Battery Energy Storage Systems: The Hidden Backbone of India’s Energy Future

The clean energy transition is often defined by solar panels and wind turbines. Yet, the true enabler of this shift lies in something less visible but far more powerful: battery energy storage systems (BESS). Without them, renewable energy remains intermittent. With them, it becomes reliable, scalable, and a genuine alternative to fossil fuels.

By FY32, India’s storage capacity is projected to grow twelvefold, positioning BESS as not just a complementary technology but the backbone of the nation’s energy independence.

Sector Insight: Why BESS Matters

India has set a target of 500 GW renewable energy capacity by 2030. The challenge is no longer generation, but storage. How do we ensure that solar energy generated in the afternoon can be used at night? How do we stabilize grids when wind patterns fluctuate?

The answer is BESS. From electric vehicles to utility-scale projects, storage solutions are mission-critical for ensuring that renewable energy integrates seamlessly into India’s economy and society.

Domestic Manufacturing: Gigafactories on the Horizon

The next five years will define India’s leadership in energy storage. Domestic manufacturing demand is expected to reach 110–120 GWh by FY27/28. Meeting this demand will require investments of approximately ₹800 billion in gigafactories, supply chains, and related infrastructure.

Electric vehicles may have sparked the demand surge, but by 2030, BESS will be a mainstream growth driver across the economy.

Company Spotlight: Prostarm Info Systems Ltd

Prostarm Info Systems Ltd has secured a Letter of Award from KPTCL to set up a 150 MW/300 MWh BESS at the Doni Substation in Gadag. The project will operate under a 12-year Build–Own–Operate framework, backed by tariff-based competitive bidding and viability gap funding support.

The project ensures ₹45.7 crore in annual rental revenue, establishing Prostarm as one of the early leaders in India’s large-scale battery storage landscape. More importantly, it demonstrates how policy, capital, and corporate execution are converging to make grid-scale storage a reality

Behind-the-Meter (BTM) Systems: Consumer-Centric Storage

BTM systems, also known as small-scale storage, are located at consumer premises, often paired with rooftop solar units. They store excess energy generated during the day and supply it during the night or cloudy periods.

By reducing stress on public grids, BTM systems allow homes, businesses, and industries to secure cost-efficient, reliable energy while accelerating the shift toward energy self-reliance.

Front-of-the-Meter (FTM) Systems: Grid-Centric Storage

FTM systems are large-scale, utility-side projects designed to support the grid. These include utility-scale battery installations and hybrid renewable energy plants. Their primary role is to stabilize grids during peak demand, reduce blackout risks, and ensure large-scale integration of renewables.

Globally, FTM systems account for the majority of battery deployments. In India, with government-backed tenders on the rise, they are set to become the cornerstone of grid stability and resilience.

Growth Drivers and Market Trends

• Storage capacity projected to grow twelvefold by FY32.

• Electric vehicle adoption compounding demand for advanced batteries.

• Policy support through tenders, incentives, and viability gap funding.

• Declining battery costs due to scale, innovation, and technological advances.

Companies Positioned to Benefit

Several listed companies are already building capabilities across the BESS value chain — from cell manufacturing to grid-scale storage solutions:

• Exide Industries Ltd – Scaling lithium-ion cell manufacturing through partnerships, expanding beyond lead-acid dominance.

• Amara Raja Energy & Mobility Ltd – Investing in gigafactory capacity for lithium-ion batteries with an emphasis on EV and stationary storage markets.

• Reliance New Energy Ltd – Committed to multi-GWh battery storage projects as part of its clean energy roadmap.

• Tata Power Ltd – Actively developing large-scale storage projects, both behind-the-meter and front-of-the-meter.

• Adani Energy Solutions Ltd – Exploring BESS deployment to complement renewable power generation.

• Prostarm Info Systems Ltd – Early mover in utility-scale battery storage projects.

These players are expected to benefit from policy tailwinds, rising domestic demand, and the structural necessity of integrating storage with renewable energy.

Technology Diversification: Beyond Lithium-Ion

While lithium-ion batteries dominate today, India’s long-term storage roadmap is expected to diversify. Emerging technologies such as sodium-ion, solid-state, and vanadium redox flow batteries are gaining attention for their cost efficiency, safety, and suitability for large-scale, long-duration storage.

Several Indian public and private institutions are already investing in R&D and exploring partnerships with global innovators. These efforts could help India leapfrog in specific niches, reducing raw material dependence and building a more resilient domestic supply chain.

Global Momentum: Lessons for India’s Energy Ambitions

Around the world, energy storage has moved from niche pilot projects to mainstream infrastructure. The US is projected to install over 120 GWh of battery storage by 2030, while China already accounts for nearly half of all new global capacity additions. These large markets are demonstrating how storage not only balances renewable energy but also underpins grid stability during peak demand.

For India, this global momentum is a signal that battery energy storage is no longer optional - it is foundational. As renewable penetration rises toward the government’s 500 GW target by 2030, replicating the scale and innovation seen internationally will be essential.

Policy and Regulatory Framework: Catalyzing Scale in India

Government policy is emerging as the single biggest enabler of India’s battery energy storage growth. Programs such as Viability Gap Funding (VGF), the National Electricity Plan (NEP), and dedicated tenders by SECI and state utilities are shaping a predictable pipeline of projects. These initiatives not only reduce the upfront capital burden but also provide revenue visibility for developers and manufacturers.

This policy clarity is crucial as India moves from megawatt-scale pilots to gigawatt-scale deployment. By 2030, the country will require over 40 GW/120 GWh of storage to support its renewable energy targets.

Investor Economics: Scale, Cost Curves, and First-Mover Advantage

The economics of energy storage hinge on scale. As gigafactories come online and domestic supply chains strengthen, battery costs are expected to decline by 25–30% over the next five years. This mirrors the cost curve that transformed solar power from uncompetitive to indispensable in less than a decade.

For India, achieving cost parity will determine how quickly storage shifts from pilot projects to grid-wide adoption. First movers who secure market share in manufacturing, project development, or recycling will be best positioned to ride this transition.

Risks to Consider

• Capital intensity: Gigafactory development and storage deployments require high upfront investment.

• Technology risk: Rapid innovation in chemistries (lithium-ion, sodium-ion, solid-state) could shift cost dynamics.

• Policy dependence: Subsidies, tenders, and viability gap funding remain central to early project economics.

• Execution challenges: Timely commissioning, technology transfer, and scaling will determine winners.

Strategic Conclusion

India’s clean energy transformation will not be defined by generation alone—it will be secured by storage. Battery energy storage systems are shifting from the periphery to the core of India’s power and mobility sectors.

For investors, the opportunity is structural. Companies with early positioning in domestic manufacturing, grid-scale projects, and recycling solutions stand to benefit most from this twelvefold growth trajectory. With the right mix of policy support and private execution, BESS is set to become the defining backbone of India’s energy future.

Disclaimer

This article has been prepared for informational purposes only and does not constitute investment advice, a research report, or a recommendation to buy or sell securities. Investors are advised to conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions.

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