Battery Infrastructure VGF Scheme

A viability gap funding (VGF) programme worth 3,760 crore recently received clearance from the Union Cabinet, advancing the development of battery energy storage systems (BESS).

Battery Infrastructure with VGF

  • By providing financial support of up to 40% of the capital cost in the form of VGF, this programme seeks to develop 4,000 megawatt hours (MWh) of BESS projects by the years 2030–31.
  • It is anticipated to reduce the price of battery storage, increasing its usefulness.
  • The plan, which makes use of renewable energy sources including solar and wind power, intends to give the general public access to safe, dependable, and affordable electricity.

How would it function?

  • The programme aims to achieve a levelized cost of storage (LCoS) of between $5.50 and $6.50 per kilowatt-hour (kWh) by providing VGF support.
  • Thus, it would make using stored renewable energy a practical solution for controlling the nation’s peak power demand.
  • Five stages of the VGF disbursement will correspond to major BESS project milestones.

Infrastructure and Consumer Gains

  • Distribution firms (Discoms) will get a minimum of 85% of the BESS project capacity in order to guarantee consumer advantages.
  • This approach minimises waste and optimises the use of the transmission network, improving the integration of renewable energy into the electrical grid and obviating the need for expensive infrastructure modifications.
  • By encouraging healthy competition and the expansion of the BESS ecosystem, this strategy attracts significant investment and creates opportunities for allied businesses.
And get notified everytime we publish a new blog post.