Union Cabinet to discuss capex support for critical mineral processing, VGF for RE grid-scale storage system

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The Union Cabinet is expected to take up two major schemes for consideration, the first of them concerns according capital expenditure support for promoting critical mineral processing and the other being a viability gap funding (VGF) scheme for development of grid-scale storage system, according to a memo seen by The Hindu.

The Union Cabinet is scheduled to meet on Wednesday (November 4, 2026).

Although the memo did not specify the contours of the scheme and its ambit, the policy has been in the works for some time now.

The Hindu had learnt previously that the potential scheme could provide support of about 30% for setting up of these processing plants.

At an event of the industry body FIMI in September this year, Secretary at the Union Ministry of Mines Keshav Chandra had indicated that the government would institute a scheme for domestic processing of lithium and nickel.

Back in April, the Piyush Goyal, the former secretary, had indicated that the government had identified two minerals for initiating the scheme that were, among other things, expected to provide resilience the electric vehicle battery chain.

Grid-scale energy storage systems are deployed at transmission and distribution for greater grid stability, absorb excess electricity when supply exceeds demand and discharge them during peak hours or when necessary.

About 1,835 million units (MUs) of renewable energy was curtailed, according to data compiled by the Centre for Research on Energy and Clean Air (CREA) during July and August this year. This includes 1,462 MU of solar energy and 373 MU of wind energy.

The Ministry of Heavy Industries is already implementing a production-linked incentive (PLI) scheme for establishing 50 GWh of advanced chemistry cell manufacturing capacity, of which 10 GWh would account for grid-scale stationary storage.