Reliance Industries (RIL), Waaree, and Premier Energies are leading the way as they are ready to commission large-scale capabilities, according to domestic brokerage Nuvama Institutional Equities (Nuvama), which sees a multidecade potential developing in India’s Battery Energy Storage Systems (BESS) sector.
India’s BESS Boom Ahead
With projected capacities of 100GWh, 20GWh, and 12GWh, respectively, these businesses will profit from what Nuvama refers to as an impending J-curve demand breakout, confirming its “Buy” recommendation for the topic.
In its New Energy/ESG Series, the brokerage recently welcomed CEEW specialists Arushi Relan and Shruti Gauba to discuss how storage would help India achieve energy resilience.
Their main argument was that India’s BESS narrative is about to change. The installed BESS capacity, which is now just 0.5GWh, is expected to grow to 236GWh by 2032 at a scorching 141% CAGR and 1,840GWh by 2047, indicating a 45% CAGR over the next 22 years.
Structural Drivers Fuel Growth
According to Jal Irani, Tanay Kotecha, and Akshay Mane of Nuvama, a combination of structural factors is responsible for this spike. The cost of battery packs has already decreased by 84% over the last ten years, and by 2030, costs are predicted to drop by an additional one-third, making them more affordable for grid-scale, renewable integration, and commercial and industrial (C&I) applications.
Adoption is anticipated to be accelerated by growing demand for 24-hour clean electricity, the need to stabilize a grid that is becoming more and more reliant on renewable energy, and the financial benefit of BESS versus peakers based on fossil fuels. According to Nuvama, it takes around ₹1,000 crore in capital expenditures to put up 1GWh of BESS, with execution delays of six to twelve months and an asset life of about sixteen years.
India Eyes Storage Independence
However, the brokerage identifies reliance on raw materials as a strategic constraint. Due to their dependence on precious metals, cathodes continue to be the most expensive component, making vertical integration crucial for cost management.
China’s overwhelming dominance, which accounts for more than 75% of worldwide battery and component production and exports more than $60 billion worth of Li-ion batteries yearly, exacerbates this problem. The necessity for local capacity is further highlighted by worries about cybersecurity, dumping hazards, and supply concentration.
Analysts claim that changes in technology provide a possible opportunity. Although Li-ion currently holds around 98% of the BESS market, other chemistries like sodium-ion are gaining traction since they are safer and more cost-effective. India may take advantage of the “China +1” shift by concentrating on value-chain areas where competitiveness can be attained more quickly, backed by focused R&D, regulatory changes, and funding for cell manufacture, given its limited lithium supplies.
However, Nuvama thinks that India’s energy storage cycle is about to undergo its steepest growth phase to yet, and the firms who scale capacity early stand to benefit the most.
