At least 85% of power from VGF-funded Battery Energy Storage Systems projects to be first offered to Discoms

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Last Updated26/12/2023

The Union Minister for Power and New & Renewable Energy, has announced the approval of a scheme for Viability Gap Funding (VGF)

To facilitate the development of Battery Energy Storage Systems (BESS) with a capacity of 4,000 megawatt-hours (MWh).

The Central Government will provide VGF up to 40% of the capital cost for BESS.
Selection of public and private sector entities through a bidding process conducted by Implementing Agency(ies) following Scheme and Bidding Guidelines.

Projects under the scheme will be approved over a three-year period (2023-24 to 2025-26).

At least 85% of power from VGF-funded BESS projects will be offered to Distribution Companies (Discoms) before making it available to others.
The scheme aims to benefit consumers through efficient power distribution.
The Cabinet has previously approved the Viability Gap Funding Scheme for BESS development.
The cost of energy storage discovered in bids is 10.18 rupees per kilowatt-hour.
VGF and Production Linked Incentive (PLI) for battery energy storage are expected to reduce the overall cost of storage.