CEA proposes mandatory storage for solar, wind projects
The Central Electricity Authority (CEA) issued a draft notification on September 3, 2026, under Section 177 of the Electricity Act, 2003, proposing mandatory co-located energy storage and grid-forming inverter capability for new solar and wind power projects.
Under the draft, ground-mounted solar and onshore wind projects commissioned on or after July 1, 2027 would need co-located energy storage equivalent to at least 10% of installed capacity, with a minimum storage duration of two hours.
For projects commissioned from July 1, 2029 to June 30, 2031, the storage duration requirement rises to a minimum of four hours, while the 10% capacity threshold stays unchanged.
Renewable power plants commissioned after July 1, 2027 would also need at least 15% of their inverters to have grid-forming control, and all power conversion systems of battery energy storage systems (BESS) would be required to have grid-forming control.
The CEA has invited suggestions, comments and objections from stakeholders and the public on the draft, with the comment window open until October 4, 2026; the CEA retains the discretion to revise the storage and grid-forming percentage requirements over time.
Central Electricity Authority (CEA) — Statutory Basis under the Electricity Act, 2003
The CEA is a statutory body constituted under the Electricity Act, 2003, functioning under the Ministry of Power. Its core duties are laid down in Section 73 of the Act, which includes preparing the National Electricity Plan and specifying technical standards for construction of electrical plants, electric lines, and grid connectivity. Section 177 empowers the CEA to make regulations, by notification, to carry out the provisions of the Act — this is the specific statutory route used to issue the current draft on mandatory storage and grid-forming standards.
The mandatory storage and grid-forming proposal is being issued as a draft regulation under Section 177, following CEA's established statutory role in setting technical standards for grid connectivity — the same legal route used for its 2007 grid connectivity regulations.
Energy Storage Obligation (ESO) — Distinct from Renewable Purchase Obligation (RPO)
The Energy Storage Obligation (ESO) is a distinct regulatory mechanism from the Renewable Purchase Obligation (RPO). While RPO requires designated obligated entities (distribution licensees, open-access consumers, captive power users) to source a rising share of their electricity consumption from renewable sources, ESO specifically requires a share of consumption to come through energy storage systems, ensuring that stored renewable power — not just renewable generation — becomes part of the supply mix to address intermittency.
Key Details
- The Ministry of Power notified the RPO and ESO trajectory up to FY 2029-30 in 2022
- ESO rises from 1% in FY 2023-24 to 4% by FY 2029-30, in annual increments of about 0.5%
- ESO is fulfilled only when at least 85% of the energy stored and drawn from the storage system annually is sourced from renewable energy
- Combined RPO (wind, hydro, other renewables) is set to progressively rise toward about 43.33% by 2029-30
- Renewable power procured via a storage system also counts toward RPO compliance, linking the two obligations
The CEA's proposed mandatory co-located storage for new solar/wind projects operates alongside the ESO framework — both push storage integration into the renewable energy value chain, but ESO obligates the consumption side (distribution licensees) while the CEA draft obligates the generation/project side (project developers) directly.
Battery Energy Storage Systems (BESS) and the Viability Gap Funding (VGF) Scheme
Battery Energy Storage Systems store electricity chemically (commonly lithium-ion) and discharge it on demand, allowing intermittent solar and wind generation to be time-shifted to periods of peak demand, thereby improving grid reliability and enabling more predictable, dispatchable renewable power. To bring down the high upfront cost of BESS, the Union Cabinet approved a Viability Gap Funding (VGF) scheme in 2023, offering budgetary support for a share of capital cost.
Key Details
- VGF scheme approved by the Union Cabinet, envisaging development of 4,000 MWh of BESS by 2030-31 with financial support up to 40% of capital cost, within a budgetary outlay of ₹3,760 crore
- Owing to falling battery costs, scheme capacity was later scaled up (to about 13,200 MWh) within the same budgetary allocation, with VGF support reducing to about ₹46 lakh per MWh or 30% of capital cost, whichever is lower
- Fund disbursement is staggered — a portion on financial closure, a larger tranche on Commercial Operation Date (COD), and the remainder spread over subsequent years
- VGF support applies to BESS projects approved during 2023-26
The CEA's proposed mandate for co-located storage (10% of installed capacity, 2-4 hour duration depending on commissioning date) creates a direct demand pull for BESS capacity that schemes like the VGF are designed to make commercially viable for developers.
