Growing Pipeline: Battery storage market moves towards larger-scale deployment

India’s battery energy storage system (BESS) market is transitioning toward large-scale deployment to support renewable energy integration and grid reliability, with a projected requirement of 80 GW of battery capacity by 2035-36. Recent data from February to May 2026 reveals a robust pipeline featuring over 35,000 MWh of awarded standalone BESS capacity and a significant shift toward firm and despatchable renewable energy (FDRE) projects. This momentum is driven by aggressive tendering activity from state and central agencies, alongside new regulatory frameworks aimed at ensuring safety and operational standards for storage installations.

India’s energy storage landscape is expanding rapidly, with the Central Electricity Authority projecting a total storage requirement of 174 GW by 2035-36. As of May 2026, the standalone BESS segment has reached over 4,700 MWh of operational capacity, with another 35,000 MWh already awarded and 29,000 MWh currently in the bidding phase. Key large-scale projects driving this growth include Adani Green Energy’s 3.37 GWh capacity at Khavda, ACME Solar Holdings’ nearly 1,000 MWh of storage in Rajasthan, and IndiGrid’s 360 MWh project in Gujarat. Geographically, Rajasthan leads the sector with 13 percent of the tracked project pipeline, followed by Gujarat at 9 percent, while states like Andhra Pradesh and Maharashtra also maintain significant shares.

Procurement activity remained high between February and May 2026, with major auctions conducted by agencies such as SECI, NTPC, and various state utilities. In February alone, over 3,070 MWh of standalone BESS capacity was auctioned, alongside SECI’s 4,800 MWh FDRE assured peak power project. Tariff discovery has shown variation based on duration and obligation types; the lowest discovered (L1) tariff for two-hour standalone storage stands at Rs 148,000 per MW per month, while four-hour projects reached Rs 285,000 per MW per month. In the RE+ESS segment, tariffs have ranged between Rs 2.6 per kWh and Rs 3.52 per kWh, reflecting the competitive nature of integrated renewable and storage solutions.

The sector is benefiting from a maturing regulatory environment, including new Bureau of Indian Standards requirements for lithium cell verification and CEA safety regulations for BESS installations. However, the market faces notable challenges, as evidenced by the cancellation of approximately 5,300 MWh of standalone BESS and 2,800 MW of FDRE/RE+ESS capacity due to execution risks. Industry experts have expressed concerns regarding aggressive bidding practices that may threaten project viability, as well as potential upward pressure on costs from global supply chain disruptions and raw material price volatility. Despite these risks, the increasing participation of infrastructure developers like JSW, Hero Future Energies, and HG Infra signals strong long-term confidence in storage as a pillar of India’s energy transition.