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The Indian government has announced viability gap funding (VGF) of INR 54 billion ($631.5 million) to support 30 GWh of battery energy storage systems (BESS), allocating capacity among 15 states and the state-owned power producer NTPC. The scheme provides INR 1.8 million/MWh and requires projects to be commissioned within 18 months through competitive bidding. India’s Ministry of Power has announced the second tranche of its VGF scheme to support the development of 30 GWh of BESS, with a total budget of INR 5.4 billion. The funding will come from the Power System Development Fund. The scheme will provide financial support to 15 states and NTPC, allocating INR 1.8 million/MWh for each project. Of the total 30 GWh target, 25 GWh will be distributed among 15 states to meet their energy storage needs, while 5 GWh will be allocated to NTPC to optimize existing thermal generation and transmission infrastructure and supply electricity during non-solar hours reliably and cost-effectively. The state-wise allocation is as follows: Rajasthan, Gujarat, Maharashtra with 4 GWh each Karnataka, Andhra Pradesh with 2 GWh each Tamil Nadu, Madhya Pradesh, Telangana, Uttar Pradesh with 1.5 GWh each Haryana, Kerala, Punjab, Chhattisgarh, Odisha, Uttarakhand with 500 MWh each The VGF will be disbursed in three stages: 20% upon financial closure of the project 50% upon commissioning 30% after one year of operation from the commissioning date Projects must be commissioned within 18 months from the signing of the battery energy storage purchase agreement (BESPA) or power purchase agreement (PPA). The projects will be awarded through a tariff-based competitive bidding process. According to the Central Electricity Authority (CEA), India requires 37 GWh of BESS capacity by 2027 and 236 GWh by 2031-32. So far, 13.2 GWh of BESS capacity has been approved under the ongoing VGF scheme. |
