India’s BESS Set for Sharp Rise to 45-50 GWh Over Two Fiscal Years: Crisil

New Delhi, Sep 28 (KNN) India’s battery energy storage system (BESS) capacity is expected to reach 45-50 GWh over the current and next financial years, compared with around 1 GWh installed by the end of FY26, according to Crisil Ratings.

The report said the increase will be supported by projects under implementation and government policy support. However, around 8-9 GWh of awarded capacity faces a higher risk of delays, ANI reported. 

Around 50-55 GWh of BESS capacity is scheduled for commissioning in FY27 and FY28. Distribution utilities are expected to account for around 40 GWh, while 10-15 GWh is expected to serve commercial and industrial consumers or operate in the merchant market.

Renewable energy accounted for around 39percent of India’s installed power capacity and 15percent of electricity generation in FY26. BESS can store surplus renewable electricity and supply it during peak demand periods, helping manage fluctuations in renewable generation.

Government auctions involving BESS rose to nearly 40percent of total auctioned renewable capacity in FY26, from around 5percent in FY24 and FY25.

Manish Gupta, Senior Director and Deputy Chief Ratings Officer at Crisil Ratings, said around 12 GWh, or 21percent of under-construction BESS capacity, faces weak return potential due to higher battery prices.

"Nearly 21percent of the under-construction BESS capacity, equivalent to about 12 GWh, faces weak return potential which may lead to some delays in commissioning. The risk has emerged because battery prices have hardened in 2026, while tariffs bid out for these projects were relatively low," Gupta said.

Gupta said developers generally procure batteries about a year after winning project bids, exposing some projects awarded in 2025 to higher battery prices.

Crisil Ratings Director Ankit Hakhu said around 8-9 GWh of the 12 GWh capacity facing weak returns also faces challenges due to limited implementation experience among some project sponsors.

"While BESS projects typically face relatively lower land acquisition and connectivity-related challenges compared to conventional renewable energy projects, equipment procurement remains a key risk given the sector's continued dependence on overseas suppliers for batteries and other critical components," Hakhu said.

(KNN Bureau)