HQ Team
April 10, 2023: India’s Tata Power Company’s distribution arm has signed a pact with ADB for access to debt capital worth INR 1.5 billion ($18.2 million) to increase power supply in the nation’s capital, New Delhi.
According to a BSE filing, Tata Power Delhi Distribution Ltd inked another $2 million agreement with ADB to partially finance the purchase and integration of a pilot Battery Energy Storage System.
The senior secured financing will be used to commission a new 66/11-kilovolt grid, augment and expand transformers, substations, feeder lines, and switching stations, install smart meters, and replace obsolete electrical equipment and meters.
Senior security ranks higher in terms of payout ranking, ahead of more junior or subordinate debt. Secured and senior debt is paid first, in the event a company runs into financial trouble. Junior debt, then preferred shareholders, and common shareholders are paid out last.
The 10-megawatt-hour storage system is South Asia’s first grid-scaled energy storage project at the distribution transformer level. It will enable electricity to be stored and delivered on demand, reducing grid instability, and providing the flexibility to integrate intermittent solar and wind energy resources.
Goldman Sachs, Bloomberg
The grant to finance the storage system was provided by Goldman Sachs and Bloomberg Philanthropies’ Climate Innovation and Development Fund and administered by ADB. It had an initial commitment of $25 million.
“Power distribution is a crucial link in the electricity supply chain, and at times one of the most vulnerable. Mainstreaming a battery energy storage system at the distribution transformer level will better integrate renewable energy sources and contribute to a more disaster-resilient power distribution system for Delhi,” said Suzanne Gaboury, ADB’s Director General for Private Sector Operations.
The battery energy storage system plays a crucial role in building a resilient grid and paves the way for a future-ready power distribution network, said Dr. Praveer Sinha, CEO & Managing Director, of Tata Power.
“This will enable us in ensuring a high-quality power supply for consumers and help integrate clean energy into the power supply mix,” Mr. Sinha said.
In 2022, India’s Ministry of Power targeted a four percent battery storage capacity of total electricity consumption by 2030. India would need a total battery energy storage capacity of 182 gigawatt-hours to reach that goal by 2030.
Climate Innovation Fund
ADB’s financing through Climate Innovation and Development Fund for the pilot storage project will provide proof of concept and lessons learned by Tata to implement a planned additional 50 MWh of storage capacity.
In 2002, Tata Power Delhi Transmission was awarded a 25-year license to distribute and transmit electricity in Delhi’s north and northwest regions. Tata Power is one of India’s largest integrated power companies.
Tata Power is currently serving more than 12 million consumers through its distribution companies, under a public-private partnership model with the Government of Delhi in North Delhi.
It is looking at new business growth in distributed generation through rooftop solar and microgrids, storage solutions, EV charging infrastructure, home automation, and smart meters.
