India’s Ultra-Low Battery Storage Bids Spark Viability Concerns
India’s push for battery energy storage to support its renewable energy goals faces challenges as record-low bids raise doubts over project feasibility. Out of 83 GWh tendered since 2021, only 36 GWh have been awarded, with some recent bids in Rajasthan coming in below 1.5 rupees per kWh—far below industry expectations. Experts warn that such low tariffs may make projects economically unviable and deter experienced players from participating.
Industry analysts also highlight safety risks, as the low bids encourage the use of cheaper, lower-quality lithium-ion batteries, which have shorter lifespans and can be prone to fire hazards, especially in high-temperature regions. Despite India’s target of 236 GWh storage by 2032, only 500 MWh of battery systems are currently operational, and coal is expected to remain a major part of the power mix for the next decade.
Some companies that won tenders are reportedly planning to sell projects for a premium rather than build them, turning the sector into a financial play and raising concerns about non-performing assets. The India Energy Storage Alliance is urging the government to revise tender guidelines, include technical criteria, enforce performance benchmarks, and phase domestic manufacturing incentives to ensure safer, viable, and high-quality battery storage projects.
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