India Targets 30 GWh BESS Expansion with New ₹5,400 Cr VGF

The Central Government will provide an additional ₹5,400 crore in Viability Gap Funding (VGF) to support the development of 30 GWh of Battery Energy Storage Systems (BESS), Union Power Minister Manohar Lal Khattar announced. This comes on top of the existing ₹3,700 crore incentive for 13.2 GWh of BESS projects currently underway, aiming to attract ₹33,000 crore in private sector investment.

The new VGF will be distributed via the Power System Development Fund (PSDF), with 25 GWh allocated across 15 states and 5 GWh to NTPC. The first tender is expected within three months.

To further promote storage projects, the Centre has extended the 100% waiver on inter-state transmission (ISTS) charges for BESS and pumped storage projects commissioned before June 30, 2028.

Additionally, ₹53,000 crore will be invested in Ultra High Voltage Alternating Current (UHVAC) transmission infrastructure, including nine 1,100 kV lines targeted for completion by 2034. To accelerate implementation, Right of Way (RoW) compensation has been enhanced—tower area compensation now stands at 200% of land value, and RoW corridor compensation at 30%.

News by Rahul Yelligetti.