Battery Energy Storage System is Crucial for India’s Energy Transition
The emergence of Battery Energy Storage Systems highlights the need for adaptability and long-term thinking in infrastructure development. Storage projects require the same focus on execution quality, safety, and regulatory compliance as traditional power projects.
February 06, 2026. By News Bureau
While energy storage systems are not a new concept, with reduction in prices of Lithium Iron Phosphate (LFP), LFP based battery energy storage systems (BESS) have taken a centre stage, enabling renewable energy to be integrated more effectively into the power system.
Battery energy storage systems allow electricity to be stored during periods of surplus generation and supplied during periods of higher demand, unstable supply and outages. This is particularly relevant in India, the third largest producer of solar and wind energy, where solar generation is highest during the day and wind is entirely variable and unpredictable while electricity demand peaks in the evening. The total installed renewable energy capacity of India has crossed 220 GW in 2024-25. To add to this, the growth of solar and wind installations has outpaced the ramping up of transmission infrastructure. A renewed push has been observed from both central and state governments in setting up of transmission lines and substations for evacuation of RE but commissioning of such transmission projects will also take time. In the absence of storage, renewable energy is often curtailed and utilities must rely on conventional sources to meet peak requirements.
Storage helps address this imbalance by improving the availability and reliability of clean power and supporting grid stability. As renewable capacity continues to grow, the role of storage in maintaining reliable power supply is becoming increasingly important.
Across the energy sector, companies involved in generation, transmission, and distribution are gradually building capabilities related to storage integration, project execution, and system operations. Engineering and infrastructure firms are expanding their scope to include storage projects, while utilities are adapting their planning and procurement frameworks to account for flexible resources. Although the storage market is still at a relatively early stage, the direction of travel is clear, with storage leaping from pilot projects to routine inclusion in utility tenders and long-term planning. From a 10-fold increase in installed capacity of 507MWh to 5 GWh in 2025, we have seen energy storage system projects totaling 102GWh tendered in India. Of this 102GWh, the battery energy storage systems tendered comprised of 60GWh.
Over the past two years, policy developments at both central and state levels have provided clearer direction on the role of energy storage. Measures such as viability gap funding for standalone battery projects, extension of inter-state transmission charge waivers, and the gradual introduction of energy storage obligations have improved the economic feasibility of storage projects. The Draft Electricity (Amendment) Act, 2025 proposes for inclusion of energy storage in the definition of ‘power system’, which hints at the vital role energy storage is set to play in energy eco-system. These steps indicate a long-term policy intent to integrate storage into grid planning and utility operations, rather than treating it as a temporary or pilot-driven solution.
Gujarat has been among the states taking early and structured steps in this direction. Gujarat Urja Vikas Nigam Limited (GUVNL) has consistently initiated large-scale battery storage projects over successive phases, reflecting a planned approach to complement the state’s renewable energy growth with firm and flexible power. These projects are aimed at supporting peak demand management, optimising power procurement, and strengthening grid operations. The continuity and scale of these initiatives suggest that storage will remain an important component of Gujarat’s power planning in the years ahead.
The growing adoption of battery storage is closely linked to revamping of the transmission infrastructure of India. Transmission utilities are exploring battery energy storage solutions to manage peak demand, improve supply reliability, _reduce exposure to high-cost power procurement during peak hours and providing ancillary services. These use cases reflect a broader shift in how utilities are planning their networks, with storage increasingly viewed as a grid asset rather than a standalone technology.
The emergence of Battery Energy Storage Systems highlights the need for adaptability and long-term thinking in infrastructure development. Storage projects require the same focus on execution quality, safety, and regulatory compliance as traditional power projects. As storage capacity scales up, consistent implementation and operational discipline will be essential to ensure that these assets deliver the intended benefits to the grid.
India’s energy transition is now entering a phase where attention is shifting from capacity addition alone to overall system performance and reliability. Battery Energy Storage Systems are increasingly supporting this shift by enabling better use of renewable energy and strengthening grid operations. With continued policy support and growing participation from utilities and infrastructure companies, storage is expected to play a steady and integral role in shaping the next phase of India’s power sector, supporting a cleaner and more reliable energy future.
- Utsav Panchal, Director and CEO, Rajesh Power Services Ltd.
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