Explanation:

Recently, the Union Cabinet, chaired by the Hon'ble Prime Minister of India approved the Scheme for Viability Gap Funding (VGF) for development of Battery Energy Storage Systems (BESS).

• The approved scheme envisages development of 4,000 MWh of BESS projects by 2030-31.

Funding

• Financial support of up to 40% of the capital cost as budgetary support in the form of Viability Gap Funding (VGF) is provided by the union government.

• The VGF shall be disbursed in five tranches linked with the various stages of implementation of BESS projects.

• By offering VGF support, the scheme targets achieving a Levelized Cost of Storage (LCoS) ranging from Rs. 5.50-6.60 per kilowatt-hour (kWh), making stored renewable energy a viable option for managing peak power demand across the country.

• To ensure that the benefits of the scheme reach the consumers, a minimum of 85% of the BESS project capacity will be made available to Distribution Companies (Discoms).

• The selection of BESS developers for VGF grants will be carried out through  transparent competitive bidding process, promoting a level playing field for both public and private sector entities.

Hence only statement 2nd is correct.