India Targets 73.93 GW of Energy Storage Capacity by 2031-32

India's national power planning framework now requires 73.93 gigawatts of energy storage by 2031-32 to integrate the country's planned renewable energy expansion, with battery and pumped hydro storage technologies at the centre of the strategy. The government has approved viability gap funding of Rs37.6 billion — covering up to 40% of capital costs — to accelerate deployment of battery energy storage systems.

India's power sector planning targets a storage deployment of 73.93 GW and 411.4 gigawatt-hours by 2031-32, comprising 26.69 GW and 175.18 GWh of pumped hydro storage and 47.24 GW and 236.22 GWh of battery energy storage systems. This is necessary to integrate renewable capacity that is planned to grow from approximately 177 GW in mid-2023 to 596 GW by March 2032. A national framework for energy storage systems, recently published by the government, provides legal status for independent storage projects, an Energy Storage Obligation on distribution utilities, waiver of inter-state transmission charges, and eligibility to participate in the High Price Day Ahead Market.

The viability gap funding of Rs37.6 billion targets 4,000 megawatt-hours of battery energy storage capacity, aiming to reduce levelised costs of storage. The framework also addresses a key policy gap: a goods and services tax of 18–28% applies to pumped hydro project components compared to 12% for wind and solar project components, creating cost distortions that undermine competitiveness. The government is also working on differential peak and off-peak pricing mechanisms to improve the economic viability of pumped hydro, and developing real-time power markets to enable ancillary service revenues for battery storage projects.

IEEFA's analysis, first published in EPR Magazine, concludes that streamlining taxation, introducing differential pricing, and developing real-time markets will collectively improve the economics of energy storage in India. The legal status accorded to independent energy storage projects enables a new class of storage-as-a-service providers. The Energy Storage Obligation will drive phased deployment as technology costs continue to decline. These measures position energy storage as a critical enabler of India's energy transition, helping balance a grid that increasingly relies on variable solar and wind generation.

Key figure — India requires 73.93 GW and 411.4 GWh of energy storage capacity by 2031-32 to integrate planned renewables.