By Enersider Desk | New Delhi
Battery energy storage system (BESS) cost has fallen steeply to Rs 2.1 per unit from about Rs 10.18 per unit discovered through tariff-based competitive bidding during 2022-23, an official statement by the Power Ministry said.
The cost of BESS discovered through tariff-based competitive bidding during 2022-23 was about Rs 10.18/kWh, if the storage is used for two cycles daily, State Minister Shripad Yesso Naik noted in a reply to the Rajya Sabha.
According to the statement, the cost of BESS discovered through competitive bidding in the recent past has substantially reduced to about Rs 2.1/kWh without VGF (viability gap funding), if the storage is used for two cycles daily.
However, based on the market trend, it is expected that BESS will be utilised for 1.5 cycles per day which corresponds to storage cost of ₹ 2.8 / kWh. Based on the recent tenders, the average rate of electricity from solar projects is in the range of ₹ 2.5 / kWh.
To support large-scale deployment and improve affordability, the Ministry of Power is administering a VGF scheme for setting up 13,220 MWh of BESS capacity, backed by budgetary support of Rs 3,760 crore. In addition, the ministry launched another VGF scheme in June 2025 to develop 30 GWh of BESS capacity, with financial assistance of Rs 5,400 crore from the Power System Development Fund (PSDF).
The government has also provided a waiver of Inter-State Transmission System (ISTS) charges for co-located BESS projects commissioned by June 2028, applicable for a period of 12 years. For non-co-located BESS projects, ISTS charge waivers are available for projects commissioned before June 2025, after which the waiver will be reduced annually in graded steps of 25%.
Separately, the Ministry of Heavy Industries is implementing the Production Linked Incentive (PLI) scheme namely “National Programme on Advanced Chemistry Cell (ACC) Battery Storage”, to establish 50 GWh of domestic Advanced Chemistry Cell manufacturing capacity, out of which 10 GWh is earmarked for Grid Scale Stationary Storage (GSSS) applications.
The scheme was approved in May 2021 with a total outlay of ₹18,100 crore.
According to the statement, the PLI scheme would encourage investment in the domestic manufacturing of cells for grid-scale applications, reduce dependency on imports and eventually reduce the cost of BESS in future.
This information was given by the Minister of State for Power, Shripad Yesso Naik, in a written reply in the Rajya Sabha.
Image Source: Tata Power
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