India’s Battery Storage Gap: 8.5 GWh Operational vs 98 GWh Auctioned

India is grappling with a substantial disparity in its Battery Energy Storage Systems (BESS) deployment, a critical component for grid stability and renewable energy integration. While nearly 98 GWh of BESS capacity has been auctioned since 2018, only 8.5 GWh is currently operational.

Understanding India’s BESS Ambition

The nation aims to significantly expand its BESS infrastructure to support a projected 500 GW renewable grid by FY 2031-32. This strategic integration is vital for managing the intermittent nature of renewable energy sources.

• National Electricity Plan 2023 target: 47.24 GW/236.22 GWh by FY 2031-32.
• Capacity auctioned since 2018: approximately 97.8 GWh across 191 tenders.
• Operational capacity as of June 2026: only 8.5 GWh, with 6.9 GWh in merchant mode.

Policy Frameworks in Place

India has established several policy measures to accelerate BESS deployment and integrate it into the national energy landscape. These frameworks aim to provide the necessary regulatory and financial incentives.

• BESS recognized as an independent asset class in 2022.
• ‘National Framework for Promoting Energy Storage Systems’ introduced in August 2023.
• Energy Storage Systems included in the Harmonised Master List of Infrastructure in 2022, easing credit access.
• Projects commissioned by June 30, 2028, receive a 100% waiver of inter-state transmission charges for 12 years.

Current Manufacturing and Deployment Models

Despite policy support, India’s domestic battery manufacturing capacity remains a challenge, contributing to the slow operationalization of BESS projects. The country largely depends on imports for key components.

• Battery cell manufacturing capacity: approximately 4 GWh.
• Battery pack manufacturing capacity: between 32-37 GWh.
• Estimated installed BESS capacity to exceed 10 GWh by December 2026.

Various deployment models are being explored to integrate BESS into the energy ecosystem effectively. These models cater to different grid needs and revenue generation strategies.

• BESS as charging infrastructure.
• BESS for distribution purposes, operating via a tolling mechanism.
• Merchant BESS model, generating revenue through power exchange participation and ancillary services.

Persistent Hurdles and Future Outlook

The primary obstacles hindering widespread BESS adoption include limited domestic manufacturing capabilities, a reliance on international imports, and inherent grid instability issues. Addressing these will be crucial for scaling up.

Looking ahead, an ALMM-like framework for BESS could be implemented to bolster local production once the industry achieves sufficient scale. This would further reduce import dependence and strengthen the supply chain.

The strategic utility of BESS extends beyond grid stabilization, offering significant value when combined with other technologies. This includes replacing diesel generation, supporting EV charging infrastructure with vehicle-to-grid integration, and providing stable electricity for green hydrogen production.