India Battery Energy Storage Systems Market By Battery Type (Lithium-ion and Advanced Lead Acid, Flow Batteries, and Others), By Connection Type (On-Grid and Off-grid), By Application (Front of the Meter, Behind the Meter), By End User (Commercial, Industrial, Residential), By Region, Competition Forecast & Opportunities 2029F

The India Battery Energy Storage Systems Market is predicted to grow during the forecast period 2025-2029F, owing to various driving factors, such as rising demand for continuous electricity, increasing investment in renewable energy, and the union government's focus on increasing adoption of EVs compared to petrol and diesel vehicles, among others.

Battery storage, or a battery energy storage system (BESS), is used to store energy from renewables, including solar and wind, and then utilize it when power is required. Additionally, with the help of green energy, battery storage technology plays an important role in providing power in homes and offices. National grid and electricity grid engineers focus on matching the supply of power with demand and managing peaks and troughs, which becomes more challenging when the target is to achieve net carbon emissions by the end of 2040. Furthermore, while fossil fuel-fired plants are used to control peaks and troughs, battery energy storage system can gradually replace a portion of peaking power generators over time.

There is a growing requirement for energy backup due to the rising demand for uninterrupted power supply across the country. In the case of power outages, batteries serve as a backup power source. The rechargeable and scalable features of batteries are the two major advantages. The need for a reliable supply has increased, necessitating a growing need for energy backup across the country. Batteries are provided as backup power sources during power interruptions or periods of heavy demand.

Grid integration of large-scale variable renewables is one of India's biggest challenges as it aspires to decarbonize its power economy through the deployment of 450 gigawatts (GW) of renewable energy (RE) by 2030. Reaching this target from the current installed renewable capacity of 93GW is anticipated to require average annual renewable capacity additions of ~35GW.

According to the 2021 report outlook, the International Energy Agency's (IEA) proposes that India is anticipated to double its renewable capacity to 900 GW by the end of 2040. Additionally, renewables in India are now extremely cost-competitive with coal-fired power and are set to be the dominant source of power supply with record low solar tariffs below USD27/MWh. Currently, renewables account for 10% of India's total power generation, and that share is likely to rise to 31% by the end of 2030 with 450GW coming online.

Rising Demand for Energy Storage in India

India has decided to increase its share of non-fossil fuel-based generation sources to 40% by the end of 2030, which necessitates a rise in the demand for flexibility in power systems in the upcoming years. The joint initiatives between the Government of India and state governments, named 'Power for All,' target 24x7 electricity for all by 2019, creating an increase in power requirements and a need to balance the supply and demand of electricity across the country. Energy storage systems play a vital role in increasing the system's overall flexibility by serving multiple grid applications. Additionally, recent developments and investments in the electric vehicle (EV) sector, along with ambitious targets, only increase the demand for energy storage systems.

In India, the electric vehicle (EV) market is projected to reach around USD7.09 billion by the end of 2025. Recently, research by the Council on Energy, Environment, and Water (CEEW) Centre for Energy Finance recognized an expected USD206 billion investments for the enhancement of electric vehicles in India by 2030. Additionally, around USD180 billion of investment is expected to be required in the upcoming years for vehicle manufacturing and charging infrastructure.

According to NITI Aayog and the Rocky Mountain Institute (RMI), India's EV finance industry is likely to reach USD50 billion by 2030. A report by the "India Energy Storage Alliance" estimated that the electric vehicle market in India is likely to increase at a CAGR of 36% until 2026. In addition, the projection for the EV battery market is expected to expand at a CAGR of 30% during the same period.

The energy storage market in India witnessed a demand of 23 GWh in 2018, with 56% of the battery demand coming from the power backup inverter segment. During 2019-2025, the cumulative potential for energy storage in behind-the-meter and grid-side applications is estimated to be close to 190 GWh by the India Energy Storage Alliance. Therefore, the above-mentioned factors are likely to propel the market for battery energy storage systems in the upcoming years.

