MoP announces major reforms in storage and grid upgrades
Author: PPD Team Date: 11/06/2025
Union Minister Shri Manohar Lal outlined key achievements and forward-looking reforms in the power sector during a press conference in New Delhi. Marking 11 years of sectoral transformation, the minister said India is now power sufficient and progressing toward surplus, with plans to achieve 100% household electrification.
India meets peak demand with zero shortage
India successfully met a peak power demand of 241 GW on June 9, 2025, with no reported shortage. This reflects the resilience of the country’s transmission and generation infrastructure.
Battery storage gets Rs 5,400 crore VGF support
The Ministry of Power has approved a Viability Gap Funding (VGF) scheme for 30 GWh of Battery Energy Storage Systems (BESS). This will be in addition to the 13.2 GWh capacity already in the pipeline. The scheme is expected to mobilise Rs 33,000 crore in investments and help meet BESS requirements by 2028.
ISTS waiver extended for storage projects
The waiver of Inter-State Transmission System (ISTS) charges for storage projects has been extended to June 30, 2028. This will apply to pumped storage projects awarded and BESS commissioned before that date.
New UHV AC transmission system by 2034
India plans to develop nine 1100 kV Ultra High Voltage Alternating Current (UHV AC) transmission lines and ten substations by 2034. The Central Power Research Institute is setting up testing facilities. The total investment is projected to be Rs 53,000 crore.
Compensation for transmission land use increased
The Centre has revised compensation rates for land used in laying power transmission lines. Tower area compensation has increased from 85% to 200% of land value, and RoW corridor compensation from 15% to 30%. Haryana and Delhi have adopted the new guidelines issued in March 2025.
Private investments encouraged in state grids
Late Payment Surcharge (LPS) Rules have been extended to Intra-State Transmission Systems to improve payment discipline and attract private investments. These reforms aim to strengthen state grids for better renewable energy absorption.
Record 34 GW capacity added in FY25
India added a record 34 GW of power generation capacity in 2024-25. Renewable energy led the growth with 29.5 GW. The country’s total installed capacity has reached 472.5 GW, up from 249 GW in 2014.
Tehri PSP adds 250 MW to grid
The first 250 MW unit of the Tehri Pumped Storage Project in Uttarakhand has been commissioned. It will support peak demand management and grid stability.
Energy shortage drops to 0.1%
India’s national energy shortage stood at just 0.1% in April 2025, a significant drop from 4.2% in 2013-14. The improvement is attributed to expanded generation and transmission capacity.