India ramps up energy storage push with Rs 4.78 lakh crore investment
Targets 47.24 GW of BESS capacity by 2031-32.
India is set to significantly expand its energy storage capacity, with projected investments of about Rs 4.78 lakh crore by 2031-32 to support renewable energy integration and grid stability, the government said.
Under the National Electricity Plan (Generation) Gazette notified in May 2023, India’s Battery Energy Storage System (BESS) capacity requirement is projected to reach 8.68 GW/34 GWh by 2026-27 and 47.24 GW/236 GWh by 2031-32, requiring an estimated investment of around Rs 3.49 lakh crore by 2031-32.
The country’s Pumped Storage Plant (PSP) capacity requirement is projected at 7.45 GW/47 GWh by 2026-27 and 26.69 GW/175 GWh by 2031-32, with an estimated investment of about Rs 1.29 lakh crore by 2031-32.
NITI Aayog’s Sectoral Insights: Power (Vol. 7) report released in February 2026 identified energy storage as a critical component for managing renewable energy variability and improving grid reliability.
Join Asian Power community
The government has introduced a series of policy, regulatory, demand-side and supply-side measures to accelerate the deployment of Energy Storage Systems (ESS), including BESS.
It has also provided incentives to encourage storage adoption, including a waiver of Inter-State Transmission System (ISTS) charges for eligible BESS and PSP projects.
For BESS projects commissioned by June 2025, a 100% ISTS charge waiver was provided, followed by a 25% annual reduction. The waiver has been extended for co-located BESS projects commissioned until June 2028 and for PSP projects where construction work is awarded by June 2028.
The Central Electricity Regulatory Commission (CERC) allowed storage-based resources to provide ancillary services, including secondary and tertiary reserves, enabling ESS to support real-time grid balancing. Tariff-Based Competitive Bidding (TBCB) guidelines for procuring BESS and PSP projects have also been issued to create a transparent procurement framework.
Energy storage has been allowed to participate in India’s High-Price Day-Ahead Market, enabling storage systems to respond to peak electricity demand and pricing signals.
The government is also providing viability gap funding for the development of 43.8 GWh of BESS capacity.
On the manufacturing side, the government’s Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell manufacturing aims to establish 50 GWh of capacity, including 10 GWh for grid-scale stationary storage.
The government has also allowed consumers to develop, own, lease or operate energy storage systems and introduced technical standards and safety requirements for BESS projects.