India may require more than Rs. 4 tn in investment related to energy storage by FY32 as renewable power capacity expands, according to a report by CareEdge Ratings. The agency said the power sector was moving beyond the challenge of adding generation capacity towards integrating a rising share of variable renewable electricity into the grid. Non-fossil sources account for about 50 per cent of India’s installed power generation capacity but contribute roughly 29 per cent of actual electricity generation. The gap is increasing the importance of energy storage, transmission infrastructure and flexible generation as renewable power becomes a larger part of the electricity mix. India’s energy storage requirement is estimated to reach about 411 GWh by FY32, compared with operational storage capacity of approximately 54 GWh as of June 2026. CareEdge Ratings estimated that storage-related capital expenditure would exceed Rs. 4 tn to meet the projected requirement, reflecting the need to manage electricity generated from variable renewable sources. Standalone storage-based tenders increased to about 21 GW in FY26 from 7 GW in FY25, indicating stronger activity in the segment. Battery Energy Storage Systems (BESS) and Pumped Storage Plants (PSPs) are expected to perform complementary roles in supporting the power transition and balancing the grid as additional renewable capacity comes online. The agency also said coal-based thermal power was entering a multi-year period of improved credit stability and renewed investment relevance. Well-contracted thermal assets are likely to remain important for meeting rising electricity demand and providing flexibility while renewable capacity expands. Transmission infrastructure is expected to attract about Rs. 519 bn in capital expenditure during FY27-FY31, although right-of-way issues, forest clearances and coordination requirements could delay execution. Stable cash flows and long concession tenures continue to support the credit profile of operational transmission assets.