Solar power generated during the day cannot - without storage or other balancing resources - fully address evening peak demand. Consequently, even as generation capacity expands, pressure on the grid can persist.

Battery Energy Storage Systems (BESS) are emerging as critical infrastructure to bridge this gap.

The scale of the opportunity is reflected in the Central Electricity Authority’s (CEA) National Generation Adequacy Plan. According to an Indian Infrastructure Research report, India could require 174 GW of total energy storage capacity by FY2035-36, including approximately 80 GW of battery storage.

Gujarat too is preparing to enter this next phase of the energy transition. The state government is expected to announce a dedicated BESS policy shortly.

However, converting demand into commercially viable projects remains the central challenge. Tender design, investment, battery costs, and grid integration will determine whether BESS becomes a game-changer for India’s electricity sector.

Gujarat Preparing For Transition

A senior official in Gujarat’s Energy Department told The Secretariat, “The state government has prepared a draft Battery Energy Storage Policy, taking into account India’s projected requirement of approximately 208.25 GWh of battery storage by 2030.” 

The proposed policy targets more than 2,000 MW of storage capacity by 2027. In line with this objective, the tendering process for storage capacity exceeding 1,000 MW has been initiated.

Gujarat’s Integrated Renewable Energy Policy, announced last year, already provides for battery storage incentives. Tariffs for storage projects, grid connectivity, scheduling, incentives, and participation in electricity markets are to be governed by applicable Gujarat Electricity Regulatory Commission (GERC) orders and government policies.

The transition is not merely about installing batteries; it is about reshaping the economics of electricity. Solar and wind determine when renewable power is generated, while storage helps determine when that electricity can be used.

IndiGrid’s 360 MWh battery storage project in Gujarat and Adani Green Energy’s reported 3.37 GWh storage capacity at Khavda illustrate the scale of the emerging opportunity. The next phase of the competition will be about delivering electricity at the right time, not simply generating it at the lowest cost.

Execution Risks For BESS

Across India, the gap between announcing projects and bringing them into commercial operation is emerging as a significant concern.

Analyses by CRISIL Ratings, IEEFA, ICRA, and JMK Research have highlighted aggressive tariff bidding, battery cost volatility, financing constraints, and implementation delays as key challenges facing the sector.

Gujarat currently has approximately 162 MW of storage capacity, according to the information provided by the official.

The proposed policy is expected to incorporate technical, safety, cybersecurity and environmental standards. It is also expected to provide incentives and tax concessions to attract investment in battery manufacturing and associated industries.

The state plans to announce the policy shortly, allowing investors to explore opportunities ahead of the next Vibrant Gujarat Summit. The policy’s proposed incentives and targets will be significant, but the implementation framework will be equally important.

The terms governing procurement, project bankability, revenue streams, and grid access will determine how quickly the announced pipeline translates into operating assets.

GERC’s Regulatory Framework

On 12 May 2026, the Gujarat Electricity Regulatory Commission (GERC) issued draft regulations titled Grid Interactive Battery Energy Storage System Regulations, 2026. 

The draft proposes a dedicated regulatory framework for BESS planning, installation, storage, and discharge of electricity, private sector participation, competitive procurement, registration with the Gujarat Energy Development Agency (GEDA), safety, cybersecurity, grid operations, and revenue mechanisms.

It also envisages recognition of standalone BESS projects and storage systems integrated with generation, transmission, and distribution infrastructure. The proposed regulations are intended to establish a clearer framework for participation in Gujarat’s electricity market.

CEA’s New BESS Rules

The Central Electricity Authority (CEA) has proposed measures to strengthen grid stability and integrate battery storage with renewable energy projects through the draft Technical Standards for Construction of Electric Plants and Electric Lines (Second Amendment) Regulations, 2026, published on 3 September 2026. 

The draft focuses on grid-forming capabilities and storage requirements for solar and wind projects.