Cabinet approves Rs 14,500 crore VGF scheme for energy storage

NewsIndia NewsCabinet approves Rs 14,500 crore VGF scheme for energy storage Cabinet approves Rs 14,500 crore VGF scheme for energy storage Cabinet on Wednesday approves a Rs 14,500 crore viability gap funding (AI-generated image) NEW DELHI: Union Cabinet on Wednesday approved a Rs 14,500 crore viability gap funding (VGF) scheme to develop 92 gigawatt-hour (GWh) of grid-scale energy storage capacity by FY31 to facilitate integration of large-scale renewable energy generation.Power ministry officials said the scheme will support the creation of additional storage capacity equivalent to 170% of the existing 54 GWh available in India.

Govt has estimated the country’s energy storage requirement at 411 GWh by 2031-32.Under the proposed scheme, 60 GWh of pumped storage plants (PSP), 30 GWh of battery energy storage systems (BESS) and another 2 GWh of emerging storage technologies will be developed, involving a total estimated investment of Rs 97,600 crore.The ministry said the scheme will strengthen India’s power sector infrastructure by facilitating large-scale integration of renewable energy and ensuring reliable, affordable and round-the-clock power supply.

“It will also provide an impetus to domestic manufacturing of battery energy storage systems, reduce import dependence and enhance the country’s long-term energy security,” the power ministry said in a statement. The VGF support will improve the financial viability of projects and accelerate the deployment of large-scale storage infrastructure.The capacity will be allocated through a tariff-based competitive bidding process, with both public and private sector electricity distribution companies eligible for VGF support.Join conversation InsightfulAgreeDisagreeSkepticalConcerningPromisingWorth ReadingBig Development To promote indigenous manufacturing, BESS projects will have to meet a minimum domestic content requirement of 40%.Rajesh Kaushal, head of energy infrastructure business at Delta Electronics India termed the VGF scheme a landmark decision.

“More solar and wind projects are being added to the grid every year, and storage is what allows us to use that power round the clock. The 40% domestic content requirement will help boost Indian manufacturing. A stable, clean grid powered by Made-in-India solutions is what we are working towards,” Kaushal said.

Get the latest India News and Live updates. Download the TOI app. Atul Mathur is a Senior Assistant Editor at The Times of India with over 27 years of experience in journalism. Based in Delhi, he has spent much of his career reporting on governance, public policy and politics, churning out researched, data-driven stories that impact daily lives.

Atul is known for investigative depth and strong human-interest narratives as he strives to bring clarity and context to complex issues. He currently tracks the energy sector, writing on power, renewable energy, coal and mines.

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