Ministry of Power Reports FY 2025-26 Capacity Additions and Modernization Initiatives
The Ministry of Power provided a comprehensive update on India's power sector modernization and reliable electricity supply initiatives. During FY 2025-26, significant capacity additions were achieved with 9,470 MW of fossil fuel-based capacity and 55,225 MW of non-fossil fuel-based capacity added to the grid. 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 Measures
The Central Government has implemented coordinated transmission planning through the National Electricity Plan to address RE intermittency, promoting a combination of energy storage and hybrid solutions. The plan considers 47 GW of Battery Energy Storage Systems for integration by 2031-32 and has prepared a roadmap for integrating 100 GW Pumped Storage Plants from 2025-26 to 2035-36. Development of RE Zones and pooling stations enables optimal evacuation of large renewable capacities through shared infrastructure. The Ministry of New Renewable Energy extended budgetary support for Intra-State transmission projects under the Green Energy Corridor scheme. Grid operations have been strengthened through improved forecasting, scheduling, real-time dispatch, and ancillary services. Market reforms including real-time electricity markets and flexibility mechanisms have been implemented. The Third Amendment to CERC General Network Access Regulations allows separate connectivity for solar and non-solar hours, while connectivity quantum is assessed for hybrid projects to optimize RE quantum. State-of-the-art Static Synchronous Compensators and Static VAR Compensators are being deployed to dynamically adjust reactive power flow, and generators with high ramp rates are scheduled optimally.
Energy Storage Development Initiatives
The Ministry of Heavy Industries launched the PLI scheme "National Programme on Advanced Chemistry Cell Battery Storage" in May 2021 with ₹18,100 crore outlay to establish 50 GWh domestic manufacturing capacity, including 10 GWh for Grid Scale Stationary Storage. Ministry of Power notified Guidelines for Procurement and Utilization of Battery Energy Storage Systems in March 2022. Tariff-Based Competitive Bidding Guidelines for procurement of ESS by distribution licensees have been notified. A National Framework for Promotion of Energy Storage Systems was issued in September 2023. Government approved a Viability Gap Funding scheme for development of 13.22 GWh BESS capacity with ₹3,760 crore budgetary allocation, and in June 2025 approved another VGF scheme for 30 GWh BESS capacity with ₹5,400 crore from Power System Development Fund. ISTS charges waiver of 100% applies for BESS projects commissioned by June 2025 and Hydro PSP projects with construction awarded by June 2025, with 25% annual reduction thereafter. Co-located BESS projects get 100% ISTS waiver until June 2028. Ministry increased the concurrence limit for hydro generating stations and PSP from ₹1,000 crore to ₹3,000 crore. CEA issued an advisory recommending at least 10% storage capacity of installed solar capacity for minimum two hours duration. Electricity Rules were amended in September 2025 to permit energy storage system development by consumers.
Distribution Sector Reforms and Performance
The Revamped Distribution Sector Scheme launched in July 2021 has 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. To date, 5.73 crore smart meters have been installed under RDSS, with overall 7.24 crore smart meters installed across various schemes. Additional initiatives include 0.5% of GSDP borrowing space for States conditional on power sector reforms, additional Prudential Norms for loans to State-owned power utilities based on distribution performance, rules for Fuel and Power Purchase Costs Adjustment and cost-reflective tariff implementation, and rules for proper subsidy accounting and timely payment.
These efforts have 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 Electricity Act, 2003. Power supply availability increased to 22.6 hours in rural areas (from 12.5 hours in FY2015) and 23.6 hours in urban areas in FY2025.