Energy storage is the missing link in India's renewable energy transition. Examine the role of VGF and PLI-ACC schemes in building a domestic BESS ecosystem.

Solar and wind power is generated only when the sun shines or the wind blows. Storage moves that power to the hours when demand peaks. The National Electricity Plan (2023) projects that India needs 208 GWh of Battery Energy Storage Systems (BESS) by 2030 [1]. Two schemes work on the two halves of this gap: VGF creates demand for storage, and PLI-ACC builds supply.

Role of VGF (Ministry of Power): creating demand

• Capital support: pays up to 40% of capital cost. Two schemes (March 2024 and June 2025) cover about 43.8 GWh [1].
• Price discovery: storage cost was ₹10.18/kWh in a 2023 bid [2]. It has since fallen to about ₹2.1/kWh without VGF at two cycles a day [3]. This proves that storage is commercially viable.
• Grid anchoring: at least 85% of power must first be offered to Discoms, which links storage to state utilities' peak-hour needs [4].

Role of PLI-ACC (Ministry of Heavy Industries): creating supply

• Cell manufacturing: ₹18,100 crore outlay for 50 GWh of Advanced Chemistry Cell capacity, with more than 10 GWh set aside for grid-scale storage [1].
• Indigenisation: it moves India from assembling imported cells into packs towards making the cells at home [1].
• Course correction: a global tender has been issued for the remaining 10 GWh [6].

Gaps in the ecosystem

• Slow execution: 40 GWh has been awarded, but only Ola's 1 GWh plant was in pilot production. The government cites lack of technology, a shortage of skilled workers, imported machinery and missing upstream components [5].
• Narrow coverage: the Discom-first rule leaves captive storage (e.g. telecom towers, industrial backup) outside VGF support [4].
• Fragmented governance: PLI (Heavy Industries), VGF (Power) and ESS guidelines (MNRE) sit in three different ministries [7].

VGF → assured demand ─┐
                      ├─→ domestic BESS ecosystem → RE integration
PLI-ACC → local cells ┘

Fig.: The two schemes complement each other

Together, VGF and PLI-ACC tackle both demand and supply in India's storage market. To complete the ecosystem, India needs a single coordinated storage mission, a gradual link between VGF tenders and domestically made cells, support for skilling and machinery, and a clear framework for distributed storage. Executed well, storage can bridge the gap in India's transition to clean energy and advance SDG 7 (affordable and clean energy).