Power Sector Modernization and Capacity Addition Update
The Ministry of Power reported significant progress in India's power sector modernization and reliable electricity supply initiatives. During FY 2025-26, India added 9,470 MW of fossil fuel-based capacity and 55,225 MW of non-fossil fuel-based capacity. Additionally, 2,668.54 MW / 7,785.6 MWh of Battery Energy Storage System (BESS) capacity was added during 2026, along with 12,139 circuit kilometres of inter-State and intra-State transmission lines.
Renewable Energy Integration and Grid Modernization
The government is implementing coordinated transmission planning through the National Electricity Plan to avoid congestion and minimize curtailment. The plan includes integrating 47 GW of Battery Energy Storage Systems by 2031-32 and a roadmap for 100 GW Pumped Storage Plants from 2025-26 to 2035-36. Measures include developing RE Zones and pooling stations, strengthening grid operations with improved forecasting and real-time dispatch, and market reforms such as real-time electricity markets. The Third Amendment to CERC General Network Access Regulations allows separate connectivity for solar and non-solar hours to optimize transmission asset utilization.
Energy Storage Initiatives
The Ministry of Heavy Industries launched the ₹18,100 crore PLI scheme for Advanced Chemistry Cell battery storage to establish 50 GWh domestic manufacturing capacity, with 10 GWh earmarked for Grid Scale Stationary Storage. The Ministry of Power notified guidelines for BESS procurement and utilization in March 2022 and issued Tariff-Based Competitive Bidding Guidelines for ESS procurement. A Viability Gap Funding scheme approved 13.22 GWh BESS capacity with ₹3,760 crore allocation, and in June 2025, another VGF scheme was approved for 30 GWh BESS capacity with ₹5,400 crore from Power System Development Fund. ISTS charges were waived 100% for BESS projects commissioned by June 2025 and PSP projects awarded by June 2025, with extensions until June 2028 for co-located BESS and PSP projects.
Distribution Sector Reforms
The Revamped Distribution Sector Scheme (RDSS) launched in July 2021 sanctioned ₹1.53 lakh crore for loss reduction and ₹1.31 lakh crore for smart metering, covering 19.79 crore consumer meters, 52.53 lakh Distribution Transformer meters, and 2.05 lakh feeder meters totaling 20.33 crore smart meters. As of now, 5.73 crore smart meters have been installed under RDSS, with 7.24 crore total smart meters installed across various schemes. Additional reforms include 0.5% GSDP borrowing space for states conditional on power sector reforms, additional prudential norms for state power utility loans, Fuel and Power Purchase Costs Adjustment rules, and subsidy accounting procedures.
Performance Improvements
These efforts resulted in AT&C losses reducing from 21.91% in FY21 to 15.04% in FY25. Distribution utilities achieved aggregate profit after tax of ₹2,701 crore in FY25 for the first time since the Electricity Act, 2003. Power supply availability increased from 12.5 hours in FY2015 to 22.6 hours in rural areas and 23.6 hours in urban areas in FY2025.