Call for a self-reliant storage ecosystem

Bharat is still in the early stages of scaling up battery storage capacity. Energy leaders envision a future where homegrown storage solutions secure 24×7 power, cut import dependence, and align innovation with sustainability, turning batteries into the backbone of the nation’s green growth.

When Prime Minister Narendra Modi announced the major breakthrough of achieving 50 per cent renewable energy capacity ahead of time, and the boost in nuclear energy and the semiconductor sector in the coming years, listening down from the lanes of Red Fort, the industrialists must have been amazed. The announcements have definitely energised all the stakeholders of the power industry in the country as well as abroad.

One notable thing in the current power scenario is the emergence of energy storage. Energy storage is the process of capturing energy when production exceeds demand and releasing it when needed. There are certain assets and technologies, such as batteries (lithium-ion, sodium-ion, flow batteries) and pumped hydro storage, which facilitate energy production. This particular arm of the energy sector provides backup power and manages peak demand, ensuring smooth renewable integration.

Industrialists and experts in the energy storage domain believe that this sector plays a critical role, especially in the power landscape of Bharat. The role is so significant that it is not possible to move ahead to achieve a 24×7 quality power supply for all in the country.

Let us explore the in-depth of the emerging energy storage sector. EPR will try to shed light on the uncovered domains of energy storage.

Current status of the energy storage sector

The rapid adoption of battery energy storage systems (BESS) hinges not only on technology and industry readiness but also on supportive policy frameworks and regulatory clarity. The large-scale deployment, especially across the commercial and industrial (C&I) segment, will be possible only if the government takes decisive steps.

Highlighting the role of policy intervention, Neeraj Kumar Singal, Founder and Director of Semco Infratech Pvt Ltd, emphasises that Bharat could learn from China’s model. “What China is doing at present is that every state is issuing different kinds of policies for peak shaving and ancillary services so that each C&I user can avail of these services,” he points out. Instead of restricting battery installations to government agencies and Discoms, Neeraj suggests empowering individual C&I users. “Every C&I user can put up these systems at their level and also stack various kinds of revenues from these services internally and externally. This will enable large-scale adoption of C&I systems in Bharat and create a very stable environment for energy storage.”

He further says that this shift requires government-backed policy changes. “It can be done only by policy intervention, by advising discoms that the policy should be drawn in a way wherein it becomes sufficient for all the C&I users. If they install these systems, they should have external benefits and also be able to support the grid as and when required,” he adds.

However, from a project developer’s perspective, regulatory ambiguity, especially around taxation, remains a significant hurdle. Sharing his views on the issue, Aditya Prasad, Senior Consultant from Customised Energy Solutions (India), points to GST treatment as a major pain point. “One of the most painful issues is GST on the equipment. Developers often tie up with Chinese or foreign players to import solutions, and as per current regulations, these attract certain GST levies,” he explains. Unlike other industries, energy storage developers cannot pass on these costs easily. “The unique challenge is that the outcome of energy storage is electricity. But electricity is not covered under the GST ambit. Most developers do not sell electricity directly; they rent their assets. So, there should be a chance of offsetting their input taxes or input GSTs,” Aditya stresses. The debate over input tax credit (ITC) eligibility has persisted for years, creating uncertainty for investors. Many people are awaiting clarity from the government on whether ITC credits would be available. While this may not drastically increase rollout overnight, it will certainly go a long way in supporting the growth of the storage industry.

Speaking from a technical perspective, Bharat is still in the early stages of scaling up battery storage capacity. Dr Yashodhan Pramod Gokhale, VP-Battery Technology from JSW Energy, explains the role of battery management systems (BMS) in ensuring safety. “There are three layers of BMS—the cell level, the rack level and finally the system level that communicates with the EMS (energy management system). These protect against over-voltage, thermal instability and cell imbalance,” he says. However, he acknowledges the dominance of Chinese suppliers in the Indian market. “At the moment, C&I BESS is more than 99 percent dominated by Chinese companies like REPT, BYD and others. Hardly anyone has installed a 5 MWh, 20-foot container in Bharat yet. Most projects are still at the 2.5- or 3.5-MWh stage, with everything being imported from China,” Dr. Yashodan observes.

Sustainable battery ecosystem

The adoption of storage technologies has also raised critical questions about end-of-life management, safety and sustainability. Without clear policies and standardisation, battery end-of-life management will be a long-term operational challenge.

Shading light on the issue, H.C. Sharma points out the structural gaps that currently hinder smooth adoption. “The prices have come down because of battery costs, but again, everything is coming from China. As a supplier, once you have delivered the battery, the question remains—who takes responsibility for it? Is it the supplier, the discom or the end user? We need to develop the infrastructure behind it.”

One of the most urgent issues, Sharma notes, is the lack of standardised battery packs. “Suppose one battery pack goes wrong—are there standard dimensions that allow you to replace it with another manufacturer’s pack? Probably not. If a pack is supplied from an interior part of China, how will you find a replacement or repair mode? These are electronics—BMS, EMS, PCs—all very manufacturer-specific. How is a user supposed to handle it?”

Citing a practical case where a storage system failed during the warranty period, he says, “We procured a battery energy storage system with an inverter from a U.S. company. It failed within the guarantee period, but the supplier asked us to ship it back to their U.S. factory. Imagine the cost and effort for the user; it is simply not practical.”

Similarly, there is uncertainty of relying heavily on overseas suppliers, especially given long project lifespans. Dr. Yashodhan shares, “These projects come with 10, 15, even 25-year warranty. We don’t know if companies in certain provinces, let’s say in China, will exist at that time or not. That is the uncertainty. Fortunately, Indian companies like JSW, Amara Raja and Exide are entering the space, building indigenous battery packs. It is only a matter of a few quarters before we see competitive ‘Make in India’ solutions.”

