Cabinet Approves Rs. 145 bn Scheme for Grid-Scale Energy Storage
POWER & RENEWABLE ENERGY

Cabinet Approves Rs. 145 bn Scheme for Grid-Scale Energy Storage

The Union Cabinet has approved a Viability Gap Funding (VGF) scheme with financial support of Rs. 145 bn for developing 92 GWh of grid-scale energy storage capacity. The scheme will run from FY 2026-27 to FY 2030-31 and is intended to support capacity that has yet to be commissioned across India.

The proposed capacity will represent 170 per cent of the country’s present grid-scale energy storage capacity and contribute towards the required 411 GWh capacity by 2031-32. The initiative is designed to support larger integration of renewable energy, improve grid stability and enable reliable, affordable and round-the-clock electricity supply.

Under the scheme, 60 GWh will be allocated to Hydro Pumped Storage Plant (PSP) projects, 30 GWh to Battery Energy Storage Systems (BESS) and 2 GWh to alternative energy storage technologies. The projects are expected to involve total investment of Rs. 976 bn, with VGF support intended to improve their financial viability and speed up the deployment of large-scale infrastructure.

Capacity will be allocated through a tariff-based competitive bidding process. Public and private sector electricity distribution companies will be eligible for support for BESS and Hydro PSP projects, while projects using alternative storage technologies may be implemented by public and private sector entities.

The scheme also includes a minimum Domestic Content Requirement of 40 per cent for BESS projects. The requirement is intended to encourage domestic manufacturing, create opportunities for Indian industry and reduce dependence on imported components, alongside existing supply-side incentives for battery manufacturing.

The government expects the programme to improve the flexibility and resilience of the electricity system by addressing variations in renewable generation and reducing reliance on conventional generation for balancing power. It is also intended to strengthen energy security, support wider renewable energy utilisation and advance domestic manufacturing capabilities.

The Union Cabinet has approved a Viability Gap Funding (VGF) scheme with financial support of Rs. 145 bn for developing 92 GWh of grid-scale energy storage capacity. The scheme will run from FY 2026-27 to FY 2030-31 and is intended to support capacity that has yet to be commissioned across India. The proposed capacity will represent 170 per cent of the country’s present grid-scale energy storage capacity and contribute towards the required 411 GWh capacity by 2031-32. The initiative is designed to support larger integration of renewable energy, improve grid stability and enable reliable, affordable and round-the-clock electricity supply. Under the scheme, 60 GWh will be allocated to Hydro Pumped Storage Plant (PSP) projects, 30 GWh to Battery Energy Storage Systems (BESS) and 2 GWh to alternative energy storage technologies. The projects are expected to involve total investment of Rs. 976 bn, with VGF support intended to improve their financial viability and speed up the deployment of large-scale infrastructure. Capacity will be allocated through a tariff-based competitive bidding process. Public and private sector electricity distribution companies will be eligible for support for BESS and Hydro PSP projects, while projects using alternative storage technologies may be implemented by public and private sector entities. The scheme also includes a minimum Domestic Content Requirement of 40 per cent for BESS projects. The requirement is intended to encourage domestic manufacturing, create opportunities for Indian industry and reduce dependence on imported components, alongside existing supply-side incentives for battery manufacturing. The government expects the programme to improve the flexibility and resilience of the electricity system by addressing variations in renewable generation and reducing reliance on conventional generation for balancing power. It is also intended to strengthen energy security, support wider renewable energy utilisation and advance domestic manufacturing capabilities.

Related Stories

Gold Stories

Next Story
Equipment

BorgWarner secures three turbocharger contracts with global powertrain leader

BorgWarner has secured three new turbocharger contracts with a global powertrain technology company. The wins comprise one contract for its variable turbine geometry (VTG) turbocharger and two for its wastegate turbocharger. The technologies will be deployed in the customer's light-vehicle gasoline platforms in South America and Europe, with production scheduled to begin in 2027.The VTG turbochargers are designed for gasoline engines operating under demanding conditions and high-boost pressure requirements. They are engineered to support Miller-cycle engines and withstand exhaust temperatures ..

Next Story
Infrastructure Transport

International Digi Yatra Trials Begin at Seven Airports

India has begun trials of Digi Yatra for international passengers at seven airports, allowing eligible Indian passport holders to use facial recognition at selected airport checkpoints. The facility is currently limited to Indian nationals with e-passports travelling on selected international flights operated by Air India and IndiGo. The Civil Aviation Ministry announced the trials on 1 November, with testing scheduled through December 2026. A wider rollout is expected in 2027 after the ministry assesses passenger feedback gathered during the trial period, according to PTI. The system is inten..

Next Story
Infrastructure Transport

Air India Plans More Wide-Body Jets, CEO Signals Profitability Soon

Air India is seeking to expand its order for wide-body aircraft as it works to increase international passenger traffic, chief executive Tewolde Gebremariam said on Tuesday. The Tata Group-owned carrier is also targeting a return to profitability in the near term, as its turnaround programme addresses fleet, network and service challenges. The comments came months after Gebremariam took charge of the airline. Gebremariam, who previously led Ethiopian Airlines, said the airline wanted more wide-body aircraft. Air India has held discussions with Boeing and Airbus while assessing the economics of..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code