Cabinet Approves Viability Gap Funding for Development of 4000 MWh BESS Projects
The VGF for the development of the BESS Scheme, with an initial outlay of INR 9,400 crore, comprising assistance of INR 3,760 crore, highlights the government's pledge to sustainable energy solutions.
September 06, 2023. By EI News Network
The approved scheme involves the development of 4,000 MWh of BESS projects by 2030-31, with financial assistance of up to 40 percent of the capital cost as budgetary support in the form of Viability Gap Funding (VGF).
The scheme was formulated to tap the potential of RE sources like solar and wind power, the scheme intends to facilitate clean, reliable, and cost-efficient electricity to the masses.
The VGF for the development of the BESS Scheme, with an initial outlay of INR 9,400 crore, comprising budgetary assistance of INR 3,760 crore, highlights the government's commitment to sustainable energy solutions.
By providing VGF support, the scheme targets attaining a Levelized Cost of Storage (LCoS) varying from INR 5.50-6.60 per kilowatt-hour (kWh), making stored RE a viable option for managing peak power demand across the country. The VGF shall be disbursed in five tranches connected with the multiple stages of execution of BESS projects.
The selection of BESS developers for VGF grants will be executed through a competitive tendering process, boosting both public and private sector entities. This approach will promote healthy competition and encourage the growth of a strong ecosystem for BESS, captivating significant outlays and creating opportunities for related industries.
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