India to make storage procurement mandatory for discoms, rules targeted for March 2027

What the mandate would cover

Speaking at the Bharat Renewable Energy Summit in New Delhi, Agarwal said proposals under examination involve storage equal to 10% and 20% of capacity for two-hour durations. The final requirement and the implementation timeline remain undecided. An existing advisory asking developers to integrate storage at their projects would become binding regulation. The move aims to cut electricity shortages during evening and night-time hours and improve grid reliability.

Discoms must fund the storage on top of renewable purchases. Those costs reach consumers only if regulators allow timely tariff revisions.

The ₹14,500 crore behind the rule

The mandate follows money. The Union Cabinet approved ₹14,500 crore in viability gap funding a day before Agarwal spoke.

The VGF scheme supports 92 GWh of grid-scale storage between FY27 and FY31. It covers 60 GWh of pumped hydro, 30 GWh of battery storage and 2 GWh of emerging technologies. The projects are expected to draw total investment of around ₹97,600 crore. Government support will cover roughly 15% of the cost. Battery projects must meet a minimum domestic content requirement of 40%. Public and private sector discoms will be eligible for support for battery storage and pumped hydro projects.

Why the grid needs it

The grid is already discarding power. About 11% of solar generated during the hottest months this year went to waste. Grid restrictions caused the loss despite record demand.

Nationally, curtailment rose nearly fourfold between May and August 2026 compared with the previous year. In Rajasthan, curtailment reached 11.5 GW cumulatively between January and March 2026. Some projects faced near-total shutdowns during peak solar hours. Storage contributes about 1% to 2% of national peak demand. India has more than 300 GW of non-fossil fuel generation capacity. It still relies on coal plants in the evening and at night, when solar output falls. JMK Research & Analytics put demand-generation mismatches, transmission constraints and limited storage among the main reasons for curtailment.

The Central Electricity Authority projects India will need 411 GWh of storage by 2031-32.

State rules and tenders already moving

States are not waiting for New Delhi. Tamil Nadu's BESS Policy 2026 requires new solar and wind-solar hybrid projects of 1 MW and above to install battery storage equal to at least 10% of solar capacity. Gujarat's regulator has approved tariffs for GUVNL to procure 450 MW/900 MWh of standalone battery capacity under Phase IX.

SECI has tendered 2,500 MW/10,000 MWh of standalone battery storage in Rajasthan and 1,500 MW/6,000 MWh in Gujarat, with bids closing on 19 November 2026. Green Energy Corridor Phase III carries a ₹1.86 lakh crore outlay, including ₹50,000 crore for 50 GWh of battery storage. The scheme has a completion target of FY2033 and aims to evacuate up to 135 GW of renewable power. From July 2027, a separate regulation will require developers of solar and wind projects to install battery storage at their sites. UPERC has approved Noida Power Company's plan to buy 300 MW of firm, dispatchable round-the-clock renewable power for 25 years through competitive bidding.

What happens next

The government aims to complete consultations and notify the regulations by March 2027.

SECI's ESS-V battery storage bids close on 19 November 2026. That comes first. Agarwal said the government is also working to launch additional clean energy tenders for energy storage.