The Union Cabinet has cleared a viability gap funding scheme to build 92 GWh of grid-scale storage, with pumped hydro receiving the largest share of capacity.

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• The Union Cabinet approved the scheme on 4 November 2026, providing Rs 14,500 crore (Rs 145 billion) in viability gap funding.
• Financial support will run over five financial years, from 2026-27 to 2030-31.
• The scheme targets 92 GWh of new grid-scale energy storage capacity.
• It supports India's estimated need for 411 GWh of grid-scale energy storage capacity by 2031-32.
• Of the 92 GWh, 60 GWh is envisaged from hydro pumped storage plants.
• Another 30 GWh is planned from battery energy storage systems, and 2 GWh from alternative storage technologies.
• The projects are expected to attract about Rs 976 billion in investment.
• Capacity will be allocated through tariff-based competitive bidding.
• Public and private distribution companies will be eligible for VGF support for battery and pumped storage projects.
• Alternative storage technology projects will be implemented by public and private sector entities.
• Battery energy storage projects must meet a minimum 40 per cent domestic content requirement to promote indigenous manufacturing.
• Storage is central to balancing the grid as renewable energy's share of power generation rises.