Cabinet approves Rs 3,760 crore viability fund for battery systems; What is BESS and why is it needed
battery energy storage systems in the country, offering up to 40% of the capital cost of the project. The government has set aside Rs3,760 crore from this year's budget for the scheme aimed at creating 4,000 megawatt hours (MWh) battery energy storage systems (BESS) by 2030-31.
«India has planned to have 50% of its total energy share from non-fossil fuels by 2030.
So, to make renewable energy more viable, we need to strengthen the BESS,» information and broadcasting minister Anurag Thakur said after the cabinet meeting.
With the VGF support, the scheme aims to achieve a levelised cost of storage of Rs5.50-6.60 per unit, which will help in making stored renewable energy a viable option for managing peak power demand.
The viability gap funds will be released in five tranches till 2030-31 and a minimum of 85% of the BESS project capacity will be made available to power distribution companies.
Project developers would be selected through a competitive bidding process.
The scheme was first announced in the union budget with an initial outlay of Rs9,400 crore.
The scheme will boost the integration of renewable energy into the electricity grid, optimise utilisation of transmission networks, and reduce the need for costly infrastructure upgrades, the government said.
The VGF scheme for the development of BESS is a much-required intervention for mobilising the first wave of such projects and enabling larger renewable energy installations, said Anish Mandal, partner at Deloitte India.
He said current costs have prohibited Indian utilities and developers from scaling up BESS deployment.
What is BESS system?
Interconnected rechargeable batteries to store energy and discharge when needed. They can also be used to balance the electric
