The government has rolled out a coordinated set of policy, regulatory, demand-side, and supply-side measures to accelerate the development and deployment of energy storage technologies. These initiatives cover Battery Energy Storage Systems (BESS) and Pumped Storage Projects (PSPs) and aim to address renewable energy intermittency while strengthening grid stability.
Role of energy storage in grid operations
Energy storage systems are being positioned to deliver critical ancillary services. These include frequency control, voltage regulation, peak shifting, congestion management, and black-start support, all of which are essential for reliable grid operations in a renewable-heavy power system.
Regulatory enablement and grid integration
To support this role, the Central Electricity Regulatory Commission’s Ancillary Services Regulations, 2022, have made energy storage systems eligible to provide secondary and tertiary reserve services. At the same time, Renewable Energy Management Centres (REMCs) and Automatic Generation Control (AGC) systems are enabling real-time monitoring and balancing of renewable power supply and demand.
Policy and regulatory measures
The government has introduced several enabling policy and regulatory reforms. These include amendments to the Electricity Rules in December 2022, formally recognising energy storage systems as part of the power system. In October 2022, ESS was included in the Harmonised Master List of Infrastructure, improving access to institutional financing.
Further, the government issued the National Framework for Promotion of Energy Storage Systems in September 2023. More recently, draft safety and technical standards for Battery Energy Storage Systems were released in 2025 to strengthen operational safety and standardisation.
Demand-side and market incentives
On the demand side, the government introduced Inter-State Transmission System (ISTS) charge waivers for co-located BESS and pumped storage projects. In addition, storage has been integrated into ancillary services markets and Tariff-Based Competitive Bidding (TBCB) guidelines for distribution utilities. Energy storage projects can also participate in the High-Price Day-Ahead Market. Moreover, Viability Gap Funding (VGF) schemes are supporting the development of approximately 43 GWh of battery storage capacity.
Pumped storage and Co-location Initiatives
In parallel, the government is providing grants and regulatory facilitation for pumped storage projects. It has also issued advisories promoting the co-location of energy storage systems with solar power plants and expanded the range of ownership and operational models permitted for ESS deployment.
Enabling the energy transition
Collectively, these measures form a critical pillar of India’s broader strategy to scale up energy storage capacity. As reported by knnindia.co.in, by improving grid reliability and flexibility, the initiatives are expected to support India’s transition towards a renewable-based, resilient, and sustainable energy ecosystem.
