Union Cabinet approves Rs 17,500 crore viability gap funding for power storage

The Union Cabinet approved a viability gap funding scheme with a financial outlay of Rs 17,500 crore from 2026-27 to 2030-31 to promote grid-scale energy storage systems.

The government aims to develop 92 gigawatt-hours of storage capacity, consisting of 30 GWh from battery energy storage systems, 60 GWh from pumped hydro storage, and 2 GWh from alternative technologies.

Projects will be allocated through tariff-based competitive bidding, with battery projects subject to a 40 percent domestic content requirement to boost indigenous manufacturing.