Union Power and New & Renewable Energy Minister: 85% of Power from VGF-funded Battery Energy Storage Systems to Prioritize Discoms Before Wider Distribution

The Union Minister for Power and New & Renewable Energy has informed that the Government has approved the scheme for Viability Gap Funding (VGF) for development of Battery Energy Storage Systems (BESS) with capacity of 4,000 megawatts hours (MWh).

Under the scheme, VGF to the extent of up to 40% of capital cost for BESS shall be provided by the Central Government. Public and private sector entities shall be selected through the bidding process to be conducted by the Implementing Agency(ies) as per the provisions of the Scheme and Bidding Guidelines for the development of BESS.

The projects under the scheme will be approved during a period of 3 years (2023-24 to 2025-26) and for passing on the scheme to consumers of the Discoms, at least 85% of the power from VGF-funded BESS projects shall be first offered to Discoms before making it available for others.

The selection of developers under the VGF scheme has not commenced yet.