Cabinet approves Rs 14,500 crore viability gap funding for 92 GWh of grid-scale energy storage
The Union Cabinet has approved a Rs 14,500 crore viability gap funding scheme to help build 92 GWh of new grid-scale storage between FY 2026-27 and FY 2030-31. Most of the capacity is pumped hydro, with 30 GWh of batteries that must meet a 40% domestic content requirement.
Why it matters. It is the largest storage subsidy programme so far and puts discoms at the centre of procurement, while the 40% domestic content rule shapes which battery suppliers can compete.
What changes
- Total support of Rs 14,500 crore over FY 2026-27 to FY 2030-31, against an estimated Rs 97,600 crore of investment.
- Capacity split: 60 GWh pumped storage, 30 GWh battery storage and 2 GWh of alternative storage technologies.
- Capacity will be allocated through tariff-based competitive bidding.
- Public and private discoms are eligible for support on battery and pumped storage projects; alternative-technology projects can be built by public or private entities.
- Battery projects must meet a minimum 40% domestic content requirement.
- The government says the scheme adds capacity equal to about 170% of today's grid-scale storage, towards a 411 GWh requirement by 2031-32.
Who is affected
Discoms · BESS developers · Pumped storage developers · Battery manufacturers
Sources
- PIB, Cabinet approves Rs 14,500 crore VGF scheme for 92 GWh storage, 4 Nov 2026OFFICIAL
- Business Standard, 4 Nov 2026
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