VIABILITY GAP FUNDING FOR BATTERY ENERGY STORAGE - SCI & TECH
News:
Union Cabinet approves
₹3,760 crore viability gap funding to boost battery energy storage
What's
in the news?
●
The Union Cabinet approved a ₹3,760 crore
viability gap fund (VGF) grants aimed at enhancing the viability of
infrastructure projects for battery energy storage systems (BESS), in a boost for the renewable energy sector
that banks on storage when green power generation is low or down.
Viability
Gap Funding (VGF) for Battery Energy Storage:
●
The Union Cabinet has sanctioned a
Viability Gap Funding (VGF) Scheme to facilitate the development of Battery
Energy Storage Systems (BESS).
Battery
Energy Storage Systems (BESS):
●
Battery storage or battery energy storage
systems (BESS) are devices that enable
energy from renewables, like solar and wind, to be stored and then released
when the power is needed most.
●
India needs to develop BESS for making
round-the-clock renewable energy supply possible.
Viability
Gap Funding (VGF):
●
Viability Gap Finance means a grant to
support projects that are economically justified but not financially viable.
●
Viability Gap Funding is provided as a grant
one-time or deferred with the objective of making a project commercially
viable.
Scheme
for VGF for development of BESS:
Aim:
●
To harness the potential of renewable
energy sources such as solar and wind power with the aim to provide clean,
reliable, and affordable electricity to the citizens.
Target:
●
The scheme envisages development of 4,000 MWh of BESS projects by 2030-31.
Financial
support:
●
Up
to 40% of the capital cost will be supported in the form of
Viability Gap Funding (VGF).
●
The entire viability gap funding (VGF)
will be borne by the central government.
●
The VGF shall be disbursed in 5 tranches
linked with the various stages of implementation of BESS projects.
●
To ensure that the benefits of the scheme
reach the consumers, a minimum of 85% of the BESS project capacity will be made
available to Distribution Companies (Discoms).