India’s Ministry of Power has launched the second phase of its Viability Gap Funding (VGF) scheme to support 30 GWh of Battery Energy Storage Systems (BESS), with a budget of INR 5.4 billion. The funding will be sourced from the Power System Development Fund, aiming to enhance energy storage across the country.

The scheme will provide financial assistance to 15 states and the National Thermal Power Corporation (NTPC). Each project will receive INR 1.8 million per MWh. Of the 30 GWh total, 25 GWh will be allocated to the 15 states to address their energy storage demands, while 5 GWh will support NTPC in improving thermal generation and transmission infrastructure, ensuring reliable electricity supply during non-solar hours.

The state-wise allocation is as follows: Rajasthan, Gujarat, and Maharashtra will each receive 4 GWh; Karnataka and Andhra Pradesh will get 2 GWh each; Tamil Nadu, Madhya Pradesh, Telangana, and Uttar Pradesh will be assigned 1.5 GWh each; and Haryana, Kerala, Punjab, Chhattisgarh, Odisha, and Uttarakhand will each receive 500 MWh.

Funding will be disbursed in three phases: 20% upon project financial closure, 50% upon commissioning, and 30% one year after commissioning. Projects must be operational within 18 months from signing the Battery Energy Storage Purchase Agreement (BESPA) or Power Purchase Agreement (PPA). A tariff-based competitive bidding process will determine project awards.

The Central Electricity Authority (CEA) estimates India needs 37 GWh of BESS by 2027 and 236 GWh by 2031-32. Currently, 13.2 GWh of BESS capacity has been approved under the VGF scheme. The initiative reflects India’s commitment to strengthening its energy infrastructure.

by pv magazine