Cabinet Clears Rs 14,500 Crore Funding Scheme For Grid-Scale Energy Storage

New Delhi, Nov 5 (KNN) The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a Rs 14,500 crore Viability Gap Funding (VGF) scheme to support the development of 92 GWh of grid-scale energy storage capacity during FY 2026-27 to FY 2030-31.

The scheme will support 60 GWh of pumped storage projects, 30 GWh of battery energy storage systems (BESS) and 2 GWh of alternative energy storage technologies. The projects are estimated to involve a total investment of Rs 97,600 crore.

The funding aims to improve project viability and accelerate the deployment of storage infrastructure. The scheme is intended to support the integration of renewable energy into the grid and strengthen grid stability.

Energy storage capacity will be allocated through tariff-based competitive bidding. Public and private sector electricity distribution companies will be eligible for VGF support for BESS and pumped storage projects, while alternative storage technology projects can be implemented by public and private sector entities.

BESS projects will be subject to a minimum domestic content requirement of 40% to promote local manufacturing and reduce dependence on imported components.

The scheme aims to support the development of new storage capacity equivalent to 170 per cent of India's current grid-scale energy storage capacity. It will also contribute towards meeting the country's estimated requirement of 411 GWh of grid-scale storage by 2031-32.

(KNN Bureau)