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The Minister of State for Power told the Rajya Sabha that India's Battery Energy Storage System (BESS) capacity requirement is projected to rise from 8.68 GW/34 GWh by 2026-27 to 47.24 GW/236 GWh by 2031-32, per the National Electricity Plan (Generation) notified in May 2023, entailing an estimated investment of about ₹3.49 lakh crore by 2031-32.
Pumped Storage Plant (PSP) capacity requirement is projected to rise from 7.45 GW/47 GWh by 2026-27 to 26.69 GW/175 GWh by 2031-32, with an estimated investment of about ₹1.29 lakh crore by 2031-32.
The reply listed 18 policy, regulatory, demand-side and supply-side measures taken since 2022 to promote energy storage — including ISTS charge waivers, CERC-enabled ancillary-services access for storage, and the ₹18,100-crore PLI scheme for Advanced Chemistry Cell (ACC) battery manufacturing.
Statutory 5-year generation-capacity plan prepared by the CEA under the Electricity Act, 2003
Key: Current edition gazette-notified in May 2023; projects BESS and PSP capacity requirements out to 2031-32
Provide a roadmap for ESS deployment, market integration and regulatory facilitation
Key: Notified by the Ministry of Power in September 2023; supports India's target of 50% cumulative non-fossil installed capacity by 2030 and Renewable Energy-Round the Clock supply
Build 50 GWh of domestic Advanced Chemistry Cell manufacturing capacity to strengthen the electric mobility and battery storage ecosystem
Key: ₹18,100 crore outlay approved May 2021 by the Ministry of Heavy Industries; 40 of the 50 GWh already awarded to 4 firms — Reliance New Energy Solar, Ola Electric Mobility, Hyundai Global Motors and Rajesh Exports; ₹3,237 crore invested and 1,118 jobs created till 31.12.2025
Cut inter-state transmission cost for storage projects to speed up deployment
Key: 100% waiver for standalone BESS projects commissioned by June 2025 (25% annual reduction thereafter); 100% waiver extended to co-located BESS and PSP projects with construction awarded by June 2028
Statutory technical body under the Electricity Act, 2003, which prepares the National Electricity Plan and sets technical/safety standards for the sector — e.g., the BESS safety regulations notified 30.03.2026
Regulates inter-state power tariffs; allowed storage-based resources into ancillary services (January 2022) and the High-Price Day-Ahead Market (March 2023), and issues Tariff-Based Competitive Bidding guidelines for BESS/PSP procurement
Statutory basis for the CEA and the National Electricity Plan; the December 2022 amendment formally recognised Energy Storage Systems as an integral part of the power system
Constitutes CERC, which regulates ancillary-services access, market participation and tariff-based bidding for storage resources
Notified 30.03.2026; prescribes safety requirements specifically for BESS installations
Both technologies store surplus electricity — often from variable renewable sources — to release during peak demand or when generation dips, stabilising the grid. BESS uses electrochemical batteries, giving a fast response suited to short-duration (hours-scale) balancing. PSP uses the gravitational potential energy of water pumped to an upper reservoir during surplus generation, released through turbines during peak demand — suited to longer-duration, large-scale storage but dependent on specific terrain and water availability.
Simple Analogy: BESS is like a phone power bank — quick to charge and discharge. PSP is like a hydro dam purpose-built to 'store' electricity as the height of water, released on demand.
| Aspect | BESS | PSP |
|---|---|---|
| 2026-27 capacity requirement | 8.68 GW / 34 GWh | 7.45 GW / 47 GWh |
| 2031-32 capacity requirement | 47.24 GW / 236 GWh | 26.69 GW / 175 GWh |
| Estimated investment by 2031-32 | ~₹3.49 lakh crore | ~₹1.29 lakh crore |
| Technology basis | Electrochemical battery | Gravitational (pumped water) |
Supply-side manufacturing push (₹18,100 crore, Ministry of Heavy Industries) that feeds the domestic battery capacity this release's demand-side BESS projections depend on
Demand-side support for 43.8 GWh of BESS capacity, complementing the ISTS charge waivers and Tariff-Based Competitive Bidding procurement route named in the same reply
GS Paper 3 > Infrastructure > Energy; Environment > Renewable Energy Integration
Economy > Infrastructure Financing
Recurring — grid storage policy is an active, fast-evolving GS3 topic given India's rising renewable energy capacity.
Battery Energy Storage System — electrochemical battery-based storage for short-duration grid balancing.
Pumped Storage Plant — hydro-based storage using pumped water for longer-duration, large-scale grid balancing.
Production-Linked Incentive scheme for Advanced Chemistry Cell battery manufacturing — ₹18,100 crore outlay, Ministry of Heavy Industries, targeting 50 GWh of domestic capacity.