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.
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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.
