INDUSTRY
Government unveils VGF of Rs 5,400 crore to boost 30-gwh of BESS
- IBJ Bureau
- Jun 11, 2025
The government has announced a viability gap funding (VGF) worth Rs 5,400 crore for developing 30-gwh of new battery energy storage systems (BESS) to ensure round-the-clock renewable energy capacity in the country.
Announcing the scheme, Union Minister for Power Manohar Lal Khattar has said that it will be in addition to the already existing incentive worth Rs 3,700 crore. Currently, 13.2 gwh of BESS is under implementation. The new initiative is expected to attract investments worth Rs 33,000 crore.
The VGF will be provided from the Power System Development Fund (PSDF). The scheme is targeted at 15 States which will receive allocations of 25 gwh, while NTPC will get 5 gwh. Mr Khattar has said that the first round of tender for the new VGF will be floated within 3 months.
So far, storage projects with a cumulative capacity of about 5.4 gw have been awarded, taking the eight pump storage projects under implementation to 10 gw. Additionally, two projects with total capacity of 2.5 gw are under bidding.
The government has rolled out ultra-high-voltage alternating current transmission system to improve the transmission infrastructure and has identified nine lines of 1,100 kv for development by 2034. “Testing facilities for these lines and equipment are being developed by Central Power Research Institute,” Mr Kattar has added.
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