India’s Energy Storage Awards Drop 65% Despite Deployment

India’s energy storage project pipeline saw a significant contraction in the first four months of fiscal year 2027, spanning April to July. New project awards plummeted by 65% year-on-year, while tendering activity also declined, indicating a slowdown in new commitments despite an acceleration in system deployment.

This period recorded a substantial decrease in awarded capacity, falling to 2.4 GW from 6.9 GW in the previous year. Tendering for new projects simultaneously decreased by 26%, dropping from 11.4 GW to 8.4 GW, according to a report by JMK Research & Analytics and IEEFA.

Deployment Continues Amid Reduced Awards

Despite the sharp decline in new awards, India successfully commissioned a considerable amount of energy storage capacity during the same four-month window. Approximately 8,236 MWh of battery energy storage system (BESS) capacity became operational.

Alongside BESS, an additional 250 MW of pumped hydro storage was also commissioned. July alone contributed around 710 MWh to the total commissioned ESS capacity, illustrating ongoing deployment efforts.

Evolving Procurement Preferences

Standalone BESS projects continue to dominate the procurement landscape, representing 4.3 GW, or approximately 51%, of the total tendered capacity. Firm and dispatchable renewable energy projects accounted for an additional 1.9 GW of demand.

The market is observing a shift in demand away from two-hour storage systems, which previously constituted around 4,448 MW of tenders. Distribution companies are increasingly seeking four-hour systems to manage longer non-solar peak periods, driving this change in preference.

July Tendering Highlights

July demonstrated notable tendering activity, with authorities issuing tenders for 1,707 MW/3,933 MWh of project-development storage. This included six BESS, two renewable-plus-storage, and one Firm and Dispatchable Renewable Energy (FDRE) tender.

Standalone BESS comprised about 65% of this project-development capacity. Furthermore, 1,025 MW of EPC (Engineering, Procurement, and Construction) storage capacity was tendered in July, with PowerGrid’s 750 MW/2,000 MWh standalone BESS procurement forming a significant 73% of this total. GAIL also tendered a 600-MW solar project integrated with a 275 MW/550 MWh BESS.

Addressing Domestic Manufacturing Gaps

In manufacturing, July saw approximately 6.35 GWh of downstream capacity become operational. This surge was primarily driven by Waaree ESS’s 5.15-GWh container facility and Midwest Energy’s 1.2-GWh integration plant.

However, a critical challenge persists: commercial cell manufacturing within India remains limited, making the domestic BESS industry heavily reliant on imported cells. This dependency is expected to intensify as deployment scales up across the nation.

To mitigate this, the Ministry of Heavy Industries has tendered the remaining 10 GWh under the 50-GWh ACC (Advanced Chemistry Cell) battery Production Linked Incentive (PLI) scheme. This initiative specifically targets grid-scale storage, mandating a domestic value addition of at least 25% within two years and 40% within five years, aiming to bolster local manufacturing capabilities and reduce import reliance.