The Union Cabinet, on this auspicious Wednesday, gave its resounding approval for a substantial sum of Rs 3,760 crore in Viability Gap Funding (VGF). This considerable allocation is designated for the establishment of a battery energy storage system, as eloquently disclosed by the esteemed Union Minister Anurag Thakur.
In his profound declaration, Minister Thakur expounded upon the significance of this initiative, elucidating its pivotal role in diminishing India’s reliance on fossil fuels. Furthermore, he gracefully conveyed that the financial responsibility for this innovative battery scheme shall be gracefully shouldered by the central government.
To instill confidence and fortify the trajectory of this endeavor, the VGF will be disbursed in a strategic manner, spread across five tranches, with a timeline extending to the fiscal year 2030-31. This strategic allocation is anticipated to pave the way for the creation of an impressive 4,000 MW hours of storage capacity.
Minister Thakur, in his enlightened wisdom, articulated that this infusion of Viability Gap Funding is poised to engender an overall investment of a staggering Rs 9,500 crore. This remarkable infusion shall breathe life into battery storage projects, which constitute a linchpin of India’s audacious vision to burgeon its renewable energy capacity to an astonishing 500 gigawatts by the dawn of 2030.
It is imperative to acknowledge that battery storage, a technology of immense promise, serves as the keystone in fortifying the grid by providing essential backup to intermittent renewable energy sources. The aim here is not merely to develop battery energy storage systems but to do so with a discerning eye on cost-effectiveness, with a goal to reduce the present unit cost of 5.5-6.5 rupees.
In a spirited endeavor to catalyze private investments in this noble undertaking, the scheme anticipates private investments amounting to an impressive 56 billion rupees.
The allocation of these contracts shall be conducted through a rigorous competitive process, with the utmost transparency. The selection process will favor those with the most prudent bids, further amplifying the spirit of competitiveness and efficiency.
This monumental endeavor finds resonance with various industrial giants such as Reliance Industries, Adani Power, and JSW Energy, each harboring aspirations to establish extensive battery plants on Indian soil.
It is noteworthy that the current battery storage capacity in India stands at a commendable 37 megawatt hours (MWh). However, projections made by the esteemed power sector planning body emphasize the need for an additional 236 gigawatt hours (GWh) of battery energy storage, alongside 27 gigawatts of pump storage projects by the culmination of the fiscal year 2031-32.
In conclusion, the Viability Gap Funding sanctioned by the Union Cabinet signifies a profound commitment towards bolstering India’s renewable energy aspirations and diversifying its energy portfolio. As the sun sets on the fossil fuel era, India’s ascendancy in the realm of renewable energy stands as a testament to its unwavering dedication to a sustainable and cleaner future.