The Government of India has announced a sweeping set of policy, financial and regulatory measures aimed at rapidly expanding the nation’s energy storage capacity to support renewable energy growth and strengthen grid stability. According to the latest data from the Central Electricity Authority’s “Optimal Generation Mix 2030” report, the country is projected to need 60.63 GW of energy storage capacity by 2029-30, including nearly 19 GW of pumped storage and over 41 GW of battery energy storage systems (BESS).
To reach this ambitious target, the Ministry of New and Renewable Energy (MNRE) and other government bodies have rolled out a multi-pronged policy framework. This includes formal guidelines for procuring and integrating BESS across generation, transmission and distribution sectors, as well as a National Framework for Energy Storage Systems that gives long-term direction to the sector.
A key element of the government’s approach is strong financial support through Viability Gap Funding (VGF). In March 2024, authorities approved approximately ₹3,760 crore in VGF to support around 13.22 GWh of large-scale BESS capacity. This was followed by an expanded ₹5,400 crore scheme in June 2025 targeting 30 GWh of BESS, drawing funds from the Power System Development Fund to make large battery projects more financially viable.
On the regulatory side, New Delhi has also offered 100 % waivers on Inter-State transmission charges (ISTS) for both pumped storage projects and co-located BESS installations that meet commissioning timelines — a move aimed at lowering costs and accelerating deployment. This waiver applies to construction contracts awarded by mid-2028.
To further strengthen India’s energy ecosystem, grid and project developers are being encouraged to co-locate storage with renewable generation. This strategy is expected to improve grid flexibility, enhance utilisation of clean power and reduce curtailment, while helping balance supply during peak hours.
Alongside these measures, the government is also backing research and indigenous development through programs that fund advanced storage materials and technologies. Renewables implementing agencies have already issued letters of award for tens of gigawatts of clean capacity, and industry observers see storage-linked renewable projects gaining preference over plain solar or wind bids as costs continue to fall.
