Union Cabinet Greenlights ₹14,500 Crore Energy Storage Initiative
The Indian government has approved a significant funding scheme aimed at enhancing energy storage capacity to support renewable energy integration.
The scheme allocates ₹14,500 crore for developing 92 GWh of energy storage by FY31.
It includes 60 GWh of pumped hydro storage and 30 GWh of battery systems.
The initiative aims to meet 22% of India's projected energy storage needs by FY32.
On November 4, the Union Cabinet approved a substantial ₹14,500 crore viability gap funding scheme designed to bolster India's energy storage infrastructure. This initiative aims to develop 92 GWh of grid-scale energy storage capacity by the fiscal year 2030-31, facilitating the integration of renewable energy sources into the national electricity grid.
The approved scheme encompasses the establishment of 60 GWh of pumped hydro storage, 30 GWh of battery energy storage systems (BESS), and 2 GWh of alternative storage technologies. The total investment for these projects is anticipated to reach ₹97,600 crore, with government support extending from FY27 to FY31. This move is crucial for enhancing the financial viability of large-scale storage projects, which play a vital role in managing the variable generation of solar and wind energy, ensuring a consistent power supply.
According to the Central Electricity Authority's National Electricity Plan, India will require 411.4 GWh of energy storage capacity by 2031-32, with a significant portion allocated to battery energy storage systems and pumped hydro storage. The newly approved capacity of 92 GWh under this scheme is expected to fulfill approximately 22% of the projected storage requirement by FY32, addressing the growing demand for energy storage solutions.
The implementation of the scheme will involve a tariff-based competitive bidding process for allocating energy storage capacity. Both public and private sector electricity distribution companies will be eligible for viability gap funding for battery storage and pumped hydro projects. Additionally, projects utilizing alternative storage technologies can be executed by various entities, promoting a diverse approach to energy storage.
In an effort to boost domestic manufacturing, the scheme mandates that battery storage projects meet a minimum domestic content requirement of 40%. This provision aims to foster local industry growth and reduce reliance on imported components. The government's initiative to enhance energy storage capabilities is timely, given the increasing renewable energy capacity and the necessity for a more flexible power grid. The Cabinet's approval is expected to significantly improve grid stability, facilitate renewable energy integration, and ensure the availability of reliable power around the clock.
