India Moves Towards Mandatory Energy Storage for State Utilities to Strengthen Power Supply
India is taking steps to strengthen its electricity infrastructure by planning mandatory energy storage requirements for state power utilities. The proposed move aims to address electricity shortages, improve grid stability and ensure that surplus renewable energy can be stored and used when demand increases. As the country expands its solar and wind energy capacity, developing reliable storage facilities is becoming increasingly important for maintaining a consistent power supply.
The initiative reflects India's growing focus on building a modern electricity network that can accommodate increasing energy demand while making better use of clean energy resources. Energy storage systems are expected to play a crucial role in balancing electricity generation and consumption, particularly during evening hours when solar power generation declines.
Government Plans Mandatory Energy Storage Requirements
The government is working towards introducing mandatory energy storage requirements for state electricity utilities to improve power availability across the country. Power Secretary Pankaj Agarwal announced the proposed measure at the Bharat Renewable Energy Summit, highlighting the need to integrate storage facilities into India's electricity distribution system.
Under the proposed framework, state utilities will be encouraged to incorporate battery storage and other energy storage technologies into their power procurement plans. The government is also considering additional clean energy tenders that include storage requirements. The exact capacity obligations are still being discussed, with the aim of developing a framework that supports the country's growing electricity requirements. This initiative is expected to encourage investment in energy storage infrastructure and improve the ability of state utilities to manage fluctuations in electricity generation and demand.
Energy Storage to Address Power Supply Challenges
One of the major challenges associated with renewable energy is the difference between the timing of electricity generation and consumption. Solar power production is highest during the daytime, while electricity demand often remains high during the evening and nighttime. Without adequate storage facilities, surplus electricity generated during sunny hours cannot be effectively utilised later.
Battery Energy Storage Systems (BESS) can help address this challenge by storing excess electricity and releasing it when required. Pumped storage hydropower projects offer another important solution by storing energy through water reservoirs and generating electricity during periods of higher demand. These technologies can improve grid flexibility, reduce the wastage of renewable electricity and provide additional support during periods of supply shortages.
₹14,500-Crore Scheme to Accelerate Energy Storage Development
In a significant development, the Union Cabinet approved a ₹14,500-crore Viability Gap Funding scheme to support the development of 92 GWh of energy storage capacity across India. The programme is designed to accelerate investment in large-scale storage infrastructure and make projects more financially viable.
The initiative includes 60 GWh of pumped storage projects, 30 GWh of battery energy storage systems and 2 GWh of emerging storage technologies. It is expected to attract approximately ₹97,600 crore in total investment, creating opportunities for infrastructure developers, manufacturers and technology companies.
The programme also emphasises domestic manufacturing, with a minimum domestic content requirement of 40 per cent for battery storage projects. This approach is expected to strengthen India's manufacturing ecosystem, encourage technological development and support greater participation by Indian companies in the energy storage sector.
Strengthening India's Renewable Energy Ambitions
India has set an ambitious target of achieving 500 GW of installed electricity generation capacity from non-fossil fuel sources by 2030. Achieving this objective will require not only expanding renewable energy generation but also developing infrastructure capable of storing and distributing electricity efficiently.
According to projections by the Central Electricity Authority, India could require approximately 411 GWh of energy storage capacity by 2031–32, including 236 GWh from battery storage and 175 GWh from pumped storage hydropower.
The expansion of storage infrastructure will help integrate larger quantities of solar and wind energy into the national grid. It can also improve electricity availability during peak consumption periods and reduce dependence on conventional power generation for balancing supply and demand.
The MGMM Outlook
India’s proposed move towards mandatory energy storage requirements for state electricity utilities marks an important step in strengthening the country’s power infrastructure and renewable energy capabilities. As electricity demand continues to rise, integrating battery storage and pumped hydropower facilities will help ensure a more reliable supply, particularly during peak demand hours when solar generation declines. The ₹14,500-crore Viability Gap Funding scheme, targeting 92 GWh of energy storage capacity, further demonstrates the government’s commitment to accelerating infrastructure development, attracting investment and strengthening domestic manufacturing in this sector.
The expansion of energy storage facilities will be essential to achieving India’s ambition of 500 GW of non-fossil fuel energy capacity by 2030. By encouraging advanced storage technologies, supporting Indian manufacturers and improving grid management, these initiatives can help reduce renewable energy wastage and improve electricity availability across states. The proposed requirements for state utilities also highlight the importance of preparing the power sector for future energy needs. Together, these efforts can strengthen India's energy security, support its clean energy transition and build a more resilient electricity network for the future.
(Sources: Firstpost, Business Standard, Moneycontrol
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