India’s New Battery Energy Storage Initiative
India is advancing its renewable energy goals with a new funding package for battery energy storage systems. The government plans to invest ₹5,400 crore to set up a 30 GWh capacity. This initiative complements an existing ₹3,700 crore incentive for 13.2 GWh of storage. The total investment is expected to reach ₹33,000 crore. The initiative aims to ensure round-the-clock renewable energy supply and enhance grid stability.
Viability Gap Funding (VGF)
The VGF program is designed to support infrastructure projects that may not be financially viable without government assistance. The additional ₹5,400 crore will be allocated for battery energy storage. This funding aims to attract private investments and stimulate the energy sector.
Battery Energy Storage Systems (BESS)
BESS is crucial for managing the intermittent nature of renewable energy. With increasing solar and wind capacities, energy storage solutions are essential to provide power during peak demand. BESS allows for energy to be stored when production exceeds demand and released when needed.
Pumped Storage Projects (PSPs)
PSPs are a type of hydroelectric power generation that uses two reservoirs at different elevations. Water is pumped to the higher reservoir during low demand and released to generate electricity during high demand. This method acts as a large-scale battery.
Inter-State Transmission System Charges Waiver
The government has extended the 100% waiver on inter-state transmission charges for BESS until June 30, 2028. This exemption applies to both pumped storage projects and battery systems. It aims to encourage investment in energy storage infrastructure.
Ultra High Voltage Alternating Current (UHVAC) System
The UHVAC transmission system will receive ₹53,000 crore for infrastructure enhancement. Nine high-voltage lines have been identified for development by 2034. This system will improve grid reliability and facilitate the integration of renewable energy sources.
Compensation Structure Revision
The compensation structure under the Right of Way (RoW) rules has been revised. Compensation for land used for towers has increased . This change aims to expedite infrastructure rollout and ensure fair compensation for landowners.
Future Energy Storage Needs
The Central Electricity Authority estimates that India will require 37 GWh of BESS by 2027 and 236 GWh by 2031-32. The new funding package is a step towards achieving these targets. By FY28, India aims for a BESS capacity of 43.2 GWh.
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