India approves $1.5b grid storage push to power clean energy drive

India's push for energy security reflects its vulnerability to geopolitical upheavals, including the recent fuel crisis triggered by the US-Israel war with Iran

In its latest push to expand India's energy security and storage capacity as it accelerates the shift towards renewable energy, Prime Minister Narendra Modi's government has approved a $1.5 billion scheme to develop 92 gigawatt-hours of grid-scale energy storage capacity across the country.

The scheme aims to support the development of 92 GWh of yet-to-be-commissioned energy storage capacity, equivalent to 170% of India's existing grid-scale energy storage capacity, the government announced this week.

The grid storage system will run from 2026-27 to 2030-31 and support the development of 60 GWh of pumped hydro storage, 30 GWh of battery storage and another 2 GWh through emerging storage technologies.

The government expects the projects to attract around $10 billion in investments over the next five years.

Announcing the scheme on X, Modi said it would help improve power reliability, enable greater integration of renewable energy and strengthen the country's energy security.

"The Cabinet has approved a massive Rs14,500 crore push to develop 92 GWh of energy storage capacity, supporting an estimated investment of almost 1 lakh crore," Modi said.

"Truly, it is more reliable power, greater renewable energy integration and stronger energy security," he added.

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Renewable energy and security

India's push for energy security reflects its vulnerability to geopolitical upheavals, including the recent fuel crisis triggered by the US-Israel war with Iran, which exposed the risks that such disruptions pose to its economy and its population of more than 1.4 billion.

It has set ambitious targets for its clean energy transition, including achieving net-zero emissions by 2070 and installing 500 GW of non-fossil fuel-based electricity capacity by 2030.

The South Asian nation is the world's third-largest greenhouse gas emitter after China and the United States, according to the United Nations Environment Programme (UNEP), and continues to depend heavily on coal to meet the soaring energy needs of its population.

Its greenhouse gas emissions reached approximately 4.5 billion tonnes of carbon dioxide equivalent in 2025, excluding land use and forestry, according to UNEP's Emissions Gap Report 2026. However, its per capita emissions of 3.1 tonnes were less than half the global average of 6.4 tonnes.

India faces pressure to curb its carbon emissions and invest in clean energy as it seeks to upgrade and expand its infrastructure.

It is also aiming to reduce its emissions intensity, the amount of greenhouse gas emitted for every unit of gross domestic product, by 45% by 2030, from 2005 levels.

Energy generation and storage

India has set a target of achieving 500 GW of installed electricity capacity from non-fossil fuel sources by 2030. More than half of the country's installed electricity capacity came from non-fossil fuel sources as of July 2026, according to government data.

India's renewable energy capacity has grown significantly, with solar power accounting for an increasing share of its installed clean energy capacity.

The country had around 171 GW of installed solar capacity as of September, while its combined large and small hydropower capacity stood at approximately 57 GW, according to the Ministry of New and Renewable Energy's monthly report, Physical Achievements.

The government has installed solar facilities in the warm states of Rajasthan, Gujarat, Maharashtra, Tamil Nadu and Karnataka, while hydropower projects are largely concentrated in the Himalayan states of Himachal Pradesh and Uttarakhand, as well as parts of coastal Karnataka.

Despite the rapid expansion of renewable energy, storage remains a major gap in India's clean energy transition.

The government estimates that India will need around 411 GWh of grid-scale energy storage by 2031-32, including 236 GWh of battery storage and 175 GWh of pumped hydro storage.

Around 9.1 GWh of battery energy storage capacity was operational by September 2026, according to the Centre for Research on Energy and Clean Air. This represents less than 4% of the battery storage capacity the country is projected to need by 2031-32.

India is also developing pumped-storage hydropower projects to help balance fluctuations in renewable power generation.

The need for storage is particularly important because solar power generation peaks during the day, while electricity demand often rises in the evening, when solar output falls.

Without sufficient storage, surplus renewable electricity can go unused, forcing power companies to rely on coal-fired plants to meet demand.

The government said the latest scheme would provide an “impetus to domestic manufacturing of battery energy storage systems, reduce import dependence and enhance the country's long-term energy security”.

As part of the initiative, battery storage projects will also have to meet a minimum domestic content requirement of 40%.

The government has separately approved a $300 million scheme to support the establishment of four domestic processing plants for lithium and nickel, two critical minerals widely used in electric vehicle batteries, energy storage systems and electronic products.

India currently relies heavily on imports of processed critical minerals. The government said building domestic processing facilities would be important to reduce that dependence.