Cabinet Clears ₹14,500 Crore Scheme for 92 GWh of Energy Storage

In news

• The Union Cabinet (4 November 2026) approved Viability Gap Funding (VGF) of ₹14,500 crore for 92 GWh of grid-scale energy storage.
• Period: 2026-27 to 2030-31.
• Aim: store solar and wind power and supply it when demand peaks.

Key facts

Item	Detail
Central support	₹14,500 crore, as Viability Gap Funding
Total capacity	92 GWh
Pumped Storage Projects	60 GWh
Battery Energy Storage Systems	30 GWh
Emerging technologies	2 GWh
Expected investment	About ₹97,600 crore
Allocation	Tariff-based competitive bidding, with State governments
Domestic content	At least 40% for battery projects
Eligibility	Only projects not yet commissioned

Scale of the scheme

• India's present grid-scale storage: about 54 GWh.
• The new 92 GWh is about 170% of this.
• It meets about 22% of the 411.4 GWh storage India will need by 2031-32 (Central Electricity Authority, National Electricity Plan).

What is Viability Gap Funding?

• A one-time capital grant from the government.
• It covers part of the project cost, so that a useful but costly project becomes commercially viable.
• Result: storage projects can offer lower tariffs to power distribution companies.

What is energy storage?

• It means storing electricity when it is surplus and releasing it when it is needed.
• GW vs GWh:
  • GW (gigawatt) = how much power can flow at one moment.
  • GWh (gigawatt-hour) = how much energy is stored in total.
  • Example: a 1 GW system that runs for 4 hours stores 4 GWh.

Why India needs storage

• Solar peaks at noon. Demand peaks after sunset. Storage shifts noon power to the evening. This mismatch is called the "duck curve".
• Wind is seasonal and variable. Output changes hour to hour.
• Grid stability: the grid must stay at 50 Hz. Storage responds in seconds to balance supply and demand.
• Less waste: surplus solar is often switched off (curtailment). Storage saves it.
• Less coal at peak hours: costly thermal plants run less in the evening.
• Targets: 500 GW non-fossil capacity by 2030 and Net Zero by 2070.

Types of energy storage

Type	Examples	How it stores energy
Mechanical	Pumped hydro, compressed air, flywheel	As height of water, pressure of air or spinning motion
Electrochemical	Lithium-ion, sodium-ion, flow batteries	As chemical energy in cells
Thermal	Molten salt	As heat, released later to make steam
Chemical	Green hydrogen	Electricity splits water; hydrogen is stored and used later

Pumped storage vs battery storage

Feature	Pumped Storage Project	Battery Energy Storage System
How it works	Surplus power pumps water to an upper reservoir; water flows down through turbines at peak time	Electricity charges battery cells; cells discharge when needed
Duration	Long (about 6 to 10 hours)	Short (about 2 to 4 hours)
Life	40 years or more	About 10 to 15 years
Response	Minutes	Milliseconds
Build time	Long; needs hilly sites and two reservoirs	Short; can be placed almost anywhere
Concern	Land, forest and ecology	Import of lithium cells; battery waste

Earlier steps

• VGF for battery storage (2023): ₹3,760 crore for 4,000 MWh.
• VGF for battery storage (2025): ₹5,400 crore for 30 GWh, through the Power System Development Fund.
• PLI for Advanced Chemistry Cell batteries (2021): ₹18,100 crore for domestic cell manufacturing.
• The new scheme is wider: it covers pumped storage and new technologies too.

Andhra Pradesh link

• Pinnapuram (Andhra Pradesh): a large integrated solar, wind and pumped storage project by Greenko. It is a model for round-the-clock renewable power.

Challenges

• Pumped storage needs suitable sites, forest clearance and long construction time.
• Battery cells and lithium are mostly imported, largely from China.
• Storage adds to the cost of power until technology becomes cheaper.

Static connect

• Central Electricity Authority (CEA): prepares the National Electricity Plan under the Electricity Act, 2003.
• Panchamrit (COP26, Glasgow, 2021): 500 GW non-fossil capacity by 2030; Net Zero by 2070.
• Updated NDC (2022): 45% cut in emissions intensity of GDP by 2030 over 2005 levels; 50% of installed power capacity from non-fossil sources by 2030 (reached in 2025, five years early).

Exam relevance: UPSC Prelims and GS-3 (Energy, Infrastructure, Environment); TGPSC, APPSC (Economy, Science and Technology).