"Energy storage is the missing link in India's renewable energy transition." Examine the role of Battery Energy Storage Systems and the Viability Gap Funding approach in addressing it.

The Standing Committee on Energy (2025) found that India has only about 5.5 GW of storage against 243 GW of renewables. It projects a need for about 61 GW by 2030 [6]. Battery Energy Storage Systems (BESS) can close this gap. Viability Gap Funding (VGF) has started the market, but it cannot close the gap by itself.

Role of BESS

• Firming variable power: batteries store surplus solar output from midday and release it at the evening peak. They also help with frequency regulation and reduce curtailment (wasted solar and wind power). The National Electricity Plan 2023 estimates that 236 GWh of BESS will be needed by 2031-32 [2].
• Decarbonisation: 4,000 MWh of BESS is expected to cut emissions by about 1.3 MMT CO₂ a year [3].
• Grid efficiency: storage makes better use of existing transmission lines and delays costly upgrades [1].

Role of the VGF approach

• Bankability: in 2023 the Cabinet approved VGF of up to 40% of capital cost for 4,000 MWh. Developers are chosen through competitive bidding [1].
• Tapering support: VGF fell from ₹96 lakh/MWh to ₹46 lakh/MWh or 30% of capex, whichever is lower [2]. A 30 GWh scheme followed in June 2025, at ₹18 lakh/MWh and funded by ₹5,400 crore from the Power System Development Fund (PSDF) [5].
• Price discovery: tender prices fell from about ₹10.18/kWh (2022-23) to ₹2.1/kWh without VGF [4].
• Linking storage to DISCOMs: at least 85% of capacity must first be offered to DISCOMs [1].

Gaps that remain

• Scale: the VGF schemes together cover about 43 GWh, under a fifth of the 236 GWh needed [2][5].
• Buyer risk: DISCOMs delay signing power purchase agreements and miss their Renewable Consumption Obligations [6].
• Utilisation: the ₹2.1 figure assumes the battery runs two cycles a day [4].
• Import dependence: the Committee says high cost is the main barrier. It recommends R&D grants to build storage manufacturing in India [6].

Way forward: pay for storage through capacity-charge tenders, enforce RCO penalties, build storage into DISCOM procurement plans, and use pumped hydro alongside batteries.

BESS is the technical fix for the missing link, and VGF made the first projects viable. Since prices have collapsed, the next step depends more on reliable DISCOM buyers and domestic manufacturing than on grants. Getting this right would support India's 500 GW non-fossil target and SDG 7: affordable, reliable and clean energy for all.