Union Cabinet Approves ₹14,500-Crore VGF Scheme to Support 92 GWh Grid-Scale Energy Storage Capacity

Why in the News?

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved a **₹14,500 crore Viability Gap Funding (VGF)** scheme to support the development of **92 Gigawatt-hours (GWh)** of grid-scale energy storage capacity across India.

Key Features / Major Points:

- Timeline & Target Distribution:

- Implementation Window: **FY 2026-27 to FY 2030-31**.

- Capacity Breakdown (Total 92 GWh):

- **60 GWh:** Hydro Pumped Storage Projects (**PSPs**)

- **30 GWh:** Battery Energy Storage Systems (**BESS**)

- **2 GWh:** Emerging Energy Storage Technologies

- Investment & Expansion Impact:

- Expected to attract an estimated investment of **₹97,600 crore**.

- Adds capacity equivalent to ~170% of India's existing grid-scale energy storage, contributing toward the national projection of **411 GWh required by 2031-32**.

- Domestic Content Requirement (DCR):

- BESS projects mandate a minimum **Domestic Content Requirement (DCR) of 40%** to encourage local manufacturing and reduce import reliance.

- Allocation Process:

- Capacity will be allocated via a transparent tariff-based competitive bidding process open to public and private electricity distribution entities.

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Static GK Facts:

- Ministry of New and Renewable Energy (MNRE):

- Cabinet Minister: **Pralhad Joshi**.

- Viability Gap Funding (VGF):

- A financial grant provided by the government to support infrastructure projects that are economically justified but lack financial viability.

- National Renewable Energy Goals:

- Achieving 500 GW of non-fossil fuel capacity by 2030 and Net-Zero by 2070.

One-Liner Quiz (All Competitive Exams):

Q: What is the outlay approved by the Union Cabinet for the Viability Gap Funding (VGF) scheme to develop 92 GWh energy storage?

A: ₹14,500 Crore

Q: What minimum Domestic Content Requirement (DCR) has been mandated for Battery Energy Storage System (BESS) projects under this scheme?

A: 40%

Q: What is India's projected total grid-scale energy storage requirement by 2031-32?

A: 411 GWh

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