batch script to set a variable with the current path location

The current directory is in the "shadow" variable cd.
You could try

set "var=%cd%"

%~dp0

This expands into the drive & path of the currently running batch file. I usually surround my batch files with something like:

@echo off
pushd %~dp0

...

popd

Edit: It seems I didn't understand the OP. My example gets the location of the currently running script, not the "Current Directory". +1 to jeb.