To boost battery energy storage systems (BESS), Finance Minister Nirmala Sitharaman said on February 1 that such projects will be offered viability gap funding (VGF) for a total capacity of 4,000 MWh.
Presenting the Union Budget 2023-24, Sitharaman also said that a policy framework for pumped storage plants is in the works but did not share details.
“To steer the economy on sustainable development path, battery energy storage systems with a capacity of 4,000 MWh will be supported with viability gap funding,” Sitharaman said in her budget speech.
Sitharman did not mention the outlay for the VGF, senior power ministry officials told Moneycontrol that a budgetary allocation of Rs 3,500 crore would be made to offer VGF for BESS of a total capacity of 4,000 MWh.
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Vikas Gaba, Partner and National Head, Power and Utilities, KPMG in India said, "Energy transition has been reinforced as key pillar of green growth. Viability gap funding (VGF) support for battery storage projects, framework for pumped hydro storage and renewable energy evacuation infrastructure for 13 GW RE are welcome steps."
Battery storage, or battery energy storage systems (BESS), are devices that enable energy from renewables, like solar and wind, to be stored and released when power demand peaks.
As India scales up its renewable energy capacity, battery storage systems are gaining importance as a solution to reduce the intermittency of renewable energy projects to provide continuous power.
In July 2022, India added an energy storage obligation to its Renewable Purchase Obligation policy.
India has set a target to have an installed capacity of 500 GW of green energy by 2030. It also aims to achieve Net Zero by 2070.
India had got 165.94 GW renewable energy capacity till October 2022 against the target of 175 GW by 2022.
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