Instruments & Regulations

Union Cabinet approves VGF for Battery Energy Storage Systems

Dishant Rathee

Notable because

As the share of variable RE increases, the need for solutions to balance its intermittent nature grows. In FY 23, RE (including hydro) accounted for 22.8% of India's electricity generation. As per the RPO trajectory, it needs to grow ~2x to reach 43.3% by 2030. As most of the growth is expected to be dominated by variable RE, BESS could be one of the ways to enhance grid stability and maximise RE generation.

What to look out for in the months ahead

Is VGF sufficient to achieve the desired levelised cost of storage (LCOS) to make the technology financially viable?

Will this VGF be sufficient to mobilise capital to fund 208 GWh of BESS by 2030, as projected by the Central Electricity Authority (CEA)?