New Delhi: The government has finalised the structure for operationalising the scheme for Viability Gap Funding (VGF) for the development of Battery Energy Storage Systems (BESS) with capacity of 4,000 Megawatt Hours (MWh). Union Minister for Power and New & Renewable Energy RK Singh chaired a meeting in New Delhi on February 22 where senior officers from the Ministry of Power, Ministry of New & Renewable Energy, Central Electricity Authority, Solar Energy Corporation of India, Grid India and NTPC Vidyut Vyapar Nigam Ltd (NVVN) were present.
Various models for procuring the BESS, such as those based on energy contracts and capacity contracts, were discussed in the meeting. The pros and cons of these models were discussed, along with the challenges associated with their implementation. Various sites in states rich in renewable energy were discussed as potential locations for BESS, in order to get maximum benefit from the storage system. More details on what was decided are yet to emerge.
Addressing the officers, the minister said that the price of BESS has come down in recent years. He stated that the government will encourage the setting up of BESS capacity to meet the fast-growing needs of power demand as well as for energy transition. The minister stated that a situation will arise in the future where we have extra solar energy during the day and extra wind energy during the evening, which would go waste if adequate storage system is not deployed to store and utilise it when needed. Noting that the role of government is to create enabling structures so that investment can come in, the minister said that he wants this system to fructify in a manner which provides energy at those times of the day and year when the nation needs it the most.
It was discussed that the BESS should be able to deliver electricity during periods of peak demand while at the same time stabilising the grid. The power shall be supplied through different market segments in power exchanges. The charging of BESS would be done primarily from renewable sources during times when power generated from solar and wind sources is available.