- Ministry of Power updates Viability Gap Funding Scheme (VGF) for Battery Energy Storage Systems to require local software and improve quality standards.
- New clause 3.9 says application software for Energy Management Systems must be developed in India, encouraging independence.
- Clarifications on grid connectivity and land responsibilities, along with a ban on refurbished battery cells, aim to boost safety and make project rules clearer.
Viability Gap Funding Scheme for Battery Energy Storage Systems has been updated by the Ministry of Power to boost India’s energy storage sector. These VGF Scheme Amendments focus on using local software and strong quality checks, supporting efforts for energy independence and sustainable infrastructure. Keywords like VGF Scheme Amendments show the key changes made as of August 2025.
Important Changes in the VGF Scheme for Battery Energy Storage Systems
The recent updates shared in an official notice mainly cover three points: use of Indian technology, clarity on grid connection and land responsibilities, and higher quality standards for battery storage projects. These changes support Indian innovations and help projects run more smoothly.
Local Software Required for Energy Management Systems
A new clause 3.9 says that application software used in the Energy Management System of Battery Energy Storage Systems (BESS) must be made in India. This rule supports local software developers by giving priority to India-made solutions, helping the “Make in India” campaign and promoting more control over power storage technology.
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Clear Rules on Grid Connection and Land Responsibility
The updated clause 3.6 clearly states that project developers can connect their BESS projects to either intra-state or inter-state transmission systems. But they are responsible for arranging grid connectivity and getting land as described in the Request for Selection document. This change gives clear guidance, reducing delays caused by unclear infrastructure and land issues.
Quality Standards and Ban on Used Battery Cells
A new sub-clause under Guideline 4 sets strict quality rules requiring only new, certified battery cells to be used. Refurbished or second-hand cells are not allowed to keep performance and safety high. The Eligible Entity or Renewable Energy Implementing Agency must make sure the installed BESS meets these quality standards, protecting investments and building trust.
Effects on States and Those Involved in VGF Scheme Changes
These changes have important effects for states active in renewable energy and central agencies managing energy infrastructure.
Role of State Energy Departments and Central Agencies
States like Rajasthan, Gujarat, Maharashtra, Tamil Nadu, Karnataka, Andhra Pradesh, Madhya Pradesh, Telangana, Uttar Pradesh, Haryana, Kerala, Punjab, Chhattisgarh, Odisha, and Uttarakhand are especially involved. Their energy departments need to support these guidelines and check that they are followed. Central bodies such as the Central Electricity Authority, NTPC, Grid India, and senior Ministry of Power officials will provide overall support and ensure rules are followed.
Why These Changes Matter for Renewable Energy Developers
The updates encourage renewable energy developers to follow quality-focused and local technology requirements. Well-known and India-made battery energy storage systems make projects more sustainable, fit India’s energy needs better, and boost overall use of renewables. Clear rules around grid and land responsibilities also reduce confusion, helping developers plan and complete projects more easily.