Government Unveils Multi-Pronged Policy, Financial and Regulatory Roadmap to Build 60.63 GW Energy Storage Capacity by FY30

The Government of India has undertaken a series of comprehensive policy, regulatory, and financial measures to rapidly scale up the country’s energy storage capacity, aligning with its long-term renewable energy and grid stability objectives.

According to the Central Electricity Authority’s (CEA) report “Optimal Generation Mix 2030,” India will require 60.63 GW of energy storage capacity by 2029–30, comprising 18.98 GW from Pumped Storage Projects (PSP) and 41.65 GW from Battery Energy Storage Systems (BESS).

To meet this target, the government has introduced multiple initiatives spanning policy support, financial incentives, and research and development.

Policy and Regulatory Push

The Ministry of New and Renewable Energy (MNRE) has notified guidelines for the procurement and utilisation of BESS across generation, transmission, and distribution assets, including ancillary services. A National Framework to promote Energy Storage Systems (ESS) and separate guidelines to encourage PSP development have also been issued.

To accelerate project execution, the government has announced a 100% waiver of Inter-State Transmission System (ISTS) charges for PSP projects awarded on or before June 30, 2028. A similar ISTS waiver has been extended to co-located BESS projects commissioned within the same timeline, subject to specific conditions.

Financial Support Through VGF Schemes

In March 2024, the government approved a ₹3,760 crore Viability Gap Funding (VGF) scheme for the development of 13,220 MWh of large-scale BESS, offering financial support of ₹27 lakh per MWh.

This was followed by another VGF scheme in June 2025 for 30 GWh of BESS capacity, backed by ₹5,400 crore from the Power System Development Fund (PSDF), with a funding support of ₹18 lakh per MWh.

Additionally, 10 GWh of grid-scale stationary storage capacity has been earmarked under the National Programme on Advanced Chemistry Cell (ACC) Battery Storage.

R&D and Manufacturing Focus

The government is also prioritising indigenous technology development through its Renewable Energy Research and Technology Development Programme, supporting research institutions and industry for cost-effective energy storage solutions.

Meanwhile, the Department of Science and Technology (DST), under the Clean Energy Material Initiative (CEMI), is funding multiple R&D projects on energy storage materials and devices, strengthening domestic innovation and manufacturing capabilities.

Growing Shift Towards Storage-Backed Renewables

With the declining cost of solar and wind integrated with storage and dispatchable renewable energy, distribution companies (DISCOMs) and bulk consumers are increasingly favouring such solutions over plain renewable energy procurement.

In response, the government has advised Renewable Energy Implementing Agencies (REIAs)—including SECI, NTPC, NHPC, and SJVN—to transition from conventional renewable tenders to storage-linked tenders, peak power supply configurations, and Firm and Dispatchable Renewable Energy (FDRE) tenders.

As of December 31, 2025, REIAs have issued Letters of Award for around 69 GW of renewable energy capacity, while Power Purchase Agreements (PPAs) have been signed for approximately 24.3 GW.

Boosting PPA Signings and State Participation

To facilitate faster PPA execution, the government has urged states to comply with Renewable Consumption Obligations under the Energy Conservation Act and directed REIAs to aggregate demand from DISCOMs and large consumers before issuing tenders. Regional workshops have also been conducted with major renewable energy procuring states to resolve implementation challenges and accelerate procurement.

States are simultaneously advancing renewable capacity additions through state-level tenders and commercial & industrial (C&I) green energy open access and captive routes, enabling capacity growth through multiple channels.

Parliamentary Disclosure

The details were shared by Union Minister of State for New and Renewable Energy, Shri Shripad Yesso Naik, in a written reply to the Rajya Sabha, underscoring the government’s commitment to building a robust energy storage ecosystem to support India’s clean energy transition.