Science and technology

Energy Storage: BESS and Pumped Storage Projects

GS3 EnergyPrelims and Mains

In the news since 3 February 2026

Why in news
On 3 February 2026, the Government told the Rajya Sabha about its steps to scale up energy storage (BESS and pumped storage) and to speed up signing of renewable power purchase agreements.
What it is
Energy storage holds surplus power, mainly from solar and wind, for use at peak hours or when generation drops. The two main routes are Battery Energy Storage Systems (BESS), which store power in batteries, and Pumped Storage Projects (PSP), which pump water uphill and release it through turbines. Storage makes variable renewable power dispatchable and keeps the grid stable.
Storage need by 2029-30
CEA's Optimal Generation Mix 2030 report estimates 60.63 GW of storage is needed: 18.98 GW from PSP and 41.65 GW from BESS.
ISTS waiver for PSP
PSPs get a 100% waiver of inter-state transmission charges if construction work is awarded on or before 30 June 2028.
First BESS VGF scheme
Approved in March 2024: Rs 3,760 crore outlay for 13,220 MWh of BESS, at Rs 27 lakh per MWh.
Second BESS VGF scheme
Approved in June 2025: 30 GWh, funded by Rs 5,400 crore from the Power System Development Fund, at Rs 18 lakh per MWh.
ACC battery programme
10 GWh is earmarked for grid-scale stationary storage under the National Programme on Advanced Chemistry Cell Battery Storage.
PPA gap
As on 31.12.2025, SECI, NTPC, NHPC and SJVN issued Letters of Award for about 69 GW, but PPAs are signed for only about 24.3 GW.

Don’t confuse with BESS vs PSP: BESS stores energy chemically in batteries; PSP stores it as gravitational potential energy of water between two reservoirs.

Don’t confuse with FDRE vs plain RE tender: FDRE tenders require firm, dispatchable renewable supply, often with storage. Plain solar or wind tenders supply power only when the resource is available.

Science and technology: 57 Prelims questions since 2013; most test the concept behind the news, not the news itself. In Mains, 12 news-triggered questions.

No practice question for this one; the card may still help an answer. Why: Lasting energy topic with VGF and ISTS waiver details, but UPSC rarely sets questions on storage policy numbers.

Worth revising until Prelims 2027: most news questions come within two years of the event.

Each time it was in the news

  1. 3 February 2026

    On 3 February 2026, the Government told the Rajya Sabha about its steps to scale up energy storage (BESS and pumped storage) and to speed up signing of renewable power purchase agreements.