Self-sustenance through domestic manufacturing and recycling is critical not only for cost savings but also for long-term energy security.

Bharat could unlock vast untapped capacity through vehicle-to-grid (V2G) integration. Sharma suggests, “By 2030, Bharat will need around 400 GWh of storage. Out of this, about 30–40 GWh is already sitting in vehicle batteries. If we can roll out regulations and infrastructure to enable V2G, even 10 percent of that capacity can help manage peak demand. The potential is huge, and we are not incurring extra costs.”

He illustrates the idea with a Delhi-specific example, saying that by 2030, Delhi may consume around 110 MU daily, peaking at 150 MU. At the same time, car batteries in the city could store 80 MU—enough to power Delhi for half a day. That’s the kind of hidden potential waiting to be tapped.

Sustainability is also linked to local climatic and operational realities. Elaborating on this, Dr Yashodhan says, “Weather plays a very important role. Battery containers should be liquid-cooled or hybrid-cooled. In tender documents, we assume two cycles a day—730 cycles annually—but in reality, the figure is closer to 450. If you are asked for a 12-year warranty, manufacturers typically give a five-year warranty plus an additional seven years. But in reality, cycle usage is lower, and conditions vary. A battery in Ladakh will behave very differently from one in coastal Tamil Nadu. We must customise storage solutions to India’s geography.”

Channelising investments

Investment in energy storage has become increasingly critical to ensure grid stability and long-term sustainability. While Chinese players dominate the global cell manufacturing landscape, Bharat holds significant opportunities in integration, localisation and value addition. Meanwhile, India Energy Storage Alliance (IESA) has projected an investment of ₹4.79-lakh crore by 2032. Speaking in the context, Aditya Prasad says, “The entire investment prospect was required for supplying the best system for the grid in general, specifically for stationary energy applications.” He emphasises that the market demonstrates a tremendous requirement for storage capacity and that Bharat must quickly catch up. While China has mastered cell manufacturing over the past decade, system integration remains an area where Indian companies can add considerable value. Aditya further explains that out of this, he would say at least 30–40 percent can very well be added locally within Indian boundaries whether in the form of manufacturing storage containers, racks or even the EMS. “I don’t see any reason why EMS software cannot be created within the country,” he says.

Several startups have already come up with their innovations in this space. They have designed their own container, cooling systems and sourced suppliers locally, even though they import modules in final form. It shows there are still many low-hanging fruit that the Indian industry can capture. However, the availability of an ecosystem is still a challenge. The ecosystem has to develop to meet the requirements, and there are positive opportunities for the Indian industry in general. At least 30–40 percent of the investment in grid-scale storage can be captured locally.

Meanwhile, H.C. Sharma highlights how practical experience over the last six to seven years has already delivered important learnings. EMS is not a big thing. We once depended on a foreign supplier, and they charged us heavily for poor service. Later, we had it developed by a startup in India, and in just two to three months, they gave us a perfect system that is running smoothly. So, EMS is definitely not an issue; it is just software, and good startups here can do it,” Sharma remarks. There are gaps in critical hardware, which must be acknowledged. Sharma shares, “Where we are struggling today is with PCS, the inverters converting DC to AC. We have seen nearly 10 percent failure in PCS, which is huge. Battery or BMS failures are rare, but PCS failures are frequent, and there are few reliable suppliers available. But I am sure, once the demand is visible, Indian companies will develop it. There is no reason PCS cannot be developed here,” H.C. Sharma adds. He stresses the need for localisation.

Looking into the broader aspect, Bharat is already moving in the right direction with gradual localisation. Dr Yashodhan points out, “In a few months, many companies in Bharat will have localised container manufacturing. At JSW, we are also progressing step by step, first with container localisation, then components and eventually cell manufacturing. This is very important because, at the moment, nobody in Bharat is making LFP prismatic cells,” he explains.

While the government’s PLI scheme is pushing companies to manufacture cells, challenges remain in acquiring machinery and securing critical minerals. “It is not a simple recipe, but we are optimistic. In the coming years, we will surely have made-in-India cells and at the same time, we will stabilise solid container manufacturing,” he adds.

Bharat is also experiencing another trend: the evolution in battery technology is changing every six months, but projects are built for 20–25 years. Yashodhan explains, “We have to find a position where innovation aligns with sustainability. Otherwise, by the time a project is executed, the cells risk becoming obsolete. Innovation has its breathing period, and we must learn to balance it.”

Conclusion

To conclude, the power industry as a whole is optimistic about domestic participation in the energy storage sector. Over time, technology and policies will mature, and Indian players are expected to strengthen their presence. The country requires a multi-pronged approach to scale up the adoption of energy storage for sustainable power for all.

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Quotes:

Aditya Prasad, Senior Consultant- Customised Energy Solutions (India)

“I don’t see any reason why EMS software cannot be created within the country.”

HC Sharma, Chief Officer, Tata Power-DDL

“By 2030, India will need around 400 GWh of storage. Out of this, about 30–40 GWh is already there in vehicle batteries. If we can roll out regulations and infrastructure to enable V2G, even 10 percent of that capacity can help manage peak demand.”

Neeraj Kumar Singal, Founder & DIRECTOR- Semco Infratech Pvt Ltd

“Every C&I user can put up energy storage systems at their level and also stack various kinds of revenues from the services internally and externally. This will enable large-scale adoption of C&I systems in India and create a very stable environment for energy storage.”

Dr Yashodhan Pramod Gokhale, VP-Battery Technology- JSW Energy

“We have to find a position where innovation aligns with sustainability. Otherwise, by the time a project is executed, the cells risk becoming obsolete.”

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