The Union Cabinet has cleared a five-year funding scheme to build battery and pumped storage capacity that helps the grid absorb more renewable power.

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• The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the Viability Gap Funding scheme for grid-scale energy storage systems on 4 November 2026.
• The scheme carries financial support of ₹14,500 crore for the period 2026-27 to 2030-31.
• It targets 92 GWh of new storage capacity that is yet to be commissioned, equal to 170% of existing grid-scale storage capacity.
• The target splits into 60 GWh of pumped storage projects, 30 GWh of battery energy storage systems and 2 GWh of emerging storage technologies.
• The projects are expected to attract an estimated investment of ₹97,600 crore.
• Public and private sector power distribution companies are eligible for support for battery and pumped storage projects.
• Viability gap funding is a one-time capital grant for infrastructure projects that are economically essential but financially unviable.
• The scheme is meant to accelerate renewable energy integration, strengthen grid stability and ensure reliable round-the-clock power supply.
• It is also expected to boost domestic manufacturing of battery energy storage systems and reduce import dependence.
• The decision supports India's target of 500 GW of renewable energy capacity by 2030.
• Union Minister Ashwini Vaishnaw announced the decision after the same Cabinet meeting approved ₹2,814 crore for critical mineral processing.

Tags: EnergyStorage, ViabilityGapFunding, PumpedStorage