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Government initiatives will provide support for 13,220 MWh of battery energy storage capability.

India’s Battery Energy Storage System(BESS) expenses have considerably decreased in recent competitive tenders, with prices dropping from INR10.18 per kilowatt-hour (kWh) in 2022 to 2023 to approximately INR2.1/kWh for two cycles each day, enhancing the accessibility of large-scale power storage.

According to market trends, BESS will be used for 1.5 cycles daily, resulting in a storage cost of INR2.8 / kWh, as stated in a press release from the Ministry of Power. Nevertheless, the typical electricity rate from solar projects falls between INR2.5 / kWh, according to recent tenders.

To ensure cost-effectiveness, the ministry will introduce a Viability Gap Funding (VGF) Scheme, which includes the establishment of 13,220 megawatt-hour of BESS capacity with financial assistance amounting to INR3,760 crore.

They have also introduced a VGF initiative aimed at developing 30 gigawatt-hours (GWh) of BESS capacity, backed by a financial assistance of INR 5,400 crore from the Power System Development Fund.

The Inter-State Transmission System fees are exempt for a period of 12 years for BESS projects that are co-located and completed by June 2028. For projects that are not co-located, the exemption is valid only for those finished prior to June 2025, with the exemption amount reducing by 25% each year for subsequent projects.