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NTPC Cancels Significant 400 MWh BESS Contract in India
NTPC has cancelled a 400 MWh BESS contract in India, encashing financial guarantees and highlighting challenges in the Indian energy storage market. The re-tendering will occur at the original contractor's risk.
NTPC, a leading Indian power utility, has cancelled an Engineering, Procurement, and Construction (EPC) contract valued at ₹413.37 crore for a large-scale 400 MWh Battery Energy Storage System (BESS). This project was slated for the Mouda Super Thermal Power Station in Maharashtra. Following the cancellation, NTPC has encashed approximately ₹91 crore in bank guarantees and surety bonds from the contractor, GR Infraprojects Ltd (GRIL).
This cancellation is significant as it marks the first publicly reported major contract failure within NTPC's ambitious BESS program, which encompasses a total capacity of 38.9 GWh. The re-tendering of the project will proceed at GRIL's risk and cost. This implies that GRIL could face additional claims for any price differential if the re-awarded contract exceeds the original value.
While the Mouda cancellation sets a precedent for future tenders, NTPC emphasizes that its broader BESS program is not paused. Priority measures are in place to ensure an early re-award at Mouda. The 400 MWh project represents only a small fraction of NTPC's total 38.9 GWh pipeline, with 6.62 GWh currently under construction and 32.28 GWh planned.
Challenges in implementing BESS projects in India are structural. Key bottlenecks include an import-dependent supply chain for battery cells (over 90%), grid connection delays that can span 18 to 30 months, and financing risk premiums. These factors contribute to an estimated 8 GWh to 53 GWh of the nationally tendered 83 GWh BESS capacity being cancelled. The Mouda outcome highlights the need for a recalibration of risk allocation within the Indian BESS sector.
The source for this article is Bing News, via a report from Discovery Alert.
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Talk to Oranje-Eco →This article is an Oranje-Eco summary of a report by Bing News: "BESS" tender. Read the original: Bing News: "BESS" tender.
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