Politics · India Bureau
India backs ₹14,500 crore subsidy push for grid energy storage
The Union Cabinet has approved a viability gap funding scheme to accelerate deployment of large-scale battery and pumped storage projects across India. The initiative aims to add 92 GWh of grid-scale storage capacity by fiscal 2031.
LSN India ·
India's Cabinet has cleared a ₹14,500 crore viability gap funding (VGF) scheme to bolster the development of grid-scale energy storage infrastructure, a critical component of the country's renewable energy transition. The programme targets installation of 92 GWh of storage capacity by the end of fiscal year 2030-31, encompassing both pumped hydro storage and battery energy storage systems.
The total estimated investment required for the storage projects under the scheme is pegged at ₹97,600 crore, with the government subsidy making up roughly 15 per cent of the total outlay. The VGF approach is designed to bridge the financial gap for storage projects that might otherwise struggle to attract investment, ensuring developers can deliver competitive electricity prices while maintaining project viability.
Energy storage has emerged as a linchpin for India's ambitions to expand renewable power generation. As the country adds substantial solar and wind capacity, storage systems are essential to address intermittency and ensure grid stability, reducing reliance on conventional thermal generation during peak demand periods.
The scheme is expected to support a mix of technology solutions, with pumped storage hydro projects leveraging natural topography in various regions, while battery storage systems offer flexible deployment options closer to demand centres. Officials indicated the initiative would be rolled out in phases, with projects evaluated based on technical merit and cost-effectiveness criteria.