India Needs INR 4 Lakh Crore for Storage by FY32- CareEdge Ratings

India may require more than INR 4 lakh crore in energy storage-related investments by FY32 as the country's power sector shifts from adding generation capacity to integrating a growing share of renewable energy, according to a CareEdge Ratings report.

The report estimated India's energy storage requirement at around 411 GWh by FY32, compared with operational storage capacity of about 54 GWh as of June 2026. CareEdge said that the projected increase reflects the need to manage variable renewable generation and maintain grid flexibility as renewable capacity expands.

Non-fossil sources currently account for around 50 percent of India's installed power generation capacity but contribute about 29 percent of actual electricity generation, highlighting the growing requirement for storage, transmission infrastructure and flexible generation, the report said.

Standalone energy storage tenders have also increased sharply, rising to around 21 GW in FY26 from 7 GW in FY25. The report said  that Battery Energy Storage Systems (BESS) and Pumped Storage Plants (PSPs) would play complementary roles in supporting the integration of renewable energy into the power system.

The report also highlighted the continued role of coal-based thermal power in meeting rising electricity demand and providing flexibility to the grid. Well-contracted coal-based thermal assets are expected to remain relevant as renewable generation increases, CareEdge said.

Alongside storage, the transmission sector is expected to require significant investment. CareEdge estimated transmission-sector capex at around INR 5.19 lakh crore between FY27 and FY31.

However, the report identified right-of-way issues, forest clearances and coordination requirements as key execution challenges for transmission projects. It said that operational transmission assets continue to have a stable cash-flow profile and long concession tenures, supporting the sector's credit profile.

The government's own projections also point to a significant build-out of storage. The Ministry of Power said  that in July 2026 that BESS requirements could reach 47.24 GW/236 GWh and pumped storage requirements 26.69 GW/175 GWh by 2031-32, with estimated investments of INR 3.49 lakh crore and INR 1.29 lakh crore, respectively.