Cabinet approves Rs.14,500 crore Energy Storage VGF Scheme
Cabinet · Infrastructure · Posted 04 NOV 2026 3:27PM
What happened
The Union Cabinet approved a Rs.14,500 crore Viability Gap Funding (VGF) scheme for FY 2026-27 to FY 2030-31 to develop 92 GWh of Grid-Scale Energy Storage Systems. The initiative targets 60 GWh of pumped storage, 30 GWh of battery storage, and 2 GWh of alternative technologies to enhance grid stability and renewable energy integration.
Why it matters for UPSC
This scheme is significant for UPSC aspirants studying infrastructure and energy security under GS Paper III, as it addresses the core challenges of renewable energy integration, grid stability, and domestic manufacturing promotion (Atmanirbhar Bharat).
Key objectives
- Allocate Rs.14,500 crore in financial support for FY 2026-27 to FY 2030-31 to develop 92 GWh of grid-scale energy storage systems.
- Support the development of 60 GWh of Hydro Pumped Storage Plants, 30 GWh of Battery Energy Storage Systems (BESS), and 2 GWh of alternative technologies.
- Enforce a minimum Domestic Content Requirement (DCR) of 40% for BESS projects to promote indigenous manufacturing and reduce import dependence.
- Allocate storage capacity via tariff-based competitive bidding to improve financial viability and accelerate infrastructure deployment.