Global Energy Alliance for People and Planet (GEAPP), an alliance of global stakeholders, is working actively to enable a people-centric, inclusive, and just energy transition across emerging economies. GEAPP initiated India’s first utility-scale battery energy storage system (BESS) project that was recently commissioned. In this backdrop, T&D India caught up with Saurabh Kumar, Vice President – India, GEAPP, to learn more about the evolving role of BESS in India’s energy transition, and how GEAPP intends to support the same. An interaction by Venugopal Pillai.
What is the importance of battery energy storage systems (BESS) in India’s power transmission & distribution value chain?
Battery Energy Storage Systems (BESS) are a cornerstone of India’s energy transition strategy, pivotal to realizing the nation’s ambitious goal of 500 GW of variable renewable energy (VRE) capacity by 2030. As VRE sources currently account for about 12 per cent of the energy mix, with some states like Rajasthan, Gujarat, and Karnataka surpassing 25 per cent, the importance of scalable and efficient energy storage solutions becomes increasingly evident.
The burgeoning market, highlighted by the release of over 31 GWh of standalone BESS tenders in recent years, signals a crucial shift towards integrating storage with renewable energy to ensure a reliable power supply and grid stability. Notable projects like the Delhi pilot, India’s first commercial standalone BESS project and the largest in South Asia, exemplify this innovation.
We understand that GEAPP was instrumental in initiating India’s first utility-scale BESS project in Delhi. Tell us more.
The BESS pilot project in Delhi, a collaboration between BSES Rajdhani Power Ltd (BRPL), IndiGrid, AmpereHour Energy, and GEAPP, is India’s first commercial, utility-scale, standalone BESS project to be commissioned.
This project aims to enhance grid flexibility and increase the share of low-cost VRE in Delhi’s energy mix. Located at BRPL’s 33/11kV Kilokari substation in South Delhi, the system will have a dispatchable output of 20 MW/40 MWh and occupy approximately 2,500 square metres. Designed to operate with a minimum round-trip efficiency of 85 per cent in its first year, decreasing to 82 per cent by the twelfth year, the system guarantees an annual availability of at least 95 per cent.
The implementation timeline is notably fast-paced: spanning a 20-month duration from the release of the tender in October 2023 to the commissioning of the project on April 1, 2025. The BESS is a 2-hour system capable of operating a maximum of two cycles per day, resulting in a total maximum dispatch of 80 MWh per day.
What was GEAPP’s role in this project?
GEAPP played a pivotal role in facilitating this project by offering both technical expertise and financial assistance throughout the project lifecycle – from the pre-feasibility stage and regulatory submissions to project commissioning and post-commissioning support for a period of three years. GEAPP also provided 70% of the project capex as a loan at concessional lending rates, resulting in the discovered levelized annual tariff (or capacity charge) to be at Rs.57.6 lakh (around $69,000) per MW per year, which is almost 55 per cent lower than the previous benchmark in India of Rs.130 lakh per MW per year.
In commitment with the larger national requirement of 47 GW of BESS by 2030, GEAPP is working towards developing a pipeline of 1 GW worth of BESS projects by 2025. GEAPP intends to enable an ecosystem that is conducive to accelerating BESS development and deployment.
“In India, a significant gap exists between the costs of BESS and the value they can generate under current regulatory framework.”
India’s discoms have targeted to attain 1 GW of BESS capacity by 2026. What challenges do you foresee in this pursuit, given that most discoms are still under government control and are hence not in the best of financial health?
In India, a significant gap exists between the costs of BESS and the value they can generate under current regulatory frameworks, limiting the development of market-based solutions for BESS. Although upfront hardware costs for BESS in India are similar to those in international markets, financing costs are much higher, particularly for financially constrained electricity utilities and discoms. Furthermore, several potential revenue streams from BESS cannot be monetized due to outdated regulations and the need for power market design reforms.
As on date, approximately 5.8 GWh of standalone BESS tenders have been cancelled or put on hold for some time, preventing financial closure. The existing regulatory framework needs to be updated to adequately incentivize the development and deployment of BESS projects across the country. The financial risks have to be mitigated, and the significant financial viability gap needs to be addressed. However, with the introduction of concessional financing, these projects could become highly attractive to the private sector, as we have witnessed with the announcement of the VGF scheme by the Government. To further accelerate the deployment of energy storage systems and pave the way for a robust and sustainable BESS market in India, India must embrace forward-thinking financing solutions and enact supportive policy reforms.
“The BESS market is set for rapid expansion, propelled by government initiatives, policy support, and blended financing.”
It is believed that India’s burgeoning renewable energy capacity will be meaningful only if supported by BESS. How do you see the road ahead in attaining the targeted 47 GW of BESS capacity by 2032?
With the Central Electricity Authority projecting a requirement of 47 GW/236 GWh of BESS by 2031-32, the market is set for rapid expansion, propelled by government initiatives, policy support, and blended financing.
