The India Energy Storage Alliance (IESA) has welcomed the government’s announcement of the second tranche of viability gap funding (VGF) aimed at advancing the development of standalone Battery Energy Storage Systems (BESS). This initiative supports the government’s ambitious target of deploying 30 GWh of energy storage across 15 states, with backing from NTPC. According to IESA, the program is set to attract investments worth Rs 33,000 crore, fulfilling India’s BESS needs by 2028.
IESA believes that the India Energy Storage Week 2025 will further propel this effort, bringing together global industry leaders, stakeholders, and investments. Under this phase, a VGF of Rs 18 lakh (USD 21,043)/MWh will be provided to help develop 30 GWh of BESS capacity.
The funding will come from the Power System Development Fund (PSDF), with a total financial outlay of Rs 5,400 crore (USD 631.30 million). The initiative will strengthen energy security and optimize the use of existing thermal generation and transmission infrastructure to meet power demand during non-solar hours.
With the demand for BESS expected to grow to 37 GWh by 2027 and 236 GWh by 2032, as per the Central Electricity Authority (CEA), the timely rollout of these measures is critical for India’s energy storage future. Vinayak Walimbe, Managing Director of Customized Energy Solutions (CES), commented, “This funding will not only spur investment but also foster innovation and collaboration in the energy sector.”
Debmalya Sen, President of IESA, added, “The requirement for signing the Power Supply Agreement (PSA) within nine months is a key development that will accelerate project implementation.” IESA is also hosting the 11th India Energy Storage Week (IESW) in Delhi from July 8-10, which aims to accelerate India’s energy transition and forge global partnerships to support the growth of battery energy storage systems (BESS) in India.
