India Launches ₹14,500 Crore Scheme for Energy Storage Development
The Indian Union Cabinet, led by Prime Minister Shri Narendra Modi, has unveiled a groundbreaking initiative to enhance the country’s energy storage capabilities. The newly approved Viability Gap Funding (VGF) Scheme is set to provide financial support totaling ₹14,500 crore from FY 2026-27 to FY 2030-31. This ambitious project aims to establish an energy storage capacity of 92 GWh, significantly increasing India’s current grid-scale energy storage capacity.
As part of this initiative, the government plans to upsurge the energy storage capacity by 170%, aspiring to achieve a total of 411 GWh by the year 2031-32. This effort is crucial for bolstering India’s power sector infrastructure, which will enable the seamless integration of renewable energy sources and ensure a reliable, affordable supply of electricity around the clock.
Significant Investment for Future Energy Needs
The VGF scheme is not just a financial commitment; it paves the way for an estimated total investment of ₹97,600 crore. This investment will facilitate the development of 60 GWh of Hydro Pumped Storage Plant (PSP) capacity, 30 GWh of Battery Energy Storage System (BESS) capacity, and 2 GWh from alternative energy storage technologies. Such a comprehensive approach is designed to enhance the financial viability of these projects and hasten the establishment of large-scale energy storage infrastructure in the nation.
Encouraging Domestic Manufacturing
A pivotal aim of this scheme is to boost India’s domestic manufacturing ecosystem for energy storage systems. By introducing a minimum Domestic Content Requirement (DCR) of 40% for BESS projects, the scheme will promote local manufacturing and reduce reliance on imported components. This move is expected to generate numerous opportunities for Indian industries while complementing the existing supply incentives for battery production.
Building a Resilient Electricity System
The scheme is an essential step towards creating a flexible and resilient electricity system in India. By promoting the deployment of grid-scale energy storage, India can better utilize renewable energy sources, address their variability, and diminish reliance on traditional power generation methods for continuous power supply. The initiative is expected to strengthen grid stability, improve renewable energy integration, and enhance the nation’s long-term energy security.
Through this endeavor, the government’s vision of Atmanirbhar Bharat and Viksit Bharat is further advanced, showcasing a commitment to a sustainable energy future for the country.
