- 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.
Why it matters
- Storage makes solar and wind dispatchable, supporting grid stability and peak-hour supply.
- It helps India meet its renewable and non-fossil capacity targets while reducing reliance on coal at peak times.
Problems
- Only about 24.3 GW of PPAs are signed against about 69 GW of awarded capacity, as DISCOMs hesitate to commit.
- Storage depends on imported battery cells and has high upfront costs, so it needs viability gap funding.
Way forward
- Aggregate DISCOM demand before tendering and enforce the Renewable Consumption Obligation.
- Shift tenders to solar or wind plus storage and FDRE, and build domestic cell manufacturing and R&D.
Put in your answer
CEA storage estimate: CEA estimates 60.63 GW of storage is needed by 2029-30, split 18.98 GW PSP and 41.65 GW BESS.
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- 2024Prelims Q38Which option relates to pumped-storage hydropower: long duration energy storage.
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UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
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.