- Why peak is shifting (load, weather, EVs, AC)
- What SECI’s hybrid and storage bids are signalling
- BESS economics 101 (4-hour vs. 2-hour; degradation; cycling)
- Contract structures: RTC, peak blocks, and deviation rules
- Who benefits: discoms, IPPs, OEMs—and consumers
The short
- Tariff discovery: Storage-backed hybrids are narrowing the spread between solar-day and evening-peak power.
- System value: Four-hour BESS shifts cheap mid-day energy into the 6–10 pm block, cutting reliance on expensive peakers.
- Next step: Firming contracts (RTC/peak) and ancillary markets monetise flexibility, not just megawatt-hours.
Why peaks are different now
Air-conditioning load, hotter evenings, and shifting industrial schedules have fattened the evening peak. Renewables are already shaving the midday curve; storage is now filling the dusk valley-to-crest gap.
What SECI’s bids tell us
Hybrid (solar+wind+storage)
Bundled bids deliver higher effective capacity with lower curtailment. Dispatchable Lower integration cost
Standalone BESS
Procured for peak blocks and ancillary services. Fast response Multi-revenue
Recent discoveries indicate that storage adders are becoming predictable, enabling bankable PPAs where energy and capacity are priced separately.
BESS economics in one page
- Duration choice: 4-hour solves the evening peak; 2-hour suits ramping/ancillary services.
- Cycling: Daily cycles with 85–90% round-trip efficiency; warranties structured on throughput (MWh) and years.
- Degradation: Capacity fade is managed via augmentation tranches in years 4–8.
- Stacked value: Energy arbitrage + peak capacity + frequency control + deviation settlement savings.
| Design | Use-case | Revenue levers |
|---|---|---|
| 4-hour BESS @ 1C | Evening peak block | Capacity payment + peak energy + deviation savings |
| 2-hour BESS @ 0.5–1C | Ramping, reserves | Ancillary + congestion relief |
| Hybrid (S+W+BESS) | Firm/RTC slices | Bundled PPA with cap/energy split |
Contracts that matter
- RTC (Round-the-Clock): Firm delivery percentages (e.g., 85–90%) with penalties for shortfall—BESS covers variability.
- Peak-block PPAs: Fixed delivery window (often 4 hours in the evening); capacity and energy decoupled.
- Deviation Settlement: Better forecasting and storage reduce imbalance charges and grid stress.
Bankability tip: Clear augmentation rules + indexed battery replacement costs de-risk lender models.
Who benefits
Discoms
Lower peak procurement costs and fewer emergency purchases. Tariff stability
IPPs/Developers
Multi-revenue stacks and higher capacity factors. Bankable cash flows
OEMs & Integrators
Inverters, EMS, transformers, and safety systems scale with storage penetration.
Consumers
Fewer outages and smoother tariffs as peak volatility declines.
Risks & mitigants
- Supply-chain swings: Lock module supply with indexed contracts; diversify vendors.
- Policy drift: Push for explicit capacity payments and ancillary market access.
- Under-sizing: Model realistic load growth; avoid 2-hour systems for 4-hour problems.
What to watch next
- Next SECI storage/RTC auctions and discovered adders
- Ancillary market rules (AGC, primary/secondary reserve procurement)
- State regulators’ ToD tariff revisions and peak spreads