India’s Growing Battery Energy Storage System (BESS) Market

An article by Mr. Neeraj Kumar Singal – Founder & Director, Semco Infratech Pvt. Ltd. – highlighting the critical role of Battery Energy Storage Systems (BESS) in India’s clean energy transition. With insights on policy, technology, and market trends, the article explores how BESS is set to transform grid reliability and accelerate renewable energy adoption across the country.

India’s energy sector is at the center of one of the most ambitious transformations in the world. As the country accelerates its journey toward renewable energy adoption, Battery Energy Storage Systems (BESS) are emerging as a critical enabler of this clean energy revolution. From stabilizing the grid to enabling 24/7 renewable power supply, BESS is set to play a defining role in India’s energy future.

Why Battery Energy Storage is Crucial for India

India has pledged to achieve 500 GW of non-fossil fuel capacity by 2030 and meet 50% of its total energy needs through renewable sources. Solar and wind are the primary contributors to this target. However, both are intermittent—solar energy is generated during the day, while wind energy varies seasonally. This creates a mismatch between power generation and consumption. This is where BESS steps in. By storing electricity during periods of surplus generation and releasing it during peak demand, storage ensures a smoother and more reliable power supply. It helps:

• Reduce renewable energy curtailment (unused generation).
• Stabilize the grid by providing frequency and voltage support.
• Improve energy access in remote areas.
• Ensure backup power for critical infrastructure and industries.

In short, BESS bridges the gap between renewable energy potential and real-time demand, making it indispensable for India’s energy security.

Key Drivers of India’s BESS Market–

Several factors are accelerating the adoption of BESS across India:

1. Strong Policy Push

The Government of India has introduced multiple initiatives to boost energy storage:

• National Energy Storage Mission (NESM): Focuses on policy, R&D, and deployment
  of storage systems.
• PLI Scheme for Advanced Chemistry Cells (ACC): Incentivizes domestic battery
  manufacturing to reduce import dependence.
• Renewable-plus-storage tenders: SECI and state utilities are increasingly auctioning
  projects where storage is mandatory.

This policy support ensures that storage is not seen as optional but as an integral part of the power sector.

2. Declining Battery Costs

The cost of lithium-ion batteries has fallen by nearly 80% in the last decade. While costs remain a challenge for large-scale projects, further reductions are expected as global manufacturing expands and India ramps up local production.

3. Rising Renewable Energy Deployment

India is already the world’s third-largest solar market and among the top in wind energy installations. The higher the share of renewables, the greater the need for storage to balance variability.

4. Grid Modernization Needs

DISCOMs and state utilities face challenges like peak load management, grid congestion, and frequency fluctuations. BESS offers solutions for load shifting, peak shaving, and ancillary services that modernize and strengthen India’s power infrastructure.

Market Size and Growth Potential–

Industry estimates suggest that India will need 50–60 GW of energy storage capacity by 2030 to integrate its renewable targets effectively. According to NITI Aayog and other agencies, the cumulative market for energy storage could cross $50 billion by 2030. Currently, India has only a few pilot projects and utility-scale installations in operation, but the momentum is picking up:

• SECI has floated large renewable-plus-storage tenders with storage capacity ranging from hundreds of megawatt-hours to gigawatt-hours.
• Private players like Reliance, Adani, and Tata Power are investing heavily in battery manufacturing and storage projects.
• Global players are entering the Indian market, eyeing partnerships and joint ventures.

This signals that the coming decade will witness a surge in both domestic manufacturing and deployment.

Opportunities Across the Value Chain– The BESS market in India is not limited to one segment—it opens opportunities across the entire ecosystem.

Utility-Scale Storage– Large-scale storage projects will play a key role in integrating renewables into the national grid. These projects can provide load shifting, capacity firming, and grid services.

Commercial & Industrial (C&I) Applications- Many businesses face high demand charges and power reliability issues. BESS helps them:

• Reduce electricity bills through peak load management
• Ensure uninterrupted operations with backup storage.
• Integrate rooftop solar more effectively.

Rural Electrification & Microgrids

In remote and off-grid areas, solar-plus-storage microgrids are emerging as sustainable solutions to provide reliable electricity where extending the grid is expensive.

Electric Vehicle (EV) Charging Infrastructure

With India’s EV market expanding, charging stations will increasingly rely on BESS to balance demand spikes and reduce stress on the grid. Second-life EV batteries can also find applications here, creating a circular economy.

Manufacturing and Supply Chain

India is positioning itself as a hub for battery manufacturing under the PLI scheme. This opens opportunities for:

• Cell and pack manufacturing.
• Battery testing and validation solutions.
• Recycling and raw material recovery.

Challenges Hindering Rapid Adoption

While the future looks bright, the BESS sector faces some hurdles:

• High Initial Costs – Despite falling prices, upfront investment remains a barrier for utilities and businesses.
• Limited Domestic Manufacturing – India still depends on imports for lithium cells, although local gigafactories are being planned.
• Policy Uncertainty – While progress is visible, clearer guidelines on storage tariffs, grid integration, and revenue mechanisms are needed.
• Technology Dependence – Currently, lithium-ion dominates, but reliance on imported lithium and cobalt raises supply chain concerns.

Emerging Technology Trends

Beyond lithium-ion, India is exploring alternative technologies to meet diverse storage needs:

• Sodium-ion batteries – Safer and cheaper, with potential for domestic production.
• Flow batteries – Suitable for long-duration storage.
• Green hydrogen with fuel cells – Seen as complementary for large-scale storage.

This technological diversity will ensure India is not locked into one solution but adopts a multi- technology approach based on use cases.

The Road Ahead

The next five to ten years will be transformative for India’s BESS market. With falling costs, robust policies, and strong industry interest, India is set to become one of the largest markets for energy storage globally. Key developments to watch include:

• Scaling up of domestic battery gigafactories.
• Growth of renewable-plus-storage hybrid projects.
• Deployment of grid-scale projects in states with high renewable penetration.
• Expansion of EV charging infrastructure supported by storage.

As India strives to achieve its net-zero emissions target by 2070, BESS will remain at the heart of its energy transition—driving sustainability, energy security, and economic growth.

Conclusion

India’s BESS market is not just about storing electricity; it’s about unlocking the full potential of renewable energy. By ensuring round-the-clock availability, stabilizing the grid, and empowering industries and communities, energy storage is shaping the future of India’s power sector. With the right mix of supportive policies, domestic manufacturing, and innovation, India has the opportunity to emerge as a global leader in the energy storage space. For investors, businesses, and innovators, the time to act is now—the energy storage revolution in India has only just begun.

Also Read: Carbon Capture, Utilisation and Storage: A crucial bridge to net-zero for India and the world