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New Delhi: In a strategic push for Renewable Energy (RE) expansion and its integration into the power grid, the Ministry of Power will issue a tender for 30 gigawatt hours (GWh) of Battery Energy Storage Systems (BESS) within the next three months. This initiative will be backed by a Rs 5,400-crore viability gap funding (VGF) scheme, offering support at Rs 18 lakh per megawatt hour. Combined with the 13.2 GWh already under implementation, the plan is expected to attract around Rs 33,000 crore in investments and help meet India’s energy storage requirements by 2028, announced Minister for Manohar Lal Khattar on Tuesday.
To lower project costs and accelerate deployment, the ministry has also extended the waiver of Inter-State Transmission System (ISTS) charges for all BESS and pumped storage projects (PSPs) until June 30, 2028, the minister told reporters during a media interaction on achievements of the Bharatiya Janata Party-led government at the Centre in the last 11 years. The extension will apply to BESS and PSPs commissioned before June 30, 2028. This extension is crucial for meeting India’s growing storage needs and optimising the utilisation of transmission lines, said Khattar.
The ministry said that ISTS charges waiver for hydro PSP projects for which the construction work has been awarded on or before June 30, 2028 shall be 100 percent. In addition, for co-located BESS projects, commissioned on or before June 30, 2028, if the power is being consumed outside of the state where the BESS project is located, the ISTS waiver will be 100 percent, said the Ministry of Power.
According to the Ministry, approximately 5.4 GW of PSP capacity has been awarded, bringing total PSPs under implementation to 10 GW across eight projects, with an additional 2.5 GW currently under bidding.
To support large-scale power evacuation, the ministry approved transmission schemes totaling 9,250 circuit kilometers (ckm) to evacuate 63 GW of power under ISTS at a cost of Rs 65,000 crore. It also awarded projects covering 22,050 ckm (198 GVA) to handle 109 GW of capacity across 44 ISTS projects, valued at ₹1.46 lakh crore. During 2024–25, 9,059 ckm of transmission lines of 220 kV and above were commissioned, taking the national network length to 4.95 lakh ckm, said Khattar.
To ease right of way (RoW) hurdles in transmission development, the ministry increased landowner compensation: tower area compensation now stands at 200 percent of land value (up from 85 percent), while the RoW corridor compensation has been raised to 30 percent (from 15 percent). This compensation is now linked to the market value assessed by registered valuers, under guidelines issued on March 21, 2025. States such as Haryana and Delhi have adopted these guidelines.
The ministry has also expanded the scope of the Late Payment Surcharge (LPS) Rules to include intra-state transmission systems. This reform—previously applicable only to inter-state networks—is intended to attract greater private investment and support the expansion of state-level grid infrastructure to absorb growing renewable energy capacity.
In parallel, standard bidding documents for inter-state transmission services were updated on June 5, 2025, to allow alternative financial securities such as insurance surety bonds and payment-on-order instruments under the tariff-based competitive bidding (TBCB) process.
According to the Ministry of Power, India met a record peak power demand of 250 GW in May 2025—up from 130 GW in 2014—with zero peak shortages recorded as of June 2025. Total electricity generation grew by 5.2 percent in FY 2024–25, reaching 1,829 billion units (BU). Rural electricity supply now averages 22.6 hours per day (up from 12.5 hours in 2014), while urban areas average 23.4 hours.
India’s installed generation capacity stands at 475 GW as of March 2025, out of which 34 GW was added in 2024–25 alone—the highest ever. Of the total capacity addition, 29.5 GW of this came from renewable energy in 2024-25, said Khattar. On the thermal side, 5.17 GW was commissioned in the past year, and 23.16 GW awarded.
India is preparing to transition to ultra high voltage alternating current (UHVAC) systems. The ministry has identified nine 1,100 kV transmission lines and 10 substations for development by 2034. Testing infrastructure is being developed by the Central Power Research Institute (CPRI), and the total investment for this transition is projected at Rs 53,000 crore.
Beyond the BESS plans, the ministry has expanded financial support for hydro projects. In September 2024, it broadened budgetary assistance for enabling infrastructure—such as transmission lines, roads, and rail sidings—for hydro projects totaling 31 GW, with an outlay of Rs 12,461 crore. For North Eastern states, a special scheme was launched in August 2024 to support 15 GW of hydro capacity, offering up to Rs 750 crore per project as Central Financial Assistance (CFA).
Recent commissions include the 800 MW Parbati-II in Himachal Pradesh, 250 MW Tehri PSP in Uttarakhand, and a 680 MW unit of Bhutan’s Punatsangchhu-II project, among others.
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