India’s power demand is seeing a massive surge, driven by extreme weather, industrial expansion, and rapid electrification. As part of its energy transition story, India has set a target of achieving 500 GW of installed electricity generation capacity from non-fossil fuel-based sources by 2030.

A major share for renewable energy (RE) is expected from solar and wind energy, which are inherently intermittent and variable in nature. To ease the integration of these sources, deployment of Energy Storage Systems (ESSs) is essential for storing surplus energy during periods of high RE generation to ensure 24x7 electricity supply.

According to the National Electricity Plan (2023) published by the Central Electricity Authority (CEA), a requirement of 208 GWh of Battery Energy Storage Systems (BESSs) has been projected by 2030 to enable seamless integration of the increasing share of RE in the grid. The government has undertaken a series of coordinated policy, regulatory, demand-supply side measures to promote and deploy energy storage technologies, including the BESS.

Where is the problem?

Problems arise when in the zeal to achieve the target, ground realities are ignored. According to information available, India’s power grid in 2025-26 has adequate generation capacity, with over 500 GW installed and more than half sourced from non-fossil fuels. However, it is increasingly constrained by transmission and operational limitations.

It is a fact that structural power shortages have largely been eliminated, but the concern is that RE capacity is being added faster than the grid can absorb it — particularly in renewable-rich States such as Rajasthan and Gujarat — leading to congestion, curtailment, and inefficient ramping of thermal plants. In this backdrop BESS has become essential rather than optional.

BESS enables surplus solar and wind generation to be stored during low-demand periods and dispatched during evening peaks, thereby reducing curtailment, easing congestion, and stabilising grid frequency. By limiting excessive thermal cycling, reducing reliance on volatile short-term markets, and providing localised flexibility near load centres, storage allows far better utilisation of existing grid infrastructure.

This requires large-scale BESSs and renewable-storage hybrids, additional renewable capacity risks translating into inefficiency. With storage, the same grid can reliably integrate significantly higher levels of clean energy at a lower overall system cost. This has been formally recognised by the CEA, which now classifies BESS as a critical grid asset and permits its use for functions such as frequency regulation, peak shaving, ramp-rate control, and ancillary services, all key to maintaining grid security and reliability.

The challenges

Despite a strong policy push, domestic BESSs face significant on-the-ground execution and structural challenges. While tenders are at record highs, only about 0.8 GWh is currently operational. There is a massive gap between planning and implementation.

If one takes a look back, the projects saw aggressive underbidding creating viability risks as input prices (copper, aluminium, and cells) fluctuate, making it difficult for first-time developers to deliver at promised price points. Another challenge comes from distribution companies, that often delay signing Power Purchase Agreements (PPAs) or Power Sale Agreements (PSAs), waiting for battery prices to drop even further. This, according to information, has led to the cancellation of over 6.4 GW of awarded capacity. Then there is grid inter-connection bottlenecks — RE growth is outpacing transmission build-up.

At present, imported BESSs enjoy higher operational credibility than most Indian-assembled solutions. Observers say that even if it is made in India, there are more than 20 components required for the product, and not all are available here.

The domestic BESS ecosystem is transitioning from simple assembly to full-stack manufacturing, driven by the ₹18,100 crore Production Linked Incentive Scheme for Advanced Chemistry Cells (ACCs). Several Indian conglomerates and start-ups have jumped into the BESS components or systems business, locally. But it will take a while before they can meet the requirement.

India’s General Network Access and Temporary General Network Access connectivity is seeing rising instances of curtailment in several renewable-rich regions. The grid is struggling to keep pace with rapid renewable additions, largely due to lagging transmission build-out and system flexibility. Given this, BESS emerged as a critical near-term solution. However, India’s BESS ecosystem is still at an early stage compared to its PV industry.

BESS, in India, is at a stage where solar was in 2010. Besides, there are issues of customisation — each plant will be using the product for different purpose. There is also a need for skilled personnel for specialised BESS operations and maintenance (O&M) — which is significantly more complex than solar O&M.

A right approach is to create a conducive environment while moving towards Make In India, BESS. The capacity building in the near-term can leverage on established global players with proven technology, long operating track records, and robust safety standards across markets.

Such an approach would help mitigate near-term risks, uphold stringent safety standards, and preserve grid security, while domestic manufacturing and integration capabilities continue to mature — ultimately ensuring that storage strengthens, rather than constrains, India’s energy transition.

Published on April 29, 2026