India to Require State Utilities to Add Energy Storage Capacity
India’s federal power ministry will soon require state-run electricity distributors to add their own energy storage capacity, Power Ministry Secretary Pankaj Agarwal said at the Bharat Renewable Energy Summit on Thursday, as New Delhi tries to get ahead of a curtailment problem that is already costing the grid gigawatts of clean power. The announcement came in the same week the federal government approved a 145 billion rupee (roughly $1.54 billion) Viability Gap Funding scheme to support 92 gigawatt-hours of storage that has yet to be built, according to Reuters and a Press Information Bureau release.
Agarwal did not give a specific percentage, megawatt target or deadline for the new state-utility obligation, saying only that it is coming soon. It is a separate measure from a rule set to take effect in July 2027 that will require solar and wind developers themselves to install battery storage at their own project sites, which Indian regulators have been drafting for most of 2026.
A curtailment problem driving the policy
The push is a response to a specific, growing problem: solar and wind output that the grid cannot absorb in real time. JMK Research and Analytics estimates that as much as 118.6 gigawatts of solar and wind capacity was curtailed in September 2026 alone, a figure that points to how far India’s grid-balancing capacity has fallen behind its renewable build-out. India has spent the past decade adding utility-scale solar and wind faster than almost any other large economy, but without enough storage or flexible generation to absorb output when the sun is brightest or the wind is strongest, grid operators are forced to switch off panels and turbines that have already been built and paid for.
Mandating storage at the distribution-company level, rather than only at the generator level, is a notable shift: it puts the burden of balancing variable renewable output partly on the utilities that buy and deliver the power, not solely on the developers that build it.
What the funding covers
The newly approved Viability Gap Funding scheme breaks the 92 GWh target into three technologies: 30 GWh of battery storage, 60 GWh of pumped hydro storage, and 2 GWh of emerging storage technologies. Viability Gap Funding is a subsidy mechanism India has used for years to make otherwise marginal infrastructure projects bankable by covering part of the upfront capital cost; applying it to storage signals that the government still sees standalone battery and pumped-hydro projects as too expensive, on current economics, to attract financing without support.
Pumped hydro’s large 60 GWh share is notable: India has a deep inventory of potential pumped-storage sites in its hilly states, and the technology offers far longer duration than most lithium-ion batteries, which matters for a grid that needs to shift solar output into the evening peak.
Context for a market already racing to add storage
India’s states have been moving ahead of the federal timeline in places. The Daily Energy has tracked a steady run of SECI battery energy storage tenders in India through 2026, and other emerging markets — Brazil and South Africa among them — have launched their own battery storage programs this year to manage similar renewables-driven grid strain. The federal mandate, once finalized, would put India’s distribution utilities under a more explicit, nationwide obligation than most of those state- or utility-level efforts to date.
Sources: Reuters, reporting on remarks by Power Ministry Secretary Pankaj Agarwal at the Bharat Renewable Energy Summit, Nov. 5, 2026, cited via Oilprice.com; Government of India Press Information Bureau, release on the Viability Gap Funding scheme approval, November 2026; JMK Research & Analytics, curtailment estimate for September 2026; The Daily Energy, “India Battery Storage Tenders: SECI BESS Tracker (2026),” Oct. 8, 2026.
Illustrative image. Photo: Kecko from Eastern Switzerland, CC BY 2.0, via Wikimedia Commons — source
