Govt Awards 12.7 GWh of Battery Storage Capacity Under Budgetary VGF Scheme

The government has issued Letters of Award (LoAs) for 12.7 GWh of battery storage capacity under its budgetary-support Viability Gap Funding (VGF) scheme, of which purchase agreements have been executed and financial closure achieved for 6.54 GWh, while 0.5 GWh has been commissioned and Rs 1680.4 million of VGF disbursed, Minister of State for Power Shripad Naik told the Rajya Sabha in a written reply on Monday.

The budgetary-support scheme was approved for 4 GWh with an outlay of Rs 37.60 billion, and the supported capacity was later raised to 13.8 GWh within the same outlay "owing to the decline in BESS prices," Naik said.

The second scheme, initiated through an order dated June 9, 2025, provides for 30 GWh of BESS with Rs 54 billion of support from the Power System Development Fund (PSDF). Of this, 25 GWh has been allocated to 15 states for their storage requirements and 5 GWh to NTPC Ltd to support demand during non-solar hours and, "optimize the utilization of existing thermal and transmission infrastructure," said Naik in the written response.

Under this scheme, LoAs have been issued for 22.43 GWh and Battery Energy Storage Purchase Agreements (BESPAs) executed for 19.65 GWh, with financial closure achieved for 5 GWh and a sanction issued to disburse Rs 1.80 billion of VGF, Naik said.