Govt to offer Rs 3,760 cr as incentives to boost battery storage projects

Government to offer Rs 3,760 crore ($455.2 million) in incentives to companies that will be setting up battery storage projects.

Battery storage projects totaling 4,000 megawatt hours (MWh), were announced earlier this year, under a scheme, details of which are not known, a Reuters report said citing government sources.

The scheme aims to boost battery storage projects that are crucial to India's plan to expand its renewable energy capacity to 500 gigawatts (GW) by 2030. It also aims to cut the cost of battery energy storage from the current Rs 5.5-6.5 per unit.

Battery storage which is used to back up intermittent renewable power supply to stabilise the grid is an evolving technology, and there are very few large-scale operational projects in the world. 

The scheme also aims to develop large-scale battery energy storage systems to bring down costs through competitive bidding, the report added.

Through the scheme, it also expects private investments worth Rs 5,600 crore.

Citing sources, the report further stated that the government will also give the viability gap funding incentives in order to cover the risks of developers of critical infrastructure projects that are or may turn out to be economically unviable - in the form of grants for three years.

The disbursements of these contracts will be made in five tranches till 2030-31 and will be awarded through a competitive process, with the company with the lowest bid selected.

Power Secretary Alok Kumar said that India is committed to energy transitions while meeting the demands of energy security of its population. He further added that a battery storage scheme is a step in this direction and that the battery storage systems are an integral part of enabling the energy transition.

A number of Indian conglomerates including Reliance Industries, Adani Power, and JSW Energy have plans to set up large-scale battery plants, the report suggested.

(With inputs from Reuters)