India races to fix battery storage gaps as renewables face gridlock
The Indian government has launched a series of initiatives to tackle the country's battery energy storage system (BESS) shortfall. This comes as the power grid heavily relies on fossil fuels and struggles to accommodate solar and wind energy variability. Experts warn that without significant upgrades, much of India's renewable energy potential may go to waste.
Rystad Energy predicts India will have just 2.56 GW of installed battery capacity by the end of 2025, far less than required to meet clean energy targets. The government has allocated 2.8 GW of standalone BESS capacity and 9 GW of solar-plus-BESS projects in the first half of 2025. However, states like Rajasthan, Gujarat, and Tamil Nadu are nearing grid saturation due to high renewable energy influx, leading to clean energy curtailment.
To address these challenges, the Indian government has begun offering production-linked incentives and viability gap funding. Strategic placement of BESS near demand centers can ease transmission congestion and handle peak demand. The National Energy Storage Mission and related policies, along with investments from pension and growth capital funds, are driving market growth. By the end of 2025, prominent Indian companies like solar-plus-storage project developers are expected to establish significant battery energy storage systems, particularly in states like Karnataka, Chhattisgarh, and Gujarat. Hybrid systems with photovoltaic dominate the 490 MWh installed storage capacity, with major involvement from firms such as AlphaESS.
With fossil fuels still supplying 75% to 80% of India's power, the urgency to scale up battery energy storage systems is clear. The Indian government's initiatives, combined with private sector investments, aim to harness the estimated $487 billion investment opportunity in energy storage between 2025 and 2050, driven by declining battery prices. Successful implementation of these plans is crucial to fully realize India's renewable energy potential.
