Standalone Energy Storage Systems (ESS) are emerging as the cornerstone of India’s utility-scale ESS auctions, making up 64% of the total tenders floated between January and March 2025, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics. The report highlights that Indian agencies collectively issued tenders for 6.1 gigawatts (GW) of Standalone ESS capacity during the first quarter of 2025.
Charith Konda, Energy Specialist – India Mobility and New Energy at IEEFA, noted that Standalone ESS are crucial for accelerating the growth of variable renewable energy (VRE) in India, supporting grid resilience and flexibility. He explained that these systems act as independent, flexible assets that enhance network stability and optimise energy use. The report also highlights that the government’s viability gap funding (VGF) scheme—offering up to 30% capital support for standalone BESS projects—has been a major factor driving the rise in Standalone ESS tenders.
Prabhakar Sharma, Senior Consultant at JMK Research & Analytics, stated that the VGF scheme has helped lower the high capital costs of BESS projects, improving their economic viability. He noted that recent auctions in Maharashtra and Rajasthan saw battery storage tariffs drop to Rs219,000–221,000 per MW per month, nearly 40% lower than non-VGF projects with similar specifications.
Although Standalone ESS can be owned and operated by utilities, grid operators, or third-party entities, new business models are emerging. Energy Storage as a Service (ESaaS) is making storage more accessible by offering subscription-based or pay-per-use options.
The rising demand for Standalone ESS is drawing both established players like JSW Energy, Greenko, and Torrent Power, as well as new entrants such as Pace Digitek, Oriana Power, Kintech Synergy, and Bondada Engineering, particularly through Battery + ESS (BESS) tenders.
Despite the strong early momentum, the young Standalone ESS market still faces challenges similar to those affecting other areas of India’s energy transition.
Pulkit Moudgil, Research Associate at JMK Research & Analytics, explained that a major challenge has been the delay or cancellation of power sale and storage agreements, as offtakers often expect further tariff reductions with declining battery prices. He noted that these uncertainties have already resulted in the cancellation of 6.4GW of awarded capacity.
The report also points to several structural challenges in the market, such as the limited availability of utility-scale equipment vendors and the absence of domestic battery cell manufacturing. Heavy reliance on imported critical minerals like lithium and cobalt exposes the sector to global price volatility and geopolitical risks. Moreover, smaller developers face difficulties in accessing affordable project financing, as investors remain cautious about early-stage risks and extended payback periods.
Prabhakar Sharma noted that India’s Standalone ESS market is at a crucial turning point. He emphasized that with continued policy support, streamlined regulations, and investments in domestic manufacturing and supply chains, the sector can overcome early challenges and realize its full potential.
