India will require 60.63 GW of energy storage capacity by 2029–30 to support its fast-expanding renewable energy base and ensure grid reliability, according to a report by the Central Electricity Authority (CEA). The projected requirement includes 18.98 GW from Pumped Storage Projects (PSPs) and 41.65 GW from Battery Energy Storage Systems (BESS), underlining the growing importance of both hydro and battery-based solutions in balancing intermittent solar and wind power.
Government Rolls Out Policy Support and Incentives
To meet this ambitious target, the government has introduced a series of policy and financial measures aimed at accelerating storage deployment across the power value chain. Minister of State for New and Renewable Energy Shripad Yesso Naik mentioned that the government has issued guidelines for the procurement and use of BESS across generation, transmission and distribution segments. Authorities have also launched a national framework to promote energy storage systems and separate guidelines to fast-track pumped storage projects. In addition, the government has announced a 100 percent waiver of inter-state transmission system (ISTS) charges for PSPs awarded by June 30, 2028, and for select co-located battery storage projects commissioned within the same timeline — a move expected to improve project economics.
Financial Push for Battery Storage Expansion
Alongside regulatory support, the Centre has strengthened funding mechanisms to attract private investment. In March 2024, the government approved a viability gap funding (VGF) scheme with an outlay of ₹3,760 crore to support 13,220 MWh of large-scale battery storage projects. Building on this, another VGF scheme was launched in June 2025 to back 30 GWh of storage capacity, supported by ₹5,400 crore from the Power System Development Fund. Further, 10 GWh of grid-scale stationary storage capacity has been earmarked under the National Programme on Advanced Chemistry Cell (ACC) Battery Storage, reinforcing domestic manufacturing and deployment.
Shift Towards Storage-Linked Renewable Procurement
Meanwhile, India’s renewable energy procurement strategy is also evolving. As of December 31, 2025, renewable energy implementing agencies (REIAs) — including SECI, NTPC, NHPC and SJVN — have issued letters of award for nearly 69 GW of capacity, while power purchase agreements (PPAs) have been signed for about 24.3 GW. In parallel, states and commercial and industrial consumers are adding capacity through open access and captive routes.
With renewable power costs declining and storage becoming more competitive, distribution companies and bulk consumers are increasingly opting for solar and wind projects bundled with storage or firm and dispatchable renewable energy (FDRE) solutions. Recognising this shift, the government has advised REIAs to move away from standalone renewable tenders and prioritise storage-linked and peak power supply bids.
Steps to Accelerate Project Execution
To speed up project implementation, the Centre has urged states to meet their renewable consumption obligations and encouraged agencies to aggregate demand before issuing tenders, improving offtake certainty. Additionally, regional workshops have been conducted with key states to address execution bottlenecks and fast-track renewable and energy storage deployment. As reported by knnindia.co.in, with policy support, financial incentives and evolving procurement strategies now in place, energy storage is set to become a cornerstone of India’s clean energy transition, enabling higher renewable penetration while ensuring grid reliability.
