India Subsidizes $631.5 million for 30GWh Energy Storage Systems

Image: Mercom

To support the development of energy storage systems, India's Ministry of Power has announced the second installment of Viability Gap Funding (VGF).

The total outlay for this funding is INR 54 billion($631.5 million) from the Power System Development Fund (PSDF) to support INR 1.8 million ($21,043) per MWh of energy storage systems.

Of the 30GWh of energy storage systems to be developed, 25GWh of storage capacity has been allocated to 15 states to help them meet their energy storage needs, and NTPC will develop the remaining 5GWh.

Such an allocation plan maximizes the use of NTPC's existing thermal power generation and transmission infrastructure and ensures the availability of a reliable and cost-effective supply of power during non-solar hours.

In September 2023, the government approved the first tranche of funding for the VGF program with an allocation of INR 94 billion ($1.09 billion), of which INR 37.6 billion ($439.58 million) was disbursed directly from the government exchequer.

With the two batches of VGF funding, India is using fiscal leverage to leverage the rapid deployment of energy storage systems, a move that signals a policy-driven burst cycle for the Indian energy storage industry.