“It was the best of times; it was the worst of times…
the age of wisdom, the age of foolishness,
the epoch of belief, the epoch of incredulity,
the season of Light, the season of Darkness,
the spring of hope, the winter of despair”
-Charles Dickens (A tale of two cities)
In IESA’s year-end chat show, Shashank Sharma, the founder of Sunsure and Rajiv Mishra, the MD of Apraava, described the year 2025, remembering Charles Dickens’s famous lines from tale of two cities, well, let me start from where they finished –
India’s ESS market grew from 122 GWh to 224 GWh cumulative, a 1.8X times increase YOY, with a total of 60 GWh projects under execution, 80 GWh under various stages of tendering and 35 GWh under awarded stage. The total pipeline of BESS projects stands at 92 GWh increasing by 74 GWh (just 19 GWh in 2024) while PSP stands at 132 GWh from just 50 GWh in 2024 (competitive bidding).
A total of 69 tenders accounting to a total capacity of 102 GWh was issued during the year a 35% jump from 2024 and almost double the count of tenders issued in 2024 and almost equal to the cumulative of all tenders issued from 2018-2024 in terms of capacity.
The story when I view from my database is extremely detailed, of-course we can complain but kudos to all the actors who worked, discussed, deliberated, researched, negotiated, visited sites, factories, consulted, constructed and decided to build this ESS story for India. To put the story is a singe paragraph would be a crime and hence I decided to write about everything that happened through the year, from Jan to December 2025
When Policy and Regulations took centre Stage
The year’s first policy level enabler came cabinet approved National Critical minerals Mission. In the Union Budget a list 35 additional capital goods for Battery manufacturing was included in the customs exempted list. Tax on all battery chemistries was streamlined to 18%.
In March, Grid India shared Short Term Resource Adequacy Plan 2025-26, projecting requirement of 4GW/17 GWh BESS and 3 GW/ 16 GWh PSP by 2025-26. National Committee on Transmission (NCT) for the first time conducted a study to consider BESS as an alternative to HVDC line for Rajasthan.
CTUIL proposed a requirement of 3 acres/ 100 MWh of land as benchmark for BESS projects. CPCB issues draft guideline for storage waste management. MoEFCC shared amendment to Battery waste management rules and Environmental Audit Rules. MNRE Issued draft guideline for Battery Testing and CERC shares draft amendment to propose Business case for BESS as transmission asset and thermal
Ministry of Power (MoP) ushered out many enablers through the year to promote BESS deployment. First, after the success of the first tranche of VGF (13.2 GWh), MoP shared second tranche of VGF to support 30 GWh of standalone BESS for total amount INR 5400 Cr(INR 16 lacs/MWh per project). 25 GWh capacity is allotted to states and 5 GWh to NTPC. Later also amending the guideline to include the software application of EMS to be domesticated, allowing 4-hour 1-cycle (6300 cycles contract period) as part of VGF and further in December through another amendment to have 20% domestic value addition in BESS availing VGF.
MoP, also extended the ISTS waiver for PSP and solar with BESS extended to 2028, while standalone BESS ISTS charges to be effective from June 2026 and shared electricity amendment rules 2025, defining asset class for ESS and its usage. Draft amendments proposal includes ESS to be utilized either as independent energy stage systems or as part of generation, transmission, distribution, it can be owned or based or operated by any of the above and shall have the same legal status as that of owner the developer or owner of ESS shall have the option to sell or lease Covent out the sage seal in file or in part to any consumer or Utility.
Ministry and also shared PSP tariff based competitive bidding guidelines and amending the guidelines for FDRE. A plan is also in work to utilize BESS for thermal power plants.
CEA followed suit, invited comments in prioritization of identification critical imported items and support required for their indigenous development of such items. Shared draft safety regulations for BESS, proposed construction standards for RE plants including ESS, started stakeholder discussions of minimal domestic value addition in BESS and its preparedness and finally an advisory (oh how I wish this was a mandate!!!) on incorporating minimum 2 hour storage equivalent to 10% of installed solar project capacity in all future solar tenders.
States also brought about policy and regulatory support for BESS development.
- Assam Energy Regulatory Commission released guidelines for procurement and dispatch of BESS.
- Rajasthan Mandated BESS for Captive projects exceeding 100% contract demand and also issued draft regulation for BESS deployment.
- Bihar’s Policy for Promotion of Bihar New and Renewable Energy Sources 2025 proposed ESS Target of 6.1 GWh by 2030 (4.5 GWH BESS and 1.6 GWh PSP),
- Odisha and MP shared pumped hydro policy.
- Andhra Pradesh shared Draft BESS Regulations and planning, procurement, deployment regulations for BESS.
- Rajasthan mandates 5% ESS (at least 2 hrs of storage) for renewable energy projects above 5 MW and shared BESS Guidelines for the state and
- Uttarakhand included BESS in RE Tariff Regulations.
Project Commissioned awarding and Tariff Approval
The year though started on a discouraging note with commission’s rejection of SECI’s ESS 1 tariff adoption petition and an underwhelming response to SECI’s peak power specific FDRE tender (only 0.2 GW was awarded out of 2 GW capacity).
What followed was impressive though, 11 projects of total 5.5 GWh BESS, 4.3 GW (FDRE) got tariff approvals from commission
The needle of commissioned projects started to move too, 5 projects (2 standalone, 1 solar + BESS and 2 RE-RTC) got commissioned in 2025, a total of 547 MWh of project commissioning bring up the cumulative number to 758.4 MWh till 2025.
Amidst all these news, Adani announced strategic entry into BESS with one of the world’s largest single location BESS project – 1126 MW/ 3530 MWh, planned commissioning by March 2026 and NTPC awarded state of art LDES project to Triveni turbines with energy domes innovative CO2 battery technology at NTPC Kudgi.
What’s better than to end the year with a massive foot, India’s first merchant BESS installation of 60 MWh by Juniper
Tariffs the ever-dropping tariffs
Every new tender auctioned in the year saw a minimum of new organization coming into the BESS landscape in India. A total of 50 new bidders, (I swear I did not make up this number!!!) emerged winners in the auction processes carried out in 2025, each tariff lower than the previous one. One question remained perennial after each auction “How is this possible? What battery costs are they considering at this tariff level?” Talking of tariffs, lets spend some time on this topic.
- Solar + 2 hrs of BESS saw tariff discovery of INR 3.09/kWh (NHPC) just one tariff discovery in this category, since then all have transferred to 4 hour tenders.
- Solar + 4 hrs of BESS saw tariff discovery of INR 3.32/kWh (SJVN), this dropped to 3.13 (NHPC).
- RUMSL awarded 600 MW Solar with 220 MW/880MWh project at INR 2.70-2.76/kWh (2 cycles, one cycle charging by DISCOM).
Standalone BESS of 2 hrs saw tariff discovery of INR 2.21 lacs/MW/month (RVUNL), which increased to 2.45 lacs/MW/month in Telangana and 2.49 (KPTCL) (both project remains in awarded stage as of today!), 2.46 (TNGECL), 2,54 (KPTCL), NVVN (Rajasthan) found the tariff coming down to 2.16, which further reduced to 2.08 (NHPC – AP), this was the results of the tenders under VGF 1, under VGF 2 with lower support the tariff which was talked about most was RVUNLs 2 GWh tender which saw 11 winners at INR 1.77 lacs/MW/month and MSEDCLs 2GWh tender at INR 1.65 lacs/MW/month, increasing slightly to 1.85 in GUVNLs tender and finally to INR 1.48 lacs/MW/month in APTRANSCO’s tender
- Standalone BESS of 2 hours without VGF support found tariff of INR 2.80 lacs/MW/month (the project has since received tariff approval from commission)
- Standalone BESS of 4 hrs saw tariff discovery of INR 4.41 lacs/MW/month (SECI-Kerala), 4.44 (Bihar), 4.34 (NHPC – Kerala), this came down to 3.59 (SJVN – UP), this dropped to INR 2.85 lacs/MW/month in RVUNLs tender under VGF 2
- NVVN (UP) tender discovered tariff of 6.64/kWh for 250 MW/ 1000 MWh standalone BESS
with charging in developers’ scope. The first of its kind.
