation from project commissioning.

Confirmed Scope – EPC Plus 15‑Year O&M

The tender explicitly requires:

• Design & Engineering

• Manufacturing, factory testing, inspections

• Packing, forwarding, transportation, unloading, site storage

• Services, permits, licences, and insurance at all stages

• Erection, installation, testing and commissioning up to PCS AC terminals

• Grid interconnection works to BESS PCS output

• Performance demonstration of dispatched energy and efficiency

• 15‑year comprehensive maintenance following commissioning

This ensures suppliers carry responsibility for both capital delivery and long-term performance liability.

Damodar Valley Corporation (DVC) in Jharkhand is executing a similar EPC tender for a 250 MW / 500 MWh hybrid BESS, inclusive of 12‑year comprehensive O&M, issued in April 2025. It mirrors EPC scope with long-term operational obligations under international competitive bidding. Similar tender also issued by NTPC/NVVN thermal stations. All these tender are still not closed/LoA not issued.

Why This EPC + 15‑Year Structure Differs from BOO/BOOT

• BOO (Build‑Own‑Operate) and BOOT (Build‑Own‑Operate‑Transfer) formats allow developers to own and operate assets with revenue from power or capacity sales, often with market risk and structured PPAs.

• SECI’s EPC structure pre-allocates ownership to SECI, with suppliers paid via milestones and SLAs focusing on performance metrics (i.e. dispatchable energy, efficiency, availability).

• Unlike BOO/BOOT, suppliers do not hold market exposure directly but bear performance liability even in under-developed ancillary services markets.

• Under BOOT, asset transfer at the end of concession may occur; here, no transfer is envisaged—SECI retains ownership post-O&M.

International Context & Lessons

Globally, similar EPC contracts awarding full turnkey BESS with extended maintenance obligations remain rare. Notable example: Australia’s Victorian Big Battery (300 MW / 450 MWh), built by Tesla via Neoen, includes EPC plus post‑commissioning operations overseen by Neoen but not a multi‑year supplier O&M guarantee under an external contract—providing flexibility for owner‑operators.

Namibia’s Erongo BESS awarded EPC to a Chinese consortium for a 58 MW / 72 MWh project under a grant—but maintenance beyond early operations is owner‑handled, not under a long-term bundled contractor O&M.

These contrast with SECI and DVC's approach: supplier-led O&M for over a decade, shifting operational risks to vendors.

Risk Factors & Contractual Pitfalls

1. Degradation Guarantees & Throughput Risk: Contracts mandate robust degradation schedules (decline in dispatchable energy declining from 1200 MWh to ~840 MWh over 15 years) and require ≥98% availability and ≥86% round-trip efficiency—failure exposes bidders to liquidated damages.

2. Thermal Safety & Fire Risk: International experiences (e.g. Victorian Big Battery fire) validate the need for rigorous fire suppression, containerised thermal containment, and continuous monitoring even in offline state. Liability remains entirely with supplier.

3. Uncertain Revenue Regime: While use cases include energy shifting and ancillary services, India's market is still evolving. SLAs assume revenue sufficiency to support 15 years of maintenance—even if RE arbitrage and ancillary service markets evolve slower than expected.

4. Interface & Scope Clarity: SECI’s Annexure‑B defines a clear demarcation between DC package (supplier) and AC package (grid interface). But similar efforts (e.g. NTPC tenders) have seen interface disputes when EPC scope is split—delays or penalties may result.

What Makes SECI Tender Stand Out

• Scale & Scope: Second‑largest standalone BESS EPC + long‑term O&M contract in India.

• Regulatory Comprehensiveness: Anchored with VGF scheme, Ancillary Services regulations and clear performance metrics.

• Investor Assurance: Availability, degradation, and efficiency guarantees backed by liquidated damages structure.

• Template for Future Projects: Successful execution will shape subsequent VGF tenders across states like Rajasthan and Gujarat—and inform warranty and contracting norms.

Sector Implications & Investor Insight

• If executed well, SECI’s model could define the EPC + supplier‑driven O&M standard in India’s nascent energy storage sector.

• Investors and lenders will focus intensely on supplier track record, quality systems, and thermal safety credentials.

• As the market matures, contractual models may evolve toward hybrid EPC + performance‑based PPAs—but SECI has chosen an operational milestone and SLA-heavy model for now.

• Competency in managing long‑tail degradation, thermal safety, and performance monitoring returns differentiate bidders.

Conclusion

SECI's 600 MW / 1200 MWh EPC tender with 15‑year O&M is a sector‑defining move. It translates international lessons into a uniquely ambitious Indian contract model—balancing scalability with risk allocation to suppliers. As NVVN/NTPC & DVC’s 250 MW EPC + 12‑year O&M tender also advances, the twin tenders will establish benchmarks for BESS execution and contracting across the country—and globally.

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