Executive Summary:
This document outlines the Indian government's strategy to scale up Battery Energy Storage Systems (BESS) to support grid stability and integrate renewable energy sources, aiming for 500GW of non-fossil fuel capacity by 2030. Key initiatives include Viability Gap Funding (VGF) schemes, waivers on Inter-State Transmission System (ISTS) charges for co-located BESS projects commissioned by June 30, 2028, and modernization of grid infrastructure. Amendments to Electricity Rights of Consumers Rules, 2020, aim to streamline rooftop solar deployment.
Key Points / Main Content:
Battery Energy Storage System (BESS) Deployment:
The Central Electricity Authority (CEA) projects a BESS capacity of 41.6 GW/208 GWh by FY 2029-30.
Viability Gap Funding (VGF) Schemes:
Initial VGF scheme, approved in 2023, initially targeted 4,000 MWh BESS capacity by FY 2030-31 with ₹3,760 crore allocation, now increased to 13,220 MWh within the same budget.
A second VGF scheme approved by the Ministry of Power allocates ₹5,400 crore from the Power System Development Fund (PSDF) for 30 GWh BESS capacity.
Inter-State Transmission System (ISTS) Charges Waiver:
Full waiver of ISTS charges for co-located BESS projects commissioned by June 30, 2028.
Role of Energy Storage Systems (ESS):
ESS (including BESS and Pumped Storage Projects (PSPs)) are critical for achieving 500 GW non-fossil fuel capacity by 2030.
ESS facilitates the storage of surplus renewable energy for use during peak demand, improving grid flexibility and reducing curtailment.
ESS supports Load Dispatch Centers (LDCs) in providing ancillary services, enhancing grid reliability.
Grid Modernization:
A Task Force recommended a roadmap for a smart grid, including repowering transmission lines, deploying Flexible AC Transmission Systems (FACTS), and adopting Dynamic Line Loading (DLL).
Recommendations also included installing energy storage, upgrading protection systems, and converting substations to Gas Insulated Switchgear (GIS).
Standard Bidding Guidelines:
Standard Bidding Guidelines issued for grid-connected renewable energy projects to promote transparency and competition.
Letters of Award (LoAs) issued by Renewable Energy Implementation Agencies (REIAs) are valid for one year.
LoAs will be canceled if Distribution Licensees (DISCOMs) do not enter into Power Purchase Agreements (PPAs) within this period.
REIAs are advised to aggregate demand from Distribution Licensees before inviting bids to expedite PPA signing.
Decentralized Renewable Energy Sources:
PM Surya Ghar Muft Bijli Yojana promotes rooftop solar.
Feeder-level integration of small Renewable Energy (RE) plants is implemented under the PM-KUSUM scheme.
Amendments to Electricity Rights of Consumers Rules, 2020:
Exemption from technical feasibility study for rooftop solar systems up to 10 kW.
Technical feasibility study must be completed within 15 days, or approval is presumed.
Distribution licensees bear the cost of distribution system strengthening for rooftop systems up to 5 kW.
Timeline for DISCOMs to commission rooftop solar PV systems reduced from 30 to 15 days.
Impact Analysis:
Central Electricity Authority (CEA):
Impact: Responsible for estimating BESS capacity requirements.
Action Required: Continue to monitor and update BESS capacity projections to align with renewable energy targets.
Ministry of Power:
Impact: Oversees policy initiatives and funding for BESS deployment and grid modernization.
Action Required: Implement VGF schemes, monitor ISTS charge waivers, and drive the grid modernization roadmap.
Renewable Energy Implementation Agencies (REIAs):
Impact: Responsible for issuing Letters of Award (LoAs) and managing bidding processes for renewable energy projects.
Action Required: Aggregate demand from Distribution Licensees (DISCOMs) before inviting bids and ensure PPAs are signed within one year of LoA issuance.
Distribution Licensees (DISCOMs):
Impact: Required to enter into PPAs with REIAs within one year of LoA issuance and promote rooftop solar deployment.
Action Required: Expedite PPA signing, facilitate rooftop solar installations, and bear distribution system strengthening costs for systems up to 5 kW.
Consumers (Prosumers):
Impact: Benefit from simplified rooftop solar installation procedures and reduced commissioning timelines.
Action Required: Take advantage of streamlined processes and incentives to adopt rooftop solar systems.
Key Entities Referenced
Battery Energy Storage System: Technology to store electrical energy for later use, crucial for grid stability and renewable energy integration.
500 GW of non-fossil fuel-based capacity by 2030: India's target for renewable energy capacity by 2030, a key driver for energy storage deployment.
Tamil Nadu: A state in southern India with high renewable energy potential, specifically wind and solar.
Central Electricity Authority: A statutory organization responsible for overall planning and coordination of the power sector in India. (CEA)
Viability Gap Funding: A financial support mechanism to make projects economically viable. (VGF)
Power System Development Fund: A fund established to support the development of the power system in India. (PSDF)
Inter-State Transmission System: The high voltage backbone transmission network connecting different states in India (ISTS).
PM Surya Ghar Muft Bijli Yojana: Government scheme to promote rooftop solar adoption by providing subsidies and simplifying installation procedures.
