New Delhi: The central government has cleared Rs 5,400 crore in Viability Gap Funding (VGF) to support the development of 30 GWh Battery Energy Storage Systems (BESS), the Ministry of Power announced on Tuesday. This funding is intended to strengthen the grid’s storage capacity by 2028 and attract investments estimated at Rs 33,000 crore.
Focus on Expanding Storage Capacity
The Rs 5,400 crore scheme comes in addition to 13.2 GWh of BESS projects currently under implementation. Union Power Minister Manohar Lal stated that the government aims to meet rising power demand and facilitate greater integration of renewable energy into the national grid.
To encourage further development, the ministry has extended the waiver on inter-state transmission charges for battery and pumped storage projects. The waiver will now remain in place until June 30, 2028, applicable to BESS commissioned or pumped storage awarded before that date.
1100 kV UHV Lines Planned for Grid Modernisation
The government has also outlined plans to develop nine Ultra High Voltage Alternating Current (UHVAC) transmission lines rated at 1100 kV by 2034. These high-capacity transmission corridors aim to improve long-distance electricity transfer and reduce losses. The Central Power Research Institute is setting up testing facilities for equipment related to these UHV systems.
Land Compensation Hike Under RoW Rules
In a significant policy update, the compensation framework under the Right of Way (RoW) rules has been revised to address landowner concerns. Tower area compensation has been raised from 85% to 200% of the land’s market value, while corridor compensation has been increased from 15% to 30%. These changes are now linked to land market rates, with registered valuers assessing the land value. Haryana and Delhi have already implemented these new guidelines, issued on March 21, 2025.
