4 days ago
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India’s accelerated enlargement of artillery vigor retention procurement whitethorn beryllium hard to execute arsenic tariffs discovered successful 2025 auctions progressively don’t look to beryllium economically viable, according to a study released by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics.
India’s cleanable vigor modulation is becoming progressively babelike connected vigor retention systems arsenic renewable powerfulness procreation expands. Standalone vigor retention tenders — wherever retention capableness is contracted independently of renewable procreation assets — accounted for much than 71% of the country’s full vigor retention tendered capableness successful 2025, with standalone Battery Energy Storage System (BESS) projects comprising astir 60% of this share.
During 2025, astir 10.4 gigawatts (GW) of standalone BESS capableness was allocated crossed 18 tenders. The bulk of awarded capableness progressive two-hour duration systems, peculiarly those designed to discharge doubly regular to assistance conscionable greeting and evening energy request peaks.
The report, Viability of Standalone Battery Energy Storage Tariffs Discovered successful 2025, examines 18 auctions successful which astir 10.8 GW of standalone BESS capableness was tendered and astir 10.4 GW allocated. It flags a widening disconnect betwixt tariffs and underlying costs. “Between 2022 and 2025, tariff simplification acold exceeded artillery outgo reductions. Average standalone BESS tariffs declined by 79.6% during this period, whereas artillery battalion prices fell by 36.5%,” it notes. Lithium carbonate prices successful China — a cardinal input for lithium robust phosphate cells — astir doubled betwixt mid-2025 and December 2025, and China’s phased withdrawal of artillery export rebates from April 2026 is expected to propulsion landed artillery costs successful India higher. Tariff simplification “accelerated sharply successful the 2nd fractional of 2025,” the study observes, “suggesting speculative bidding behaviour.”
Then determination is besides the question of the antecedents of the task developers. Only 46.3% of allocated capableness went to firms, the authors classify, arsenic having anterior acquisition successful the BESS sector. Of the apical 15 awardees, 10 were caller entrants, “including firms chiefly engaged successful unrelated industries specified arsenic nutrient processing, mining and packaging.”
‘Risky segment’
Based connected benchmark estimates developed by JMK Research, a two-hour, two-cycle BESS strategy with a 12-year tenure would necessitate tariffs of astir ₹2.3 lakh/MW/month to stay financially viable nether prevailing assumptions related to superior expenditure, operating costs and financing. Against this benchmark, astir 75% of the allocated two-hour BESS capableness successful 2025 falls into what the study categorises arsenic a “risky” segment, wherever tariffs whitethorn beryllium insufficient to enactment task execution.
India’s installed BESS capableness stood astatine astir 1.8 GWh arsenic of March 2026 — acceptable against 50 GWh commissioned successful the United States successful 2025 and 65 GWh added by China successful December 2025 alone. The study warns that cumulative commissioning delays of 9 to 18 months could constrain renewable integration and India’s 500 GW renewable capableness people for 2030, and recommends cost-reflective tariff floors, stricter eligibility norms and a standardised outgo information mechanics for storage.
