India weighs tougher battery rules as 10GWh storage plan takes shape
The renewable energy ministry wants new efficiency and life cycle conditions to ensure only higher-performance batteries qualify under the utility-scale storage PLI scheme.
NEW DELHI: More efficient batteries with longer life cycles could be mandated to address grid stability concerns under a scheme that offers incentives to produce 10 gigawatt-hour (GWh) of utility-scale power storage, said two people in the know of the developments.
“The ministry of new and renewable energy (MNRE) is likely to suggest two new elements of requirement. One is the criterion of round-trip efficiency to ensure that out of the energy infused in a battery, the maximum quantum is usable by the battery or grid operator," said one of the two people quoted earlier. Round-trip efficiency is the percentage of usable energy consumed to charge the battery.
“The other thing being considered is the life cycle of the battery," said the person. Life cycle, or the number of times a battery can be charged and discharged, measures its longevity.
While the MNRE is expected to suggest the new criteria, the final decision will be taken by the heavy industries ministry, said the second person. Both spoke on the condition of anonymity as discussions are preliminary.
The bidding will start once the decision on the new criteria is made.
Queries emailed to the heavy industries ministry and MNRE remained unanswered until press time.
These conditions were not part of the 40GWh of battery storage capacity so far bid under the Advanced Chemistry Cell incentives scheme (PLI-ACC). The ministry of heavy industries is overseeing the scheme in consultation with the ministries of power, new and renewable energy, and communications.
Why efficiency matters
More efficient and longer-lasting batteries are crucial as the grid-scale battery energy storage systems (BESS) are capex-intensive projects with long-term power-purchase agreements between energy providers and distribution companies. MNRE had earlier estimated a storage demand of about 2.3TWh–540GWh from pumped-storage plants and 1,840GWh from battery energy storage services. As of June 2025, India’s energy storage capacity stood at 490 MWh.
Efficiency matters more in stationary batteries than in electric vehicle (EV) applications because it determines how much of the stored energy can actually be used, according to Vikram Handa, managing director of Epsilon Advanced Materials, which makes battery parts such as anodes and cathodes.
“Higher efficiency means more renewable power for solar or wind that reaches the grid, improving project viability and lowering electricity costs," said Handa. “For India to achieve these higher efficiency standards, battery manufacturers will need to work on material-level innovations with advanced anode and cathode chemistries, electrolytes, and tighter manufacturing controls for building strong capabilities."
According to Debmalya Sen, president, India Energy Storage Alliance (IESA), continuous innovation in the sector has increased battery life from 3,500 charge-discharge cycles a few years ago to 15,000 cycles.
"In case a PPA (power purchase agreement) is signed for 10 years, then as per the current global life cycle standards, there would be no requirement to replace the battery to cater for the 10-year period," Sen said. He also said that 85% charging efficiency is considered highly efficient.
According to industry experts, higher efficiency and life cyle will not necessarily increase project costs.
“Introducing charging efficiency criteria will likely increase short-term compliance costs for developers and manufacturers, though long-term savings from operational efficiencies could offset them," said Alekhya Datta, director, electricity and renewables division, The Energy and Resources Institute (Teri).
Industry may also shift towards lithium battery chemistries over other options, such as lead-acid batteries, which have lower round-trip efficiency, he said.
Simultaneously, the government is also preparing a roadmap to meet a projected cumulative battery energy storage capacity of nearly 3 terawatt-hours (TWh) by 2047 across electric mobility, power, and electronic components, Mint reported on 27 November.
These developments come as the ambitious PLI for advanced chemistry cells used in batteries failed to gain momentum as initially anticipated. The government is considering extensions and easier localization norms for the beneficiaries of the ₹18,100-crore PLI-ACC scheme that was announced in 2021, Mint reported earlier.
Out of the 50GW capacity initially planned under the scheme, Reliance Industries Ltd, Ola Electric Ltd and Rajesh Exports Ltd have been allocated a total of 40GW, which is meant for electric vehicles. The government later decided to allot the remaining 10GW capacity for utility-scale projects.
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