Grid Integration of Variable Renewable Energy — Grid-Forming vs Grid-Following Inverters
Solar and wind generation is inherently variable (intermittent), and as their share in the grid rises, maintaining voltage and frequency stability becomes harder because conventional (grid-following) inverters merely synchronise with an existing grid signal rather than actively stabilising it. Grid-forming inverters, by contrast, actively establish and regulate voltage and frequency themselves, offering better stability in "weak grid" or low-inertia conditions and even enabling standalone (islanded) microgrid operation — a capability increasingly important as India's non-fossil capacity share rises.
Key Details
- Grid-following inverters use a phase-locked loop to track the grid's existing voltage phase; they are stable in strong grids but prone to instability as renewable penetration rises
- Grid-forming inverters use power synchronisation control to autonomously set voltage magnitude and phase, and can sustain stable operation even without synchronous (thermal/hydro) generation nearby
- India's power system operator, Grid Controller of India Limited (GRID-INDIA), has separately studied grid-forming technology applications for the Indian grid given rising renewable penetration
- Round-the-clock (RTC) renewable power — pairing variable solar/wind with storage or complementary sources — is the broader policy goal that mandatory co-located storage and grid-forming inverters both serve
The CEA's draft directly mandates that at least 15% of inverters in new renewable projects (and all BESS power conversion systems) have grid-forming control, reflecting the shift from "grid-following" to "grid-forming" technology as a technical prerequisite for a grid increasingly dominated by variable renewable energy.
India's Non-Fossil Fuel Capacity Target and RE Growth Trajectory
India's updated Nationally Determined Contribution (NDC), submitted in August 2022 under the Paris Agreement, targets 50% of cumulative installed electric power capacity from non-fossil fuel sources by 2030. A related target of 500 GW of installed non-fossil fuel capacity by 2030 has been reiterated in national policy documents, up from an earlier 175 GW renewable energy goal for 2022.
Key Details
- Updated NDC (August 2022): 50% cumulative electric power capacity from non-fossil sources by 2030; also includes a target of reducing emissions intensity of GDP
- India's installed renewable capacity stood at about 288 GW as of June 30, 2026 (roughly 162 GW solar and 57 GW wind), with about 149 GW of additional capacity in the project pipeline
- India crossed the 50% non-fossil share of installed capacity milestone well ahead of the 2030 deadline
- The 500 GW non-fossil capacity figure was announced as a national goal at COP26 (2021) and is tracked in domestic planning even though it is not the literal wording of the formal NDC submission
As renewable capacity scales toward the 500 GW non-fossil target, intermittency and grid-stability concerns intensify — the CEA's mandatory storage and grid-forming proposal is a technical-standards response designed to keep the grid stable while this capacity addition continues.
- Draft notification issued: September 3, 2026, under Section 177 of the Electricity Act, 2003
- Public comment deadline on the draft: October 4, 2026
- Storage mandate (Phase 1, projects commissioned July 1, 2027 – June 30, 2029): 10% of installed capacity, minimum 2-hour duration (e.g., 100 MW project → 10 MW/20 MWh storage)
- Storage mandate (Phase 2, projects commissioned July 1, 2029 – June 30, 2031): 10% of installed capacity, minimum 4-hour duration (e.g., 100 MW project → 10 MW/40 MWh storage)
- Grid-forming inverter requirement: at least 15% of inverters in new renewable projects commissioned after July 1, 2027; all BESS power conversion systems must have grid-forming control
- Applies to ground-mounted solar and onshore wind projects
- ESO trajectory: rises from 1% (FY 2023-24) to 4% (FY 2029-30); RPO trajectory rises toward ~43.33% by FY 2029-30
- BESS VGF scheme: originally 4,000 MWh target by 2030-31 (up to 40% capital cost support, ₹3,760 crore outlay), later scaled to ~13,200 MWh within the same budget as VGF per-MWh support declined
- India's renewable capacity (as of June 30, 2026): ~288 GW (~162 GW solar, ~57 GW wind), with ~149 GW in the pipeline
- India's 2030 non-fossil target: 50% of cumulative installed capacity from non-fossil sources (updated NDC, August 2022); 500 GW non-fossil capacity referenced as the associated national goal