Utility-scale storage will be indispensable for integrating renewables, while decentralized solutions will gain traction among commercial, industrial, and residential users seeking energy independence. Additionally, the integration of BESS with electric vehicle charging infrastructure will catalyze urban storage demand, reinforcing India’s clean energy transition. Technological advancements in battery chemistry, coupled with local manufacturing supported by production-linked incentives, will further enhance cost-efficiency and scalability. As BESS becomes pivotal in providing ancillary services and supporting hybrid renewable projects, the next five years will witness a transformative shift in India’s energy landscape, positioning the country as a global leader in energy storage innovation.
As mentioned earlier, GEAPP is working to develop a pipeline of 1 GW worth of projects in 2025 and scale it to 5 GW by 2027 by replicating the technical playbook developed for the Delhi project. The operational learnings from these projects will build a strong evidence base to support new regulations that will unlock new revenue streams and incentivize further BESS projects.
“Several BESS value streams cannot be monetized and require new regulations and power market design reforms.”
In particular, how do you see the way forward with respect to financing BESS projects, which are inherently capital-intensive?
In India, a significant financial viability gap is present between BESS costs and its value that can be derived through current regulatory mechanisms, which has limited the development of market-based solutions for BESS. While upfront hardware costs for BESS in India and international mature markets do not vary significantly, the financing costs are much higher, especially when the off taker is financially constrained electricity utilities/discoms. Moreover, several BESS value streams cannot be monetized and require new regulations and power market design reforms. These factors, amongst others, combine to limit the ability for the first wave of BESS projects to get off the ground promptly. For instance, till 2023, India has almost 1.5 GW of stand-alone tenders that have been stuck for the past 3 years due to poorly managed bids, high discovered tariffs, and regulatory bottlenecks, and therefore unable to reach financial closure. With concessional and de-risking capital from the public or philanthropic sector, these projects can become highly attractive to the private sector. A blended finance mechanism is required to deploy BESS at scale in India. A good example of how concessional capital can drive early BESS projects is the Delhi pilot project.
:We are witnessing a growing momentum around ‘non-lithium’ technologies.”
When it comes to BESS, one invariably thinks of lithium-ion battery technology. Are there alternatives emerging? Do you foresee hydrogen as a viable alternative, perhaps in the long run?
The battery energy storage sector is undergoing a fascinating transformation, and what excites me the most is the emergence of new technologies beyond the dominance of lithium-ion. While lithium-ion batteries currently hold over 90 per cent of the market share, the future of energy storage will be shaped by innovations that address critical factors such as raw material availability and the need for longer-duration storage solutions, particularly those capable of storing energy for 6 to 10 hours or more.
We are witnessing a growing momentum around ‘non-lithium’ technologies like Sodium-ion, Iron-air, Redox Flow, and Nickel-Hydrogen batteries. These alternatives are being tested in various international markets, specifically for their potential to meet the demands of grid-scale applications. Given their promise, I believe that some of these technologies will reach commercial viability within the next 3 to 5 years. For India, this could be transformative.
As the country accelerates its energy transition, the deployment of these next-generation storage technologies will be crucial for managing grid stability and integrating large-scale renewable energy into the system. They also offer the added benefit of alleviating supply chain pressures on lithium and other rare materials, which are becoming increasingly critical in a global context. As we look to scale clean energy initiatives across emerging economies, these technologies will not only drive innovation but also enhance the resilience and sustainability of energy systems, particularly in a country like India, where energy demand is rapidly growing.
“We are currently working closely with several state discoms to help them roll out high-quality BESS tenders.”
Given that BESS will play a critical role in ensuring stability of India’s rapidly growing power grid, how do you see the evolving supportive role of GEAPP?
At the Global Energy Alliance for People and Planet (GEAPP), we are strongly committed to driving the growth of India’s BESS market, which is essential for the nation’s energy transition and the decarbonization of its power grid. Our efforts focus on mobilising technical expertise and concessional financing to support the development of around 1 GW of BESS projects by 2026.
We are currently working closely with several state discoms to help them roll out high-quality BESS tenders. These collaborations aim to ensure that they can secure BESS services at competitive rates, making these solutions more affordable and scalable. In addition, we are creating a ‘Post Commissioning Support Package’ specifically for early adopter discoms, which will help them manage their BESS capacity safely and efficiently while extracting maximum commercial value through the use of advanced software and data tools.
By supporting the deployment of these storage technologies, GEAPP is not only promoting BESS adoption but also aiding in strengthening India’s energy system for the long term. Through a focus on innovation, capacity-building, and strategic collaborations, we aim to accelerate the country’s renewable energy ambitions and help achieve a sustainable energy future.
Inside pictures relate to the Kilokari BESS project in Delhi, initiated by GEAPP
