Centre Plans Mandatory Energy Storage Procurement for Discoms by March 2027

The Centre is planning to make energy storage procurement mandatory for electricity distribution companies (discoms) as part of their renewable energy purchases, with regulations expected to be finalised by March 2027. The proposed requirement aims to reduce renewable power curtailment, improve grid reliability and increase the utilisation of clean electricity.

Power Secretary Pankaj Agarwal said that the proposed mandate would apply to licensed utilities, while renewable energy developers would also be required to integrate energy storage into their projects.

Speaking at the Bharat Renewable Energy Summit in New Delhi, Agarwal said the government was examining minimum energy storage requirements, with proposals including storage capacity equivalent to 10 percent and 20 percent for two-hour durations. However, the final requirement is yet to be determined.

The government plans to complete stakeholder consultations and notify the regulations within the next three months, targeting the end of the current financial year. The existing advisory asking renewable energy developers to integrate storage is also expected to be converted into mandatory regulations. This would be accompanied by requirements for discoms to procure storage along with renewable power.

The proposed mandate follows the Union Cabinet's approval of a INR 14,500 crore viability gap funding (VGF) programme to support the development of 92 GWh of energy storage capacity by FY2031. The programme covers battery energy storage systems, pumped hydro storage and emerging storage technologies.

The move comes amid increasing renewable energy curtailment, with around 11 percent of solar power generated during the hottest months of 2026 reportedly lost due to grid restrictions, despite record electricity demand.

Energy storage systems can help address the mismatch between renewable power generation and electricity demand by storing surplus solar and wind power and supplying it during periods of higher consumption. They can also improve grid stability and enable more efficient utilisation of existing transmission infrastructure.