Battery Energy Storage systems

Battery Energy Storage systems

News: Recently, the Govt has approved viability gap funding (VGF) to cover up to 40% of the total capital cost for the establishment of a 4,000 MWh battery energy storage system (BESS) in the country.

What is Viability gap funding?
• Viability Gap Funding (VGF) is the provision of a grant, either one-time or deferred, under a scheme with the objective of making a project commercially viable. There will be a viability gap between the cost of the project and the cash flow or monetary return from it.

Objectives:
• The initiative is aligned with India’s renewable energy goals, as the country has seen significant growth in solar and wind energy capacity, meeting 25% of its energy demand from renewables, including large hydro plants.
• The BESS aims to enable the use of stored renewable energy during peak hours, promoting round-the-clock renewable energy supply.
• The scheme supports India’s ambition to achieve 50% of its energy requirements through renewable and non-fossil energy sources by 2030, while also contributing to carbon emissions reduction.

What is Battery energy storage systems(BESS)?
• Battery Energy Storage Systems (BESS) are rechargeable batteries that can store energy from different sources and discharge it when needed. These systems are commonly used in electricity grids and in other applications such as electric vehicles, solar power installations, and smart homes.
• BESS can provide advantages over other energy storage systems, including greater efficiency and flexibility, faster response times when powering equipment or devices, and lower costs overall.
• BESS can reduce greenhouse gas emissions by improving energy efficiency and integrating renewable energy sources.
• Challenges - High initial costs, Battery degradation over time, recycling and disposal of batteries.