5 Reasons Why BESS Will Be a Focal Point of Energy Business in 2025

Battery Energy Storage Systems (BESS) are a very crucial component of the renewable future that the world envisions. Recent years saw a tremendous increase in renewable energy and with it energy storage solutions, like BESS, emerged as a missing piece of the puzzle in competition against fossil-based power to dominate the energy sector. As a result, the global energy storage market added over 175 GWh of installed capacity in 2024.  In the year 2025, BESS is expected to be the talk of the town globally as more and more market players are now pushing for the technology.

The global energy storage market is expected to add over 220 GWh of new capacity in 2025, driven by a rise in tenders for BESS projects, many of which may be commissioned this year. India’s BESS market is also expanding due to the surge in renewable capacity as the country progresses toward its 2030 renewable energy targets.

As per one SBI report, India is set for a substantial expansion in energy storage capacity, with projections suggesting a 12-fold increase to approximately 60 GWh by FY32, of which 42 GWh is projected to be contributed by Battery Energy Storage Systems (BESS).

The State of BESS in India

India has now made BESS an integral part of its renewable sector growth. For instance, The share of renewable energy projects incorporating energy storage solutions has significantly increased from 5 percent in FY20 to 23 percent in FY24. While BESS and Pumped Storage Projects (PSP) are projected to dominate the market, BESS is poised to grow over 375 times the current capacity while PSP is set to grow four-fold, insignificant in comparison to BESS, by FY32.

The government of India launched a INR 37.6 billion (~USD 452 million) viability gap funding program to support the installation of 4 GWh of BESS by the financial year 2026. In addition, to reduce reliance on imports, significant investment is being made in manufacturing with a projected USD 41.22 billion (INR 3,50,000 crore) opportunity in the BESS ecosystem until FY32. Thus, the market is set to be at the core of developmental priorities in India through 2025. 

Plethora of Upcoming Projects 

The country is witnessing an increase in demand for battery energy storage systems to meet round-the-clock and peak power supply requirements. Last year saw a substantial increase in tendering activity. Further, a number of BESS projects are also reaching the deadline of commissioning in 2025. 

About 122 GWh of Energy Storage System (ESS) capacity was tendered across different technologies, of which 28 GWh was allocated to Battery Energy Storage Systems (BESS). 

As of September 2024, 211 MWh of BESS capacity was operational, with 178 MWh commissioned in the year thus far. Meanwhile, 37 GWh of ESS tenders remained open, including 17 GWh for BESS. Key tenders in 2024 included SECI’s 8,000 MWh BESS tender (Sep 2024), UPPCL’s 1,200 MWh BESS project (Aug 2024), and NTPC’s 400 MWh BESS tender (Oct 2024). SECI also floated a 1000 MW/2000 MWh standalone BESS tender. 

With several projects expected to come online soon, India will add 1.8 GWh of BESS in 2025, a giant leap from its present capacity. Some of the major projects include SECI’s 600 MWh BESS project by Renew and Greenko (priced at INR 4.30/kWh) and NTPC’s 3,000 MWh standalone PSP project executed by Greenko. Additionally, Gujarat Urja Vikas Nigam Ltd (GUVNL) is set to commission 500 MWh of BESS as well. 

Why is BESS Important for a Renewable Future?

Renewable power sources, such as solar and wind, aren’t always reliable because they are susceptible to weather, day-night cycles, and seasonal changes. While this remained a major bottleneck for renewable adoption for a very long time, the energy storage systems, such as BESS, enable the storage of excess energy generated during peak production times which is then used to maintain a steady supply when renewable sources are not producing power.

BESS is an answer to many of issues facing modern grids as well. These include challenges, such as load fluctuations, equipment failures, and natural disasters. BESS provides rapid-response backup power, helping restore grids quickly during emergencies and improving resilience.

For example, Australia’s big battery storage project, with a 1.68 GWh capacity, strengthens the New South Wales grid. It responds within seconds to grid demands, delivering instant backup power to manage unexpected failures and fluctuations.

BESS is also crucial in providing flexible solutions for microgrids or off-grid systems to ensure reliable power. It creates independent energy systems that enhance stability, efficiency, and energy self-sufficiency, driving socio-economic growth. 

For example, the Bahariya Oasis microgrid BESS project in Egypt integrates large-scale solar inverters and energy storage to power local businesses. Given geographical constraints and weak infrastructure, the system relies primarily on solar energy, reducing dependence on diesel generators.

India’s abundant sunshine year-round makes solar energy a cornerstone of its renewable strategy. Solar power is rapidly gaining traction, and BESS is playing a crucial role in the same. In addition, the surge in electric vehicles (EVs) also increases the utility of BESS as it facilitates EV integration by bolstering fast-charging infrastructure and managing grid load. These systems appropriately respond to grid voltage and frequency fluctuations, and offer essential services like frequency regulation and voltage support. With its wide applications across sectors, the Central Electricity Authority (CEA) estimates that India will install 34 GW or 136 GWh of BESS capacity by the end of this decade. Recent developments further support this growth, starting in 2025.