UPSC Prelims Practice Questions — Building bridges

Q1. With reference to the Viability Gap Funding (VGF) Scheme-II for Battery Energy Storage Systems (BESS) approved in June 2025, consider the following statements. Which of the above is/are NOT correct?

  1. The scheme supports development of 30 GWh of BESS capacity.
  2. The scheme is financed from the Power System Development Fund (PSDF).
  3. The viability gap funding under this scheme is capped at Rs 27 lakh per MWh.
  4. At least 50% of the power from VGF-funded BESS projects must first be offered to DISCOMs before being sold to others.
  • A. 1 and 2
  • B. 3 and 4
  • C. 1, 2 and 4
  • D. 3 only

Q2. The advisory issued in February 2025 mandating co-location of energy storage systems (equivalent to at least 10% of installed solar capacity, for a minimum of two hours) in future solar tenders was issued by which one of the following?

  • A. Ministry of New and Renewable Energy
  • B. Central Electricity Authority
  • C. Central Electricity Regulatory Commission
  • D. Solar Energy Corporation of India Limited

Q3. With reference to the second Viability Gap Funding (VGF) Scheme for BESS (2025) as compared with the first VGF Scheme for BESS (2024), consider the following statements. Which of the statements given above is/are correct?

  1. The targeted BESS capacity under the second scheme is larger than under the first scheme.
  2. The per-MWh viability gap funding under the second scheme is lower than under the first scheme.
  3. Both the schemes draw their entire budgetary support from the National Clean Energy Fund.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q4. Which one of the following is the primary source from which the budgetary support of Rs 5,400 crore for the second Viability Gap Funding Scheme for Battery Energy Storage Systems (2025) is drawn?

  • A. National Clean Energy and Environment Fund
  • B. Power System Development Fund
  • C. Green Energy Corridor Fund
  • D. PM-KUSUM Component-C Fund

Q5. In the context of India's electricity sector, the term "Energy Storage Obligation (ESO)" most accurately refers to which one of the following?

  • A. A mandatory annual investment by distribution companies in domestic battery cell manufacturing capacity
  • B. A minimum percentage of total electricity consumption that obligated entities must meet from energy stored in storage systems, set to rise from 1% in FY 2023-24 to 4% by FY 2029-30
  • C. The reserve generation margin that distribution licensees must maintain through pumped storage plants under the Electricity Act, 2003
  • D. A capital subsidy paid to domestic consumers for installing behind-the-meter rooftop battery storage units