New Delhi [India], September 28 (ANI): India's shift towards renewable power is expected to create a major requirement for energy storage, with over Rs 4 lakh crore of storage-related investment estimated to be needed by FY32, according to CareEdge Ratings.
The report said India's power sector is moving from a challenge of adding generation capacity to a new challenge of integrating increasing renewable capacity into the electricity system.
While non-fossil sources account for around 50 per cent of India's installed power generation capacity, they contribute around 29 per cent of actual electricity generation.
This gap makes energy storage, transmission infrastructure and flexible generation increasingly important as the share of renewable power rises.
The report highlighted that India's energy storage requirement is expected to reach around 411 GWh by FY32, compared with operational storage capacity of around 54 GWh as of June 2026.
It stated, “CareEdge Ratings estimates storage-related capex of over Rs 4 lakh crore to meet FY32 requirements”.
It also added that the rise in storage requirements reflects the need to integrate renewable generation into the power system and ensure that electricity produced from variable renewable sources can be managed effectively.
The report also pointed to a sharp increase in standalone storage-based tenders. Such tenders rose to around 21 GW in FY26 from 7 GW in FY25, indicating growing activity in the energy storage segment.
The agency highlighted the complementary roles of Battery Energy Storage Systems (BESS) and Pumped Storage Plants (PSPs) in supporting India's power transition. Both technologies are expected to have an important role as the country adds more renewable generation capacity.
At the same time, CareEdge Ratings said coal-based thermal power is entering a multi-year phase of improved credit stability and renewed investment relevance.
Well-contracted coal-based thermal power assets are likely to remain important for meeting growing electricity demand while also providing the flexibility required to integrate increasing renewable capacity, the report said.
This indicates that the expansion of renewable energy is likely to be accompanied by investments in other parts of the power system rather than replacing conventional generation immediately. Storage and flexible generation would help manage renewable power, while transmission infrastructure would be required to move electricity across the grid.
The transmission sector is also expected to see significant investment. The report estimates a capex outlay of around Rs 5.19 lakh crore during FY27-FY31.
However, the agency identified several execution-related challenges for the transmission sector, including right-of-way issues, forest clearances and coordination requirements.
Despite these challenges, it said the stable cash flow profile and long concession tenures of operational transmission assets continue to support the sector's credit profile. (ANI)
India may need over Rs 4 lakh crore investment in energy storage by FY32: Report
