Storage projects in green energy sector to be focus area in 2025

New Delhi: Energy storage projects are expected to gain centre stage in the renewable energy sector in the coming year as more green capacity gets integrated along with supportive policies, financial incentives, lower battery prices and rising demand.

Increasing the share of variable renewable energy capacity requires storage for integration and grid stability, either as an element in a renewable energy project or even on a standalone basis, which has gained traction in the last one year.

On the other hand, India's power demand is rising and planned thermal capacities are likely to be installed gradually by 2032. In between, storage will play an important role in meeting rising peak demand.


Experts believe the government and the industry will encourage storage capacity addition in 2025 as power distribution companies gear up to meet adequate resources for peak electricity demand. "We foresee an acceleration phase for the deployment of battery storage systems for renewables in India by 2025," said Debi Prasad Dash, president, India Energy Storage Alliance (IESA). "Many Indian companies have evolved, and numerous global companies have entered the Indian market this year."

The government has implemented a viability gap funding scheme for battery energy storage systems and is working on a pumped hydro storage policy as announced in the FY25 budget.

India's energy storage market grew 1.7 times in 2024, reaching a total pipeline capacity of 114 GWh of storage-linked projects, according to Debmalya Sen, India Lead -Energy, World Economic Forum (WEF). Sen said 20 GWh of the pipeline is battery energy storage system (BESS), and 91 GWh is pumped storage projects (PSP)."While PSP currently dominates the small capacity, this will soon change, with BESS constituting a lion's share by FY30," SBI Capital Markets said in a report. The major reason is battery prices have been falling and the impact is likely to be seen in the coming years, industry experts said. This, along with policy and the government's financial support, has led to a steady decline in India's standalone battery tender prices.

The quote for a standalone battery energy storage system tender was ₹2.19 lakhs/MW/month, with a 30% VGF support, sharply lower from 10.83 lakhs/MW/month in March 2022.

A total of 178 MWh of battery energy storage projects were commissioned in 2024, while 29 GWh worth of such capacity moved to the execution phase, said Sen from WEF. The year also recorded the lowest tariff discovery across 'solar plus storage' and firm and dispatchable renewable energy (FDRE) tenders, which have an element of storage, ranging from ₹3.41 per unit to ₹4.73 a unit.

IESA expects a cumulative market potential of around 250 GWh of battery energy storage requirements by 2032.

"We believe that over the next seven years, India will become a market leader in this sector, alongside the US, Australia, Europe, and China," IESA's Dash said.