India cuts battery storage costs with VGF and ISTS waivers

The Ministry of Power of India has announced steep reductions in discovered Battery Energy Storage System (BESS) tariffs and new support schemes to expand grid-scale storage capacity.

• Tariffs and VGF support: Discovered BESS tariffs have fallen from ₹10.18/kWh (2022–23) to ₹2.1/kWh without VGF for 2 cycles/day, with an expected ₹2.8/kWh at 1.5 cycles/day; the Ministry is administering a VGF scheme for 13,220 MWh of BESS with ₹3,760 crore budgetary support and a second 30 GWh BESS VGF scheme launched in June 2025 with ₹5,400 crore from the Power System Development Fund (PSDF), alongside ISTS charge waivers for co-located projects commissioned by June 2028 and graded waivers for non-co-located projects commissioned before June 2025.
• Manufacturing and policy background: The Ministry of Heavy Industries is implementing the PLI scheme “National Programme on Advanced Chemistry Cell (ACC) Battery Storage” to build 50 GWh domestic ACC manufacturing capacity, including 10 GWh for Grid Scale Stationary Storage (GSSS), approved in May 2021 with a total outlay of ₹18,100 crore, aimed at boosting domestic cell manufacturing, reducing import dependence, and further lowering future BESS costs; this information was provided by Minister of State for Power Shri Shripad Yesso Naik in a written reply in the Rajya Sabha.