India’s New Battery Rule Twist: Why Efficiency May Decide Big Projects

According to two officials privy to the ongoing talks, India may soon set standards for battery efficiency and lifespan as part of a proposed incentive scheme to support 10-gigawatt-hour utility-scale energy storage.

The people aware of the negotiations informed that the new and renewable energy ministry has been considering the proposal that the manufacturers trip the incentive criteria should prove the minimum round-trip efficiency and longer functional lifetimes. The conditions so defined would benefit the national grid as renewable energy sources are further integrated.

One of the speakers pointed out that the efficiency index would guarantee that a significantly larger amount of electricity stored is returned to the grid. Another speaker, however, stated that the battery's operational life, expressed as the number of cycles, is now being considered as a mandatory standard for evaluation.

At present, the suggestions are still subjected to a major internal review. The ministry responsible for heavy industries will pass the final judgment before the issuing of the tenders. Email messages directed to both ministries seeking clarification remained unacknowledged.

The previous 40 GWh capacity awarded under the PLI-ACC program did not impose such efficiency and lifecycle requirements. This program is managed by the four ministries of heavy industries, power, renewable energy, and communications together.

Grid energy storage projects demand a lot of money upfront and usually rely on long-term power purchase agreements between the power distributor and the developer. Higher efficiency leads to a decrease in waste and also the project becomes economically viable.

India's internal projections indicate a massive storage requirement ranging from 2.3 TWh to over 540 GWh from pumped hydropower in the long run and around 1,840 GWh from battery storage systems. At the end of June 2025, the total installed storage capacity in India was only 490 MWh, which is very far from the long-term requirements.

The people in the industry believe that efficiency in energy storage is more important than mobility because the integration of renewable energy sources highly depends on how much energy stored can be gone back to the network.

It is expected that battery manufacturers will shift to better anode and cathode materials, improved electrolytes, and tighter production standards to achieve the target of high efficiency. The battery cycle life has already become significantly longer in the past few years, increasing from around 3,500 cycles to almost 15,000 cycles, as reported by industry associations.

Longer lifetimes are very important for developers who are entering into 10-year contracts for supply. The existing global standards allow for the usage of batteries during such periods even without replacement.

Researchers predict that enforcing a mandatory efficiency filter could initially lead to higher costs for the compliance. Operating savings during the entire life of the project, however, are likely to equal out the extra costs. Moreover, developers might become even more inclined to use lithium-based technologies, which generally offer better round-trip efficiency compared to lead-acid batteries.

The Indian central government is also working on a comprehensive project that will cover not just grid-level but also electric mobility and consumer electronics storage, leading to a presumable storage of 3 terawatt-hours by 2047.

The PLI scheme for advanced chemistry cells, however, is taking a longer way than expected. The deadlines and localization norms are now being reviewed for the applicants forming a part of the ₹18,100-crore plan that was announced in 2021.

Reliance Industries, Ola Electric, and Rajesh Exports combinedly won the total of 40 GW out of the original 50 GW target, which was mainly for electric vehicles. The later 10 GW was allocated for utility-scale storage — the segment where new efficiency and lifecycle rules are expected.