Union Cabinet Clears Rs 14,500 Crore Viability Gap Funding Scheme to Build 92 GWh of Grid-Scale Energy Storage by FY31

Key facts

• The Union Cabinet approved a Rs 14,500 crore viability gap funding (VGF) scheme to develop 92 GWh of grid-scale energy storage capacity by FY31, supporting integration of large-scale renewable energy.
• The scheme comprises 60 GWh of pumped storage plants, 30 GWh of battery energy storage systems (BESS) and 2 GWh of emerging storage technologies, with total estimated investment of Rs 97,600 crore.
• The new capacity equals 170% of India's existing 54 GWh storage, while the country's total storage requirement is estimated at 411 GWh by 2031-32.
• Capacity will be allocated through tariff-based competitive bidding, with both public and private sector electricity distribution companies eligible for VGF support.
• BESS projects must meet a minimum 40% domestic content requirement to promote indigenous manufacturing and reduce import dependence.