Energy Storage (Batteries & Pumped Storage)

India's storage policy began with measures for the grid rather than a single scheme. An order of 23 November 2021 waived inter-state transmission charges for pumped storage and battery projects commissioned up to 30 June 2025. In 2022 energy storage was given legal status as a power-system element, bidding guidelines for battery storage were notified in March, and an Energy Storage Obligation trajectory up to 2029-30 was notified on 22 July 2022. In March 2023 the CEA put installed pumped storage capacity at 4,745.6 MW, and guidelines to promote pumped storage projects followed on 10 April 2023.

On 6 September 2023 the Union Cabinet approved Viability Gap Funding (VGF) for 4,000 MWh of battery storage by 2030-31, with an outlay of ₹9,400 crore including ₹3,760 crore of budgetary support. As battery prices fell, the scheme was approved in March 2024 for 13,220 MWh within the same ₹3,760 crore. A second VGF scheme for 30 GWh followed in June 2025, funded with ₹5,400 crore from the Power System Development Fund. Together the two schemes support about 43 GWh of battery storage.

Storage takes in surplus energy when renewable generation is high and supplies power during peak demand. Battery projects are procured through tariff-based competitive bidding; under the first VGF scheme at least 85% of project capacity is made available to distribution companies, and the grant is paid in 5 tranches: 10% at financial closure, 45% at commercial operation and 15% a year for the next three years. Pumped storage projects store surplus energy in off-peak periods and generate during peak demand, and also provide balancing and black-start services. Co-located batteries commissioned up to June 2028, and pumped storage projects whose construction is awarded by June 2028, get a 100% waiver of inter-state transmission charges.

The CEA's National Electricity Plan projects a need for 73.93 GW / 411.4 GWh of storage by 2031-32, of which 47.24 GW / 236.22 GWh is battery storage and 26.69 GW pumped storage. Against this, existing battery storage in projects above 1 MWh was 798 MWh on 30 March 2026, with 35.8 GWh under construction. On 20 July 2026, 11 pumped storage projects of 15,870 MW were under construction and 6 more of 8,140 MW had been concurred or appraised. A PLI scheme for advanced chemistry cells earmarks 10 GWh of its 50 GWh manufacturing capacity for grid-scale storage.

35.8 GWh battery storage under construction (30 Mar 2026). 798 MWh existing battery storage in projects above 1 MWh (30 Mar 2026). 13,220 MWh and 30 GWh under two VGF schemes (March 2024, June 2025). 10 projects, 6.2 GW pumped storage commissioned (30 Jun 2025). 15,870 MW pumped storage under construction (20 Jul 2026). 411.4 GWh storage needed by 2031-32 (National Electricity Plan, May 2023). Sources: Ministry of Power, MNRE, Union Cabinet and CEA via PIB.