Growing Markets for Grid-Connected Battery Storage in India

India's power grid is facing increased strain from record-breaking heatwaves and power demand, as seen in May 2024 when nationwide demand hit 250 GW. While battery energy storage systems (BESS) costs in India have dropped 65 percent over the last two years, investment is hindered by market rules that only recognize 'energy only' dispatch strategies. The document asserts that if regulators recognize a 'full value stack'—including resource adequacy, ancillary services, and transmission and distribution (T+D) deferral—BESS profit margins could range from 24 to 70 percent. To unlock this market, the document recommends that the Forum of Regulators provide valuation guidance, state regulators incorporate BESS into long-term resource adequacy planning, and the Central Electricity Authority (CERC) increase transparency and access to ancillary service markets.

• Extreme weather events are stressing India's electricity infrastructure, evidenced by a record nationwide power demand of 250 GW on May 30, 2024, and the failure of nearly 600 transformers in Kerala during the summer heatwave.
• The cost of BESS in India has decreased significantly, with tariffs falling by 65 percent in the last two years, supported by industry maturation and government initiatives like the Production Linked Incentive Schemes and Viability Gap Funding.
• Current Indian regulations limit BESS to an "energy only" dispatch strategy, focusing solely on shifting net demand. However, optimizing for a full value stack—including resource adequacy, ancillary services, and transmission and distribution deferral—could result in profit margins between 24 and 70 percent.
• The Central Electricity Authority's cost-optimized model for the 2030 grid anticipates the need for more than 40,000 MW (200,000 MWh) of new BESS to maintain grid reliability.

APA

RMI (2024). Growing Markets for Grid-Connected Battery Storage in India. https://rmi.org/resources/growing-markets-for-grid-connected-battery-storage-in-india/

Chicago

RMI. Growing Markets for Grid-Connected Battery Storage in India. 2024. https://rmi.org/resources/growing-markets-for-grid-connected-battery-storage-in-india/.

Wikipedia

{{cite report |author=RMI |title=Growing Markets for Grid-Connected Battery Storage in India |date=1 October 2024 |url=https://rmi.org/resources/growing-markets-for-grid-connected-battery-storage-in-india/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2024growing, author = {{RMI}}, title = {{Growing Markets for Grid-Connected Battery Storage in India}}, institution = {RMI}, year = {2024}, month = oct, url = {https://rmi.org/resources/growing-markets-for-grid-connected-battery-storage-in-india/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }