In line with India’s National Electricity Plan, the country is set to require 74 GW/411 GWh of energy storage capacity by 2032. The Indian government has unveiled a comprehensive framework aimed at fostering the utilization of energy storage solutions. The primary objectives are to bolster the dispatchability of renewable energy sources, fortify the grid’s reliability, and spur economic growth. Key targets encompass the provision of round-the-clock dispatchable or Real-Time Control (RTC) renewable energy, substantial reductions in greenhouse gas emissions, and the curbing of energy expenditure.
India is in the midst of a sweeping transformation of its electricity sector, geared toward incentivizing the active participation of Energy Storage Systems (ESS) within the market. This entails the establishment of market mechanisms and allow ESS to provide grid-balancing ancillary services. Simultaneously, the government envisions leveraging energy storage as a catalyst for extending electrification and achieving energy self-reliance in remote and island communities. Through these initiatives, the government aspires to position energy storage as a driving force behind the growth of the industry and the overall economy.
India’s projected demand for energy storage is on a steep upward trajectory.
A closer look at the current energy storage requirements suggests that the country is poised to require a significantly larger energy storage capacity to attain its objectives. It’s becoming evident that the actual energy storage capacity needed will far exceed the previous projections. Previously, India’s Central Electricity Authority (CEA) had modeled its energy storage demand at approximately 28 GW/108 GWh by 2030, aiming to meet a formidable 500 GW target, which encompasses a substantial 450 GW from wind and solar photovoltaic sources. It’s worth noting that this figure represents a more cautious estimate compared to the more optimistic projection of 160 GWh+ forecasted by IESA (Indian Energy Storage Alliance).
According to IESA’s outlook, India’s domestic battery capacity is poised to surpass 150 GWh by 2030. The Advanced Chemistry Cell Production Linked Incentive (ACC PLI) initiative is playing a pivotal role in setting an ambitious energy storage target of adding 50 GWh.
Furthermore, the Ministry of New and Renewable Energy (MNRE) is actively contemplating an additional PLI allocation in the range of 25 to 50 GWh during the latter half of 2023. This move is intended to provide robust support for the advancement of energy storage technologies in India.
The National Electricity Plan (NEP) for 2023, as unveiled by the Central Electricity Authority (CEA), presents a comprehensive projection of India’s energy storage needs in the coming years. This projection encompasses both battery storage and Pumped Hydroelectric Storage (PHES). It;s evident that there has been a gradual increase in India's demand for energy storage over the past 3 to 5 years, as highlighted in the NEP.
Starting from 2026-2027, CEA’s estimated statistics are as follows:
CEA envisions a substantial demand for Battery Energy Storage Systems (BESS) totaling 230 GW/1,840 GWh by the year 2047.
Energy storage is set to emerge as a formidable asset within the local grid infrastructure.
India, currently the world's third-largest producer and consumer of electricity, reached a total installed capacity of 410.339 million KW by the close of 2022. Impressively, renewable energy sources accounted for 40.7% of this capacity.
However, as of now, only economically prosperous regions can assure uninterrupted 24-hour power supply, leaving a considerable power deficit in the southern, north-eastern, and northern areas. Additionally, many high-investment industrial parks are planning to establish their own power generation facilities. In this context, energy storage will play a pivotal role in fortifying the grid system, providing a reliable foundation for power supply.
Furthermore, India’s strategic geographical location at the heart of South Asia has facilitated the establishment of cross-border transmission connections with the majority of its neighboring nations. The combined power transmission capacity with these neighboring countries currently stands at approximately 4.23 million kW. India also has ambitious plans to augment this capacity by an additional 4.02 million kW in the near future, resulting in a total transmission capacity of approximately 8.25 million kW.
The proportion of power generation installed capacity in India for the year 2022 (%):
In 2022, India intensified its efforts to reform the power sector, embarking on a path towards universal network access. This included opening up the three-tier reserve ancillary services market and introducing a fresh mechanism to address deviation costs. Furthermore, there was a resolute commitment to renewable energy, with the aim of it constituting 90% of all new production capacity throughout the year. In January 2023, the government took a significant step by endorsing the National Green Hydrogen Mission, allocating a substantial $2.4 billion investment to foster the development of green hydrogen.
Amidst the backdrop of robust economic growth, there is a clear trajectory of increasing local electricity demand. While the transition to new energy sources is progressing at a gradual pace, the push for carbon neutrality at the regional level is driving the inevitable phasing out of traditional thermal power generation. Additionally, the regional disparity between electricity consumption and generation underscores the pressing need for energy storage to facilitate efficient power dispatch and mitigate grid fluctuations.