The Indian energy storage market is experiencing a significant surge, with Standalone Energy Storage Systems (Standalone ESS) tenders reaching 6.1 gigawatts (GW) in the first quarter of 2025, accounting for 64% of all utility-scale energy storage tenders. This capacity has already surpassed the total issuance in 2024, driven by the Viability Gap Funding (VGF) scheme, which offers up to 30% support for capital expenditure of standalone Battery ESS (BESS) projects. The VGF scheme has enhanced project viability, addressed declining battery costs, and made projects more economically viable.
Recent auctions have seen tariffs as low as Rs219,001-221,100/MW, representing a 40% reduction compared to non-VGF projects. Central and state agencies, such as NTPC, Gujarat Urja Vikas Nigam Limited (GUVNL), and Maharashtra State Electricity Distribution Company Limited (MSEDCL), are playing a crucial role in scaling deployment. Established power sector giants, including JSW Energy, Greenko, and Torrent Power, are leading deployments, while new entrants like Pace Digitek, Oriana Power, and Kintech Synergy are gaining ground in BESS-based tenders.
Standalone ESS offers a dispatchable solution to address the intermittency of renewables, support grid stability, and optimize energy usage. Unlike VRE-paired ESS, Standalone ESS functions as an independent asset, allowing utilities, grid operators, or third-party entities to own and deploy it flexibly. Emerging business models like Energy Storage as a Service (ESaaS) offer storage as a service, lowering the entry barrier for users through subscription-based or pay-per-use arrangements.
As India rapidly scales up variable renewable energy (VRE), Standalone ESS is expected to play a critical role in addressing grid stability and optimizing energy usage. With the VGF scheme and declining battery costs, the market is poised for further growth. The diversification of players, including established giants and new entrants, is expected to drive innovation and competition, leading to more efficient and cost-effective energy storage solutions. Overall, the Indian energy storage market is on a growth trajectory, driven by supportive policies, declining costs, and increasing demand for dispatchable energy solutions.