National Policy for Lithium-ion Battery in the Country

There are various types of batteries, including lead-acid battery, lithium-ion battery, nickel-metal battery, hydride battery, nickel-cadmium battery, nickel-zinc battery, flow battery, among others, found at in the Indian market. India is taking measures to become a leader in the lithium-ion battery market. That's why the Indian government has proposed to set up a National Mission on Transformative Mobility and Battery Storage to implement the National Policy on Electric Mobility and the National Policy on Battery Storage, as well as to develop a roadmap for the manufacturing of lithium-ion batteries in India.

Additionally, the government has announced the setting up of a National Centre for Advanced Lithium-Ion Battery Storage (NCALB) across the country. This is expected to be a research and development center dedicated to the development and deployment of advanced lithium-ion battery storage solutions.

Furthermore, the union government has also set up the National Programme on Advanced Energy Storage Technologies (NPES). This program involves setting up pilot projects to demonstrate the potential of advanced energy storage technologies and the development of national standards and certification processes for producing and deploying these technologies.

Also, the union government announced the setting up of a National Research Center on Lithium-Ion Batteries and Energy Storage (NRC-LIBEST). This center focuses on research on lithium-ion batteries and energy storage technologies and works towards developing advanced lithium-ion battery and energy storage solutions for India.

ChallengesEnergy Storage Sector Faces Supply Chain Issues

India’s renewable energy growth strategies are tied to energy storage to mitigate the intermittency of renewable sources as the nation struggles to meet the increasing round-the-clock (RTC) clean energy demand. Currently, India has installed a record 10 GW of solar power in the first nine months (January to September) of 2022 alone, bringing the aggregate capacity up to 60 GW. Also, as of September 2022, the country has installed a cumulative wind energy capacity of approximately 42 GW. The energy storage systems serve a dual function, including storing and supplying RTC power, and maintaining grid stability by ensuring controlled power injection into the grid.

Although energy storage in India is still in the initial stages of development, investors in the storage sector are optimistic about the way forward and expect the rapid adoption of storage systems with the support of the government. Therefore, to address the supply chain challenges, a significant investment in upgrading the transmission network is required, as well as expanding the renewable energy portfolio with a large capacity. Additionally, the short gestation period of solar and wind projects and the longer gestation period in transmission development pose another challenge in the battery energy storage systems market. The immediate solution to these challenges is to deploy BESS/storage.

Recent Developments

• In February 2023, data released by the Council on Energy, Environment, and Water (CEEW) stated that the Indian government needs an investment of approximately USD4.5 billion to achieve the government’s PLI target of setting up 50 GWh of lithium-ion battery manufacturing plants across the country. Additionally, according to the economic survey 2022-23, the electric vehicle market in India is expected to reach annual sales of 1 crore units by the end of 2030.
  
  
• In August 2022, Norfund, which manages the Norwegian Climate Investment Fund, and KLP, Norway’s biggest pension company, signed an agreement to buy a 49% share of a 420 MW solar power plant in Rajasthan for USD35.05 million.
  
  
• In September 2022, the Union government of India has recently signed agreements with three companies for incentives under its Production-Linked Incentive (PLI) Scheme for Advanced Chemistry Cell (ACC) Battery Storage to increase the demand for battery cells and packs. These companies are Reliance New Energy Limited, Ola Electric Mobility Private Limited, and Rajesh Exports Limited. These companies are set to receive incentives worth USD2,172 million under the program. Additionally, it is estimated that EV battery demand in India is expected to rise by 15 GWh by the end of 2025 and 60 GWh by the end of 2030.

Market Segmentation

Company Profiles

AES India Engineering Limited, Exide Industries Ltd, Delta Electronics India Private Limited, Toshiba India Private Limited, Amara Raja Batteries Ltd, Panasonic Corporation, HBL Power Systems Ltd, Schneider Electric India Pvt Ltd, Siemens Ltd,