Union Cabinet approves 14,500 crore rupee funding scheme to expand grid-scale energy storage

Scheme Details

The Union Cabinet has approved a Viability Gap Funding scheme worth 14,500 crore rupees to support grid-scale energy storage systems across the country. The funding covers the period from 2026-27 to 2030-31 and aims to build 92 gigawatt-hours of fresh energy storage capacity. The government estimates that this expansion will require a total investment of 97,600 crore rupees.

Project Breakdown

The approved plan will build 60 gigawatt-hours of hydro pumped storage plant capacity and 30 gigawatt-hours of battery energy storage system capacity. Another 2 gigawatt-hours will come from alternative energy storage technologies. Public and private sector electricity distribution companies can apply for this financial support through a competitive bidding process.

Manufacturing Rules

To boost local manufacturing, battery projects must follow a minimum domestic content requirement of 40 percent. This rule aims to help Indian industries and decrease reliance on imported parts. Overall, the new projects will add capacity equal to 170 percent of the country's current grid-scale storage.

Context

Large-scale energy storage is important for managing solar and wind power because these green energy sources produce electricity only when the sun shines or wind blows. Storing extra power when generation is high and releasing it when demand peaks helps keep the power grid stable.