The Ministry of Power (MoP) has issued amendments to the operational guidelines of the Viability Gap Funding (VGF) program for Battery Energy Storage System (BESS) projects, which are supported through the Power System Development Fund (PSDF).

The Ministry issued the operational guidelines for the ₹94 billion (~$1.1 billion) program to provide VGF of up to 40% to develop 4,000 MWh of BESS capacity across the country.

One amendment allows BESS projects to be connected to either the Intra-State Transmission System (InSTS) or the Inter-State Transmission System (ISTS).

The responsibility for arranging grid connectivity and land for the project will be defined clearly in the Request for Selection (RfS) document to be issued for each project.

A new clause has been inserted into the guidelines mandating that the application software for the Energy Management System used in the BESS must be developed in India. This requirement is aimed at promoting domestic technological development in the battery storage sector and reducing dependence on foreign software platforms.

Another significant change is the insertion of a sub-clause that makes it mandatory for the renewable energy implementing agency to ensure that the BESS used in the project meets the requisite quality standards based on the best practices in the industry. It strictly prohibits the use of refurbished battery cells in the execution of any project.

Recently, the government announced the second tranche of the VGF program to support the development of BESS in India. Under this tranche, a VGF of ₹1.8 million (~$21,043)/MWh will be provided to support the development of 30 GWh of BESS capacity.

Of the proposed 30 GWh, 25 GWh of storage capacity has been allocated across 15 states to help them address their energy storage requirements. NTPC will develop the remaining 5 GWh. The VGF will be disbursed in three stages.