3 February 2026·PIB

Government Takes Multi-Pronged Steps to Scale Up Energy Storage Capacity in the Country

In this note

1. At a Glance

India's transition to a high-RE grid hinges on firming intermittent solar/wind with storage; CEA pegs the 2029-30 storage need at 60.63 GW / 336.4 GWh [1][2].
The Centre is using a policy + fiscal + regulatory bundle (national framework, VGF, PLI-ACC, ISTS waiver, Energy Storage Obligation) — a classic GS-III "Energy/Infrastructure" case study [1][2].
Relevant for Prelims (schemes, ministries, numbers) and Mains (energy transition, federal financing, climate commitments).

3 February 2026 PIB release by Ministry of New and Renewable Energy (MNRE) titled "Government Takes Multi-Pronged Steps to Scale Up Energy Storage Capacity" consolidating measures for PSP and BESS rollout [1].
Follows June 2025 Cabinet/Ministry of Power approval of a ₹5,400 crore VGF for an additional 30 GWh BESS funded through the Power System Development Fund (PSDF) [2].

August 2023: Ministry of Power issued the National Framework for Promoting Energy Storage Systems [3].
September 2023: Cabinet approved the VGF Scheme for BESS (originally 4,000 MWh by 2030-31, up to 40% capital cost) [2].
March 2024: VGF scheme operationalised with ₹3,760 crore outlay for 13,220 MWh at ₹27 lakh/MWh [2].
June 2025: Additional 30 GWh BESS VGF via ₹5,400 crore PSDF at ₹18 lakh/MWh [2].
2026: MNRE consolidates measures including ISTS waiver and ESO trajectory [1].

Source document: CEA Report on "Optimal Generation Mix 2030" [1].
Storage need by 2029-30: 60.63 GW = 18.98 GW PSP + 41.65 GW BESS; 336.4 GWh = 128.15 GWh PSP + 208.25 GWh BESS [1][2].
Nodal Ministry: MNRE (with Ministry of Power for transmission/regulatory matters) [1].
Key Instruments:
Guidelines for Procurement & Utilisation of BESS as Gen/Trans/Discom & Ancillary asset [1].
National Framework for Promoting Energy Storage Systems (Aug 2023) [3].
Guidelines to promote Pumped Storage Projects (PSP) [1].
100% ISTS charges waiver — PSPs awarded on or before 30 June 2028; same for co-located BESS [2].
Energy Storage Obligation (ESO) trajectory: 1% (FY24) → 4% (FY30), +0.5% p.a.; ≥85% of energy stored must come from RE [2].
PLI-ACC (Advanced Chemistry Cell) scheme of Ministry of Heavy Industries supports domestic battery manufacturing [1].
Statutory anchor: Electricity Act, 2003 + CERC/SERC regulations.

Economic

VGF lowers tariff: discovered storage cost was ₹10.18/kWh before VGF/PLI interventions [2].
Total VGF commitment so far: ₹3,760 cr (13.2 GWh) + ₹5,400 cr (30 GWh) [2].
ESO creates assured offtake demand for storage investors.

Environmental / Climate

Storage is critical to meet 500 GW non-fossil capacity by 2030 and net-zero by 2070 pledges under UNFCCC [4].
Enables higher RE penetration without curtailment, reducing reliance on coal-fired balancing.

Scientific / Technological

Twin-track: PSP (mature, long-duration) + BESS (Li-ion, modular, fast response).
PLI-ACC (50 GWh) targets indigenisation; reduces import dependence on China for cells [1].

Administrative / Federal

ISTS waiver is a central lever; DISCOMs (State) must sign PPAs/ESPAs — MNRE actively facilitating PPA signing [1].
ESO is enforced via SERCs; uneven state compliance is a bottleneck.

Geostrategic

Battery supply chain (Li, Co, Ni) ties into Critical Minerals Mission 2025 and KABIL's overseas acquisitions.

3 Feb 2026: MNRE consolidation release on multi-pronged steps [1].
June 2025: ₹5,400 cr VGF for 30 GWh BESS via PSDF [2].
2024: ISTS waiver extended to co-located BESS commissioned by 30 June 2028 [2].
March 2024: First VGF tranche operationalised (13,220 MWh) [2].

CEA report "Optimal Generation Mix 2030" projects 60.63 GW storage need by 2029-30 [1].
Of this, 18.98 GW PSP + 41.65 GW BESS [1].
Total energy storage need: 336.4 GWh [2].
National Framework for Promoting ESS issued in August 2023 by Ministry of Power [3].
VGF for BESS: ₹3,760 cr for 13,220 MWh at ₹27 lakh/MWh (2024) [2].
Second VGF: ₹5,400 cr for 30 GWh at ₹18 lakh/MWh via PSDF (2025) [2].
ISTS waiver valid for PSP/BESS awarded by 30 June 2028 [2].
ESO trajectory: 1% in FY24 → 4% in FY30, rising 0.5% annually [2].
ESO compliance requires ≥85% RE-sourced stored energy [2].
PLI-ACC is administered by Ministry of Heavy Industries (not MNRE) [1].
At least 85% of VGF-funded BESS output must first be offered to DISCOMs [2].
Nodal ministry for the Feb 2026 release: MNRE [1].

GS-III: Infrastructure — Energy; Environment — Climate change mitigation; Indian Economy — Investment models.
GS-II: Government policies for sectors; Centre-State relations (DISCOMs).
Possible question stems:
"Energy storage is the missing link in India's renewable energy transition. Examine the policy and fiscal architecture being built to bridge it."
"Discuss the role of Viability Gap Funding and Energy Storage Obligations in de-risking BESS investments in India."
"Compare Pumped Storage Projects and Battery Energy Storage Systems as instruments of grid balancing in India's net-zero pathway."

National Electricity Plan 2023 — projects 236 GWh BESS by 2031-32 [2].
PLI Scheme for Advanced Chemistry Cells (50 GWh) — manufacturing leg of storage push.
Green Hydrogen Mission — competing/complementary storage vector.
CERC regulations on Ancillary Services — market design context.
Renewable Purchase Obligation (RPO) — parallel obligation regime.
Critical Minerals Mission, KABIL — upstream supply chain for batteries.
One Sun One World One Grid (OSOWOG) / ISA — international RE integration.
Discom finances & RDSS — without solvent buyers, storage PPAs stall.

Ministry confusion: National Framework (Aug 2023) was issued by Ministry of Power, not MNRE; PLI-ACC by Ministry of Heavy Industries.
Number mix-up: 60.63 GW is capacity; 336.4 GWh is energy — not interchangeable.
ESO ≠ RPO: ESO is sub-set of obligations specific to stored energy; trajectory peaks at 4% by FY30 (not 10% or higher).
ISTS waiver cut-off: it is 30 June 2028 (commissioning/award date) — not 2030.
Source document name: "Optimal Generation Mix 2030" is by CEA, not NITI Aayog.