GOVERNMENT OF INDIA
MINISTRY OF POWER
LOK SABHA
UNSTARRED QUESTION NO.1914
ANSWERED ON 31.07.2025
SCALING UP OF BATTERY ENERGY STORAGE SYSTEM
1914. MS. S JOTHIMANI:
Will the Minister of POWER
be pleased to state:
(a) the roadmap of the Government for the deployment and scaling up of Battery Energy
Storage Systems (BESS) to support grid stability and facilitate the integration of variable
renewable energy;
(b) the anticipated role of energy storage infrastructure in enabling India to achieve its
target of 500GW of non-fossil fuel-based capacity by 2030 particularly in high renewable
potential States like Tamil Nadu;
(c) whether the Government is undertaking efforts to modernize grid infrastructure and
streamline Power Purchase Agreements (PPAs) with Distribution Companies (DISCOMs) to
address delays and risks in renewable energy procurement especially in the southern grid and
if so, the key initiatives underway; and
(d) the steps being taken by the Government to strengthen decentralized renewable energy
sources such as rooftop solar, small wind and hybrid systems in rural and peri-urban areas of
Tamil Nadu and other southern States including integration with ongoing DISCOM reform
measures?
A N S W E R
THE MINISTER OF STATE IN THE MINISTRY OF POWER
(SHRI SHRIPAD NAIK)
(a) : Central Electricity Authority (CEA) has estimated 41.6 GW / 208 GWh Battery Energy
Storage System (BESS) capacity up to FY 2029-30. To support the development of BESS,
Government has undertaken several key policy initiatives:
i) A Viability Gap Funding (VGF) scheme, approved in 2023, initially aimed to support
4,000 MWh of BESS capacity by FY 2030-31 with a budgetary allocation of ₹3,760 crore.
With falling battery costs, the target capacity has now been increased to 13,220 MWh
while remaining within the same budget.
ii) A second VGF scheme has been approved by the Ministry of Power to develop 30 GWh
of BESS capacity, with a financial support of ₹5,400 crore from the Power System
Development Fund (PSDF).
iii) Full waiver of Inter-State Transmission System (ISTS) charges has been granted for co-
located BESS projects commissioned up to 30th June, 2028.
……..2.- 2 -
(b) : Energy Storage Systems (ESS), including BESS and Pumped Storage Projects (PSPs),
will play a critical role in achieving India's target of 500 GW of non-fossil fuel-based capacity
by 2030, especially in renewable-rich states like Tamil Nadu. ESS enables storage of surplus
power generated during periods of high wind and solar output, which can then be dispatched
during peak demand. ESS can be deployed across the generation, transmission, and
distribution segments of the power system. This improves grid flexibility, enhances the
utilisation of transmission infrastructure, and reduces renewable energy curtailment.
Furthermore, ESS supports Load Dispatch Centres (LDCs) in delivering ancillary services, such
as frequency regulation and voltage control, thereby strengthening overall grid reliability.
(c) : To modernise the transmission system, the Ministry of Power constituted a Task Force,
which recommended a comprehensive roadmap for creating a smart and future-ready grid. Key
measures include re-powering of existing transmission lines, deployment of Flexible AC
Transmission Systems (FACTS), and adoption of Dynamic Line Loading (DLL) to optimise power
flow based on real-time conditions. The Task Force also proposed installation of energy
storage systems to improve transmission system utilisation and resilience, upgradation of
protection and control systems, and conversion of aging substations into Gas Insulated
Switchgear (GIS) or hybrid substations. Implementation of several recommendations is
already in progress.
The Ministry has issued Standard Bidding Guidelines for procurement of power from
grid-connected renewable energy projects to promote transparency, enhance competition,
and accelerate the deployment of clean energy. Letters of Award (LoAs) issued by REIAs to
successful bidders will remain valid for only one year. If Distribution Licensees do not enter
into PPAs with the Renewable Energy Implementation Agency (REIA) within this period, the
corresponding LoAs will be deemed cancelled. To fast-track the signing of Power Purchase
Agreements (PPAs), REIAs have been advised to aggregate demand from Distribution
Licensees before inviting bids.
(d) : Under the PM Surya Ghar Muft Bijli Yojana DISCOMS are promoting roof top solar. The
feeder-level integration of small Renewable Energy (RE) plants is being implemented under the
PM-KUSUM scheme.
To further streamline rooftop solar deployment, the Electricity (Rights of Consumers)
Rules, 2020 were amended in February 2024 to simplify procedures and improve ease of
installation for prosumers. Key amendments include:
Exemption from technical feasibility study for systems up to 10 kW capacity.
The technical feasibility study shall be completed within a period of fifteen days and
the outcome of the study shall be intimated to the applicant, failing which it shall be
presumed that the proposal is technically feasible.
The cost of distribution system strengthening for rooftop systems up to 5 kW will be
borne by the distribution licensee.
The timeline for commissioning rooftop solar PV systems by DISCOMs has been reduced
from 30 days to 15 days.
These measures are expected to accelerate rooftop solar adoption and enhance
consumer participation in decentralized renewable energy generation in rural and peri-urban
areas of Tamil Nadu and other southern States.
**********