About two-thirds of the storage in India's new scheme is water

What happenedWhat the Cabinet approved on 4 November, and how a hill stores power

On 4 November 2026, the Union Cabinet approved a viability gap funding scheme for grid-scale energy storage, PSU Watch reported. Viability gap funding is government money that covers part of a project's cost so that it can go ahead. The scheme gives total support of Rs 14,500 crore from 2026-27 to 2030-31, and Upstox reports that it aims at 92 GWh of storage by 2030-31, all of it not yet running. One GWh is 10 lakh units of power. Grid-scale means large projects on the power grid, not a battery at one home or factory. Mercom and Upstox give the same split: 60 GWh of pumped hydro, 30 GWh of batteries and 2 GWh of other technologies. So about two-thirds of the storage in this scheme is water.

Pumped hydro is an older idea: two lakes at different heights. When power is spare, like noon on a sunny day, pumps push water up to the top lake. When power is needed in the evening, the water runs back down through a turbine and makes power again. At the Cabinet briefing, the government's example was a solar park with a 10 MW line out of it. Solar makes nothing at night, so that line sits empty for those hours, and more lines get built. With storage, the same 10 MW line can carry power for more hours.

On the money, the expected investment is about Rs 97,600 crore, so the Rs 14,500 crore of support is about Rs 15 of every Rs 100 (our arithmetic). That is an average across the scheme, not a rule for each project. We have not seen a split of the Rs 14,500 crore between water and batteries, so every split in this story is of the storage, not the money. We worked from news reports of the decision, because we could not open the official press note.

The reports say projects are to be won through bidding, with bidders competing on price. Public and private power distribution companies are eligible for support on battery and pumped hydro projects, and projects using other technologies can be built by public or private organisations. Battery projects in this scheme must have at least 40 per cent domestic content, meaning content made in India. The stated aim, as ETV Bharat quotes it, is “reliable, affordable and round-the-clock power supply.” The government says the scheme helps towards an estimated need of 411 GWh of grid-scale storage by 2031-32, and the reports say the 92 GWh is about 1.7 times the grid-scale storage India has today.

This is one scheme, not the whole picture. Batteries also have support in another Cabinet decision: Green Energy Corridor Phase III, approved on 30 September, includes 50 GWh of batteries with Rs 6,000 crore of viability gap funding. We have not added the two together, because no report we read says how they relate.