Cabinet approves ₹14,500 crore scheme to add 92 GWh of grid-scale energy storage by 2031

The Union Cabinet on Wednesday approved a ₹14,500 crore viability gap funding (VGF) scheme to build 92 gigawatt-hours (GWh) of grid-scale energy storage, Energetica India and Mercom India reported. Storage lets the grid hold power from wind and solar and release it when the sun is down or the wind drops.

What the scheme covers

• 92 GWh in all: 30 GWh of battery storage, 60 GWh of pumped-hydro storage and 2 GWh of other storage technologies, both outlets reported.
• Period: from 2026-27 to 2030-31, according to Energetica India.
• Investment: about ₹97,600 crore is expected in total, Energetica India said.
• Scale: the 92 GWh is equal to 170% of India's existing grid-scale storage and will come from projects not yet commissioned, Energetica India reported. The government estimates India will need 411 GWh by 2031-32.

How the money will be given

Capacity will be allocated through tariff-based competitive bidding, Energetica India reported. Public and private electricity distribution companies can receive the funding for battery and pumped-storage projects, and public or private firms can build the alternative-technology projects. Battery projects must use at least 40% domestic content, which is meant to support Indian battery component makers, it said.

Why the government says it is needed

The scheme aims to offset the ups and downs of renewable power, improve how much of it is used, and reduce the need for conventional plants to balance the grid, Energetica India reported. It adds demand for storage to the incentives already offered to battery manufacturers.

Anujesh Dwivedi, a partner at Deloitte India, said: "The focus on pumped hydro, in addition to BESS and alternative technologies is the key highlight of the new VGF Scheme." Kannan Krishnan, managing director of Jakson Green, said: "Storage will convert intermittent renewables into round-the-clock power."

What is not yet known

The reports do not say how much support per unit the scheme will give, when the first bids will open, or which states will host the first projects. BDT will update this story when the Cabinet's official note and bidding guidelines are published.