CO2 reduction through battery system
During a meeting held in September 2023, the Union Cabinet in India approved a Viability Gap Financing (VGF) scheme for the development of battery energy storage systems (BESS) with substantial capacity of 4,000 MWh.
The approval of this plan, which will cover a period of three years, from 2023-24 to 2025-26, will involve the allocation of funds in five tranches that will extend until the fiscal year 2030-31. The information was released by Union Minister for Power and New and Renewable Energy, RK Singh, in response to a question asked in Rajya Sabha on December 5, 2023.
Emphasizing the government’s commitment, Singh announced that the Central Government will provide VGF covering up to 40% of the capital cost of BESS. The selection of public and private entities to carry out the development of BESS will be carried out through a competitive bidding process supervised by the Implementation Agency in accordance with the Scheme and Tender Guidelines.
Anticipating a capital cost to vary between INR 2.40 and INR 2.20 crore/MWh over the development period, the estimated total investment for the 4,000 MWh BESS capacity stands at INR 9,400 crore, with substantial budgetary support from INR 3760 crores. A key environmental benefit of this initiative is the projected annual reduction of around 1.3 million metric tons of carbon emissions , assuming BESS load comes from renewable energy (RE) sources.
Additionally, the BESS capacity of 4,000 MWh will contribute to greater availability of up to 4,000 MWh of energy during peak hours. This energy can be used efficiently by distribution companies and other beneficiaries, adapting it to their particular consumption patterns.
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