India needs a long-duration energy storage (LDES) trajectory similar to a renewable purchase obligation to increase LDES integration into the country’s power mix, according to a white paper published by the LDES Council.

Setting LDES-specific targets for state transmission and utility planning would create long-term revenue certainty for developers, it said.

The LDES Council proposed including LDES in the National Framework for Energy Storage Systems to accelerate its deployment.

Based on the International Energy Agency’s Net Zero Scenario 2050, the LDES Council has estimated that India will require 170-260 GW of LDES capacity.

It also suggested that the country needs to conduct a needs assessment of LDES to ensure a cost-optimal mix of generation and LDES deployment.

According to the 2H & Annual 2025 India’s Energy Storage Landscape Report by Mercom India Research, India added nearly 547 MWh of battery energy storage capacity in 2025, a 26% year-over-year increase from over 433 MWh.

Incentives for LDES

Under the policy, the LDES Council proposed government-backed financial incentives for LDES development in India, as well as dedicated innovation grants or pilot funding for LDES-based startups. Such incentives would accelerate the commercialization of LDES technologies.

The Council also proposed announcing targeted financial support, such as for LDES solutions, for a stipulated period.

Policymakers must ensure that markets fairly reward low-carbon flexibility solutions, such as LDES, that provide the grid with balancing, congestion management, grid deferral, resource adequacy, and ancillary services.

The Council said that mechanisms that provide long-term revenue visibility and stability for LDES projects can raise investor confidence. These mechanisms may include cap-and-floor mechanisms, firm, dispatchable renewable energy/round-the-clock contracts with LDES, long-term energy service agreements, capacity payments, and government-backed financial guarantees.

The white paper suggested increasing hourly or block-wise availability requirements in round-the-clock/firm and dispatchable renewable energy power purchase agreements (PPAs) to at least 90% to strengthen incentives for firm, reliable power.

To ensure the growth of green hydrogen opportunities, it proposed incentivizing co-located LDES-with-electrolyzer projects under industrial and green hydrogen missions.

The white paper highlighted that public-private partnerships supported by sovereign-backed instruments such as green bonds and concessional financing can reduce capital costs and share early-stage risks.

To further incentivize LDES projects, the paper suggested removing double grid fees to reduce project costs and adopting time-based and performance-linked pricing structures for grid power procurement.

Noting that India has witnessed delays in planning, permitting, and granting grid connections for projects, the LDES Council said that the government could design a single-window clearance system for LDES projects.

Phased Implementation

The white paper suggested a phased implementation plan for LDES growth, from issuing the required policy framework and setting national targets to launching 50-100 MW pilot projects with viability gap funding. It also called for including LDES in national/state modeling and promoting its research and development.

Further, the report suggested introducing long-term PPAs, enabling non-firm grid connections, and incentivizing LDES co-location with data centers and green hydrogen projects.

Once the market matures, the country can implement efficient grid pricing and dynamic tariffs and scale up domestic manufacturing through production-linked incentive support.

LDES technologies are expected to see meaningful cost reductions by 2030, driven by technological improvements, increased manufacturing scale, and supply chain maturation, according to a study by the LDES Council in collaboration with the Electric Power Research Institute.