India is poised for a clean energy revolution, and one of the key milestones in this process is the recent launch of the Viability Gap Funding (VGF) Scheme for 30 GWh of Battery Energy Storage Systems (BESS). The policy marks a decisive shift in the Nation’s energy direction, from just scaling up renewable capacity to achieving stability, flexibility, and reliability in the power grid.
As renewable penetration grows, particularly from solar and wind, energy storage is no longer optional. It has become a fundamental enabler of round-the-clock clean power. This is where the government’s VGF initiative and the companies poised to execute on it come into play.
In this changing landscape, companies such as Avaada are already making attempts to build state-of-the-art BESS systems that can ground India’s clean energy goals.
Why Battery Energy Storage Systems Are Critical
A BESS system is fundamentally a rechargeable, scalable system that accumulates electricity from renewable sources during off-peak times and releases it when demand peaks or when generation is low (e.g., nights or cloudy days). It provides:
- Grid stability and frequency regulation
- Peak load management
- Less dependence on coal peaking plants
- Smaller integration of intermittent renewables
Without a strong battery storage infrastructure, India will be running the risk of generating a wasted energy surplus, particularly during high-demand hours. Conversely, energy shortages during times of peak demand may undermine the reliability of renewable energy. The VGF-supported BESS projects will play a key role in tipping this balance.
To learn more about Battery Energy Storage Systems, explore our blog on “Trends Shaping Battery Energy Storage Systems in 2025“
Avaada and the Rise of Clean Energy Storage Infrastructure
One of India’s top clean energy developers, Avaada, has already diversified into energy storage, seeing its critical importance in a decarbonised grid. From developing solar generation to BESS system development, Avaada can provide a complete solution to new energy systems.
Avaada’s core strengths in the field are:
- Utility-scale renewable + storage hybrid projects
- BESS integration with solar and wind farms
- In-house engineering and EPC for storage solutions
- Advanced control and analytics for storage optimization
By positioning its roadmap along the VGF scheme, Avaada is in an ideal position to bid on future storage tenders and make a meaningful contribution to India’s storage capacity build-out.
Implications for the Renewable Energy Industry
The opening of the VGF scheme isn’t great news for the storage sector; it’s a game-changer for the entire Indian renewable energy value chain. Here’s why:
1 . Firm Renewable Power Becomes a Reality
The majority of solar and wind schemes have been intermittent. Storage enables developers to provide firm, schedulable power, addressing industrial and utility-scale needs with greater assurance.
2 . New Developer Business Models
With incentives lowering the cost barrier, storage is now able to be packaged into hybrid power purchase agreements (PPAs), energy-as-a-service offerings, and grid services contracts.
3 . Boost to Domestic Manufacturing
The plan is likely to trigger investments in system integration and battery cell production. This complements India’s overall objective under the Production-Linked Incentive (PLI) schemes.
4 . Decentralized Energy Access
BESS is particularly useful for rural or remote areas where grid connectivity is poor or unstable. Storage-backed microgrids may be used to supply reliable power to health centres, schools, and local industries.
Technological Innovation in BESS Systems
The scope of innovation in BESS extends well beyond lithium-ion batteries. Indian innovators and research institutions are working actively to develop:
- Flow batteries for long-duration storage
- Sodium-ion and solid-state batteries, as substitutes for lithium
- Recycling and second-life batteries for sustainability
- AI-based control systems for demand forecasting and load balancing
Firms with R&D capabilities and the capacity to implement these technologies into operating projects, such as Avaada, will drive the next energy innovation wave.
Learn more about “What is BESS, and how does it work?”
Looking Ahead: Challenges and Opportunities
Although the VGF program is a giant leap, the journey ahead is fraught with various challenges:
- High import cost of batteries
- Insufficient recycling infrastructure
- Clarity in regulation on open access and grid services
- Requirement of skilled personnel in storage operations
But these are opportunities in disguise, too. With an appropriate public-private partnership, India can become not just a pioneer in renewable generation but in energy storage development and deployment too.
Conclusion
The 30 GWh VGF policy is a landmark policy announcement that will speed up India’s shift to a secure, robust, and low-carbon energy future. Battery storage is the conduit between aspirational renewable targets and reality at the grid level, and now, that bridge is being constructed with purpose and clarity.
Players such as Avaada, with their visionary plans and established business delivery capabilities, will be at the centre of making this a reality. As India marches towards 500 GW of renewable energy capacity, energy storage will no longer be a constraint but the anchor.
