Telangana came late to the standalone-battery party but has moved quickly. The state’s storage story sits in two layers: a fresh state policy that encourages storage with land and tax sweeteners, and a set of procurement tenders — run mostly by the state generation company — that actually buy it. This piece walks through both in plain terms, and flags where figures are still moving.
The state policy layer
The Government of Telangana notified its Clean and Green Energy Policy 2025 on 11 January 2025. It is a broad framework covering solar, wind, pumped storage, battery energy storage systems (BESS), hybrid and round-the-clock renewables, EV charging, green hydrogen and more. The headline ambition is to add roughly 20,000 MW of renewable and storage capacity by 2030 on top of the state’s existing base of around 11,000 MW, with the policy running through FY35. Officials have paired this with a wider goal of taking green power to about 50 percent of the mix by 2030, as peak demand is projected to double within a decade and pass 100,000 MW by 2047.
For battery projects specifically, the policy leans on a few incentives:
- Land at a nominal lease — reported at just 10 percent of market value, with a 5 percent escalation every two years over the life of the power purchase agreement.
- SGST reimbursement on BESS projects (sources differ on whether this is 50 percent or a fuller reimbursement — see the hedge below).
- Support for battery manufacturing, including a capital subsidy on fixed investment, to build a local supply chain alongside deployment.
The state has also signalled that BESS and pumped storage together are meant to provide the flexibility and resource adequacy a high-renewables grid needs. The nodal agencies named for driving this are TGGENCO (Telangana Power Generation Corporation) and TGREDCO (the state renewable-energy development corporation). If you want the national backdrop these state rules plug into, our central BESS policy guide and our explainer on the Energy Storage Obligation — the mandate that pushes DISCOMs (distribution companies) to source a rising share of power through storage — set the scene.
TGGENCO: the workhorse of procurement
Where the policy sets direction, TGGENCO does the actual buying. In January 2025 it floated Telangana’s first standalone-BESS tender — a 250 MW / 500 MWh pilot under tariff-based global competitive bidding with central Viability Gap Funding (VGF), a one-time capital grant that fills the gap between what a battery costs and what a DISCOM can afford. VGF here was pitched at up to ₹27 lakh per MWh or 30 percent of capital cost, whichever was lower.
Bids opened in February 2025 and the results are a useful benchmark:
- Bondada Engineering and Oriana Power won 50 MW / 100 MWh each, at capacity charges of about ₹2.40 lakh and ₹2.45 lakh per MW per month respectively.
- Pace Digitek won 125 MW / 250 MWh at roughly ₹2.45 lakh per MW per month.
- Of the 250 MW on offer, only about 225 MW was actually awarded.
Winners must commission within 18 months of signing the storage purchase agreement, support two operational cycles per day, hold at least 95 percent annual availability and maintain around 85 percent AC-to-AC round-trip efficiency. A follow-on 187.5 MW / 750 MWh four-hour project at Choutuppal was awarded to Coal India Limited in early 2026 at about ₹3.14 lakh per MW per month — a higher number, largely because it is a longer-duration, four-hour battery without the same VGF backing. Telangana has also invited bids for around 2 GW of pumped-hydro storage under a firm-and-dispatchable framework, signalling that batteries and pumped hydro are being procured side by side.
For how these auctions are structured nationally, our guide to standalone-storage tenders and the VGF scheme deep-dive go step by step, and our tender tracker keeps a running list of what is open.
The regulator and the DISCOMs
Tariffs discovered in these auctions are approved by the TSERC (Telangana State Electricity Regulatory Commission) before contracts are signed, and the batteries are ultimately dispatched to serve the state’s two DISCOMs — TGSPDCL (southern) and TGNPDCL (northern) — to shave evening peaks and firm up renewable supply. In effect, TGGENCO’s tenders are how those DISCOMs meet their storage and peaking needs.
What this means for you
If you are a developer, Telangana is a young but real market: a state policy offering land and tax incentives, a live tender pipeline across both batteries and pumped hydro, and tariffs that are now on record. If you are a DISCOM or an industrial buyer, the ₹2.40–3.14 lakh per MW per month range Telangana has discovered is a useful yardstick for what two-hour versus four-hour standalone BESS should cost today.
One caution: state incentives, VGF caps and tender terms all change by notification, so treat the figures above as a snapshot and confirm the live RfS before committing. To size a project against current Telangana tariffs — or to model the savings for your own load — try our BESS savings calculator.
Policy snapshot as of July 2026. The SGST reimbursement figure in particular is reported inconsistently across sources; terms change by notification, so verify current provisions before financial decisions.