The Indian government is working on a new Viability Gap Funding (VGF) scheme worth approximately ₹15,000 crore to support the development of 112 GWh of energy storage capacity across the country. The proposed programme is designed to strengthen grid stability, improve renewable energy integration, and support India’s long-term energy transition goals.
The planned capacity includes 50 GWh of Battery Energy Storage Systems (BESS), 60 GWh of Pumped Storage Projects (PSP), and 2 GWh of emerging energy storage technologies. The funding mechanism aims to bridge the financial viability gap for large-scale storage projects, encouraging private-sector participation and accelerating deployment.
Energy storage has become increasingly important as India expands solar and wind generation capacity. Storage systems enable excess renewable energy to be stored and released during peak demand periods, helping maintain grid reliability and reducing renewable energy curtailment.
The proposed scheme builds upon earlier government initiatives, including VGF support for large-scale battery storage projects and incentives aimed at creating a robust domestic energy storage ecosystem. The move is expected to play a critical role in supporting India’s target of achieving a significantly larger share of renewable energy in its power mix.
Why This Matters
• Introduces a massive ₹15,000 crore support mechanism for energy storage deployment
• Targets 112 GWh of storage capacity across battery, pumped hydro, and emerging technologies
• Strengthens grid stability as renewable energy capacity continues to expand
• Reduces dependence on fossil-fuel-based balancing power during peak demand periods
• Encourages private investment in energy storage infrastructure
• Supports India’s clean energy, net-zero, and energy security objectives
• Creates opportunities for battery manufacturing, storage technology providers, and renewable energy developers
• Accelerates the development of a modern, flexible, and resilient power grid for the future