The Government of India is taking comprehensive measures to significantly enhance the country’s energy storage capacity, aiming to strengthen the transition to a reliable and dispatchable renewable energy system. According to the Central Electricity Authority’s “Optimal Generation Mix 2030” report, India will require 60.63 GW of energy storage by 2029-30, including 18.98 GW from Pumped Storage Projects (PSPs) and 41.65 GW from Battery Energy Storage Systems (BESS).
To achieve this, the government has introduced a series of regulatory and policy measures. Guidelines have been issued for the procurement and use of BESS as part of generation, transmission, and distribution assets, including ancillary services, along with separate guidelines to promote PSP development. A national framework has also been established to support large-scale deployment of energy storage systems across the country.
Financial incentives form a key part of the strategy. The government has granted a 100% waiver of Inter-State Transmission System (ISTS) charges for PSP projects awarded before June 30, 2028, as well as for co-located BESS projects commissioned by the same date. Additionally, Viability Gap Funding (VGF) schemes have been approved: ₹3,760 crore in 2024 for 13,220 MWh of BESS at Rs 27 lakh/MWh, and ₹5,400 crore in 2025 for 30 GWh of BESS at Rs 18 lakh/MWh under the Power System Development Fund (PSDF).
Under national programmes, the government has earmarked 10 GWh capacity for grid-scale applications through the Advanced Chemistry Cell (ACC) Battery Storage Programme. An advisory has also been issued to encourage co-locating energy storage with solar projects, which improves grid stability and reduces costs.
The government is also promoting research and development in energy storage technologies. The Renewable Energy Research & Technology Development Programme supports domestic technology development, while the Department of Science & Technology, through the Clean Energy Material Initiative (CEMI), is funding R&D projects in storage materials and devices.
As of December 31, 2025, Renewable Energy Implementing Agencies (SECI, NTPC, NHPC, and SJVN) have issued Letters of Award for 69 GW and signed Power Purchase Agreements for 24.3 GW. States are also procuring renewable power through open access, captive, and commercial routes, ensuring multi-pathway capacity addition.
With declining costs of solar and wind paired with storage, distribution companies are increasingly preferring dispatchable renewable energy over plain solar or wind. In line with this, REIAs are being guided to prioritize tenders that include energy storage, peak-hour supply, and Firm & Dispatchable Renewable Energy (FDRE).
To facilitate PPA signing, the government has urged states to comply with Renewable Energy Consumption Obligations, advised REIAs to aggregate demand from DISCOMs and other consumers, and organized regional workshops to address challenges and accelerate project implementation.
This information was shared by Union Minister of State for New and Renewable Energy Shripad Yesso Naik in a written reply to the Rajya Sabha.
Nurturing Creativity – Keekli Charitable Trust, Shimla
