The Union Cabinet, chaired by the Prime Minister of India, has given the green light to a Scheme for Viability Gap Funding (VGF) to promote the development of Battery Energy Storage Systems (BESS). Under this scheme, 4,000 MWh of BESS projects are to be developed by 2030-31. The government will provide up to 40% of the capital cost as VGF, disbursed in five tranches during project implementation. This support aims to achieve a competitive Levelized Cost of Storage (LCoS), making stored renewable energy economically viable for managing peak power demand. Distribution Companies (Discoms) will benefit from 85% of the BESS project capacity. BESS will enhance renewable energy integration into the grid, reduce wastage, and minimize infrastructure upgrade costs. A transparent competitive bidding process will facilitate BESS project selection.
Facts/Terms for UPSC Prelims
- Levelized Cost of Storage (LCoS): LCoS is a metric used to assess the cost of storing energy over the lifetime of a battery storage system, typically expressed in rupees per kilowatt-hour (kWh).
- Distribution Companies (Discoms): These are entities responsible for distributing electricity to end-users, such as homes and businesses, within a specific region or area.
- Transparent Competitive Bidding Process: A method for selecting BESS developers in a fair and open manner, encouraging both public and private sector participation while preventing favoritism.
- Robust Ecosystem for BESS: An interconnected and thriving environment that supports the development, deployment, and operation of Battery Energy Storage Systems, attracting investments and fostering associated industries.
- Renewable Energy Integration: The process of smoothly incorporating energy generated from renewable sources like solar and wind into the existing electrical grid, ensuring a stable and reliable power supply.
