As India pursues its goal of installing 500 gigawatts of renewable energy capacity by 2030, a new analysis from JMK Research and Analytics and the Institute for Energy Economics and Financial Analysis highlights a critical reality: achieving the country’s clean-energy ambitions will depend heavily on how quickly and at what scale energy storage systems are deployed in the coming years.According to the report, India’s cumulative tendered energy storage capacity has grown dramatically—from 6.8 GW in 2018 to 90.7 GW in 2025.
Within this expansion, standalone energy storage system (ESS) tenders—procurements that contract storage capacity independent of a specific renewable project—have become the leading segment. In 2025, ESS accounted for more than 71 percent of total tendered capacity, with standalone battery energy storage system (BESS) tenders alone making up 60 percent of all ESS allocations.This shift, the authors note, is closely linked to falling battery prices and strong policy support.
As Vasu Mor, co-author of the report Viability of standalone battery energy storage tariffs discovered in 2025, explains, the surge in standalone tenders aligns with the introduction and expansion of viability gap funding for standalone BESS projects—an incentive that has helped developers bid more competitively while scaling deployment. The report closely evaluates tariff trends in India’s standalone BESS tenders, analyzing how tariffs are being discovered, what factors influence pricing and whether current bidding patterns are economically sustainable.
Among the 10.4 GW of standalone BESS capacity allocated in 2025, the two-hour, two-cycle tender configuration emerged as the most dominant. This format allows offtakers to address both morning and evening peaks within a single day, providing operational flexibility. However, since mid-2025, four-hour configurations have begun gaining traction due to their ability to more effectively meet evening peak demand.
Co-author Mouli Srivastava notes that the higher single-cycle throughput of longer-duration systems is increasingly appealing to buyers. Despite the growth, tariff viability remains a major challenge. Tariffs dropped significantly in 2025, with the lowest bid for two-hour systems hitting ₹1.48 lakh per MW per month—well below the indicative benchmark tariff of ₹2.3 lakh per MW per month. Nearly three-quarters of the allocated two-hour capacity now falls into a high-risk category, revealing a substantial gap between discovered tariffs and real project costs.
The few cases where tariffs have remained viable are largely confined to early-stage, smaller tenders conducted by states such as Karnataka, Tamil Nadu, Telangana and Gujarat.To address these concerns, the report suggests revisiting procurement frameworks—potentially through cost-reflective tariff floors, tighter developer eligibility rules and improved alignment of auction structures with on-ground execution realities.
The authors also analyze execution-related factors influencing allocated BESS projects, including battery price dynamics, developer capability, financing conditions and supply-chain constraints. Execution risks remain high: delays of up to 18 months may occur due to challenges in financial closure, procurement and commissioning. Lower tariffs could increase pressure on developers, raising the possibility of compromised asset quality over time.Still, the medium-term outlook remains positive. Prabhakar Sharma, another co-author, notes that despite current pressures, India is already witnessing rapid growth in operational BESS capacity.
As of March 2026, a majority of the roughly 1.8 GWh of installed grid-scale BESS capacity was commissioned within the previous six months. He adds that the aggressive bidding patterns seen in 2025 are likely to stabilise as market participants adjust to execution challenges and recalibrate project assumptions.The report also highlights India’s heavy reliance on lithium-ion technology—a dependence that exposes developers to global supply-chain volatility.
Given rising concerns around technology risk and lifecycle economics, tendering agencies are expected to increasingly evaluate alternative chemistries such as flow batteries and sodium-ion systems. These technologies offer advantages in terms of longer operational life, better salvage value and reduced exposure to international supply-chain disruptions.
Looking ahead, Charith Konda observes that India’s BESS technology landscape is likely to evolve into a diversified mix. Future tenders will draw on multiple storage technologies, each suited to different applications, durations and cost structures. Their coexistence will support India’s broader energy-transition needs—balancing renewable variability, enhancing grid stability and enabling a more resilient, flexible power system.
