The Ministry of Power has increased the Battery Energy Storage System (BESS) capacity target under the Viability Gap Funding (VGF) program from 4,000 MWh to 13,200 MWh due to a decrease in storage costs.
All states and implementing agencies are required to award BESS contracts by June 2025. The VGF program initially aimed to support 4,000 MWh of BESS by 2028. The Indian government has increased its Battery Energy Storage System (BESS) target to 14,000 MWh.
reflecting its commitment to strengthening the renewable energy sector. This move comes as battery storage prices continue to decline, making large-scale storage solutions more viable and cost-effective.
The enhanced target is expected to global leader in clean energy storage solutions focusing on energy storage to enable a clean, resilient, and efficient power system. accelerate India’s transition to clean energy.
Ensuring grid stability and efficient power management. The decision to raise the BESS target from 4,000 MWh to 14,000 MWh is driven by several factors By addressing key challenges and accelerating infrastructure development, India is well-positioned to become a global leader in clean energy storage solutions.
- Declining Battery Prices – The cost of lithium-ion and other energy storage technologies has significantly decreased, making large-scale storage projects more affordable.
- Rising Renewable Energy Capacity – India is rapidly expanding its solar and wind power capacity, requiring reliable storage solutions to manage intermittency.
- Grid Stability Needs – With an increasing share of renewables in the energy mix, BESS will help ensure consistent power supply, reduce outages, and optimize electricity distribution.
- Government’s Net-Zero Goals – As part of its 2070 net-zero emissions target, India is focusing on energy storage to enable a clean, resilient, and efficient power system.
Impact of Falling Battery Prices
Over the last decade, battery storage costs have fallen by more than 80%, primarily due to technological advancements, mass production, and improved supply chains. The reduction in prices is expected to continue, further promoting the adoption of large-scale energy storage projects.
With storage becoming more affordable, it can be integrated with solar and wind farms, allowing for energy to be stored when production is high and released when demand peaks. This is crucial for ensuring round-the-clock renewable power availability.
Key Benefits of Scaling Up BESS in India
- Improved Renewable Energy Utilization – BESS helps store excess solar and wind power, ensuring uninterrupted clean energy supply even when production fluctuates.
- Enhanced Grid Reliability – Storage solutions provide backup power, reducing the risk of blackouts and grid instability.
- Reduction in Dependence on Coal & Diesel – With energy storage enabling consistent , India can decrease reliance on polluting thermal power sources. With declining storage costs, electricity prices are expected to benefiting both industries and consumers. The expanded BESS target will attract both domestic and international investments, fostering innovation and job creation in the renewable energy sector.
- Financial Incentives & Subsidies – Support for energy storage developers to reduce project costs. Encouraging large-scale storage deployment through government-backed funding mechanisms. Policies promoting energy storage integration with the national grid. Encouraging collaboration between government agencies, private companies, and international investors.
Challenges & the Road Ahead
Despite falling prices and policy support, the expansion of BESS in India faces challenges, includin Dependence on imported lithium and other raw materials. While prices are falling, upfront costs still remain significant. Upgrading transmission and distribution networks to effectively utilize storage solutions.
India’s decision to increase the BESS target to 14,000 MWh is a major step toward a sustainable energy future. With falling battery prices, strong government backing, and rising renewable energy capacity, large-scale storage adoption is set to transform India’s power landscape.
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