FDRE, remained muted all through 2025, FDRE RTC model saw tariff of INR 4.82- 4.91/kWh (SJVN), INR 5.06/ kWh (SECI). FDRE Peak Specific model discovered tariff of 6.74/kWh in SJVN tender. FDRE peak assurance model saw tariff of INR 4.74/kWh in TATA Power D tender
PSP, while there was no tariff discovery in 2025. JSW and UPPCL signed 1.5 GW/ 12 GWh Pumped Hydro PPA at INR 77.2 lacs/MW/year, located at Sonbhadra District, UP
Tender Engineering
Tenders in 2025, saw multiple innovations and experiments, from 4-hour 1 cycle standalone tenders to solar + BESS (2 hrs, 2 cycles), to 1.5 cycle standalone BESS and finally demanding grid forming inverters and a new baby in the arena was born, Thermal + BESS. Some also offered freebees like aux power, evacuation network apart from charging power and land while one demanding charging power in developers’ scope; tenders did innovate in 2025.
A total of 69 tenders of total 102 GWh capacity was shared during the year, with GUVNL starting and closing the tenders for the year, with NTPC coming out with the maximum no of tenders, followed closely by SECI, for states it was Tamil Nadu leading the tendering scene in India followed by GUVNL. In terms of capacity of ESS tenders though SECI emerged the leader followed by UPPCL. While in terms of conversion of tenders to execution stage it was Rajasthan which took the lead.
Looking forward
The question why nothing is happening on ground when there are so many tenders being released and awarded in a little misplaced. The momentum picked up for tenders from mid-2023 when the VGF was shared by MoP, since then till today a lot of tenders has been shared and awarded and many have proceeded towards execution too, a single project has a timeline of 18-24 months to get commissioned as per the tender clause, so 2026 will be the year when a number of projects will enter operational phase. All eyes therefore will remain there, whether the performance of these projects is in line to what was committed before. The next challenge is financing of these projects specially the ones with low tariffs, at present the number of projects which has received financing is only a few from the plethora of tenders, of course whether all projects see the light of the day will often be questioned till they are delivered.
2026, will be closely watched for the emergence of BESS in the CCI market, opening new opportunities, right now the excitement is growing but not many projects are happening but this is about to change very rapidly, India has already seen one merchant BESS come up through Juniper, we do expect a few more projects to take the early mover call in this market. Come March, Adani is getting ready to commission India’s largest BESS project in Gujarat and In January Rajasthan is all set to launch tender for the largest Solar + BESS project for India in Pugal solar park, we will also see the commissioning of at least one pumped hydro project and the opening of a new market? Thermal + BESS? If NTPCs project tastes success, then this will be the beginning of a whole new market for BESS.
In an environment where China has been slowly tightening trade and implementing ways of stopping the cost drop of batteries (export ban, wages increase etc) the question remains will the assumptions taken for the ultra-low tariff projects be valid? How much of a cushion does the tariff has? Globally metal prices are increasing as per the latest trends, they did increase in mid-year too, but the battery costs did not increase in reflection to that, it absorbed the volatility then, but will it still absorb? The drop in battery costs has been stagnant for some time now, which way the curve goes from here up or down will decide on many things.
Our domestic market of cell to pack/ cell to containers is also increasing; will this find opportunity to play in this volatile market? With MoPs new amendment that 20% must be domesticated of the total project cost, will this market open an opportunity door for local assemblers and manufacturers? Well, too many questions…. One thing for sure, the battery market loves to break assumptions and long term/ mid-term forecasts thus remains questionable, lets all wait and see how 2026 shapes things, so are you ready for 2026? Well, I am! see you on the better side –
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