The Union Cabinet has approved a Viability Gap Funding (VGF) Scheme for the development of Grid-Scale Energy Storage Systems, according to an official release by the Ministry of Power. The scheme has a total financial support of Rs.14,500 crore covering the period from financial year 2026-27 to 2030-31.
The initiative aims to support the creation of 92 GWh of energy storage capacity, consisting of 60 GWh of Hydro Pumped Storage Plant capacity, 30 GWh of Battery Energy Storage System (BESS) capacity, and 2 GWh through alternative energy storage technologies. The total estimated investment for the initiative is Rs.97,600 crore.
According to the release, energy storage capacity will be allocated through a tariff-based competitive bidding process. Public and private sector electricity distribution companies will be eligible for VGF support for BESS and Hydro PSP projects. Additionally, BESS projects will be subject to a minimum Domestic Content Requirement of 40% to promote indigenous manufacturing.
What it means
- Public and private sector electricity distribution companies are eligible for VGF support for BESS and Hydro PSP projects.
- BESS projects must meet a minimum Domestic Content Requirement of 40% to promote indigenous manufacturing.
Source
Press Information Bureau, Government of India, “Cabinet approves Rs.14,500 crore Viability Gap Funding Scheme for development of 92 GWh Grid-Scale Energy Storage Systems”. Read the original release.
Summary of an official release for general information only. Not investment advice. Read the original source before acting on any information.
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