India’s renewable energy (RE) storage capacity is expected to surge 6 GW by fiscal 2028 from less than 1 GW operational as of March 2024, driven by a robust pipeline of projects under implementation and expected healthy pace of auctions. Such an increase is crucial to sustainably absorb the rising share of RE in the country’s overall power generation mix.
Despite slow progress on project implementation, the government’s push to develop RE power and tariffs for round-the-clock renewable energy, discovered in last two fiscals, being comparable with other sources of round the clock power — improves confidence around adoption.
Storage is becoming crucial with the rising share of RE — both solar and wind — in the overall power generation mix. This is because RE generation by nature is concentrated, happening at specific times in a day. For instance, solar generation happens largely during daytime. Such a generation profile does not match with demand that typically peaks in the morning and evening.
Hence, to manage absorption of such a profile of generation, surplus generation must be stored and discharged at the time of requirement to keep the grid balanced.
To address this issue, the government is working on developing the infrastructure needed through standalone storage systems (such as pumped hydro or battery storage systems) and storage-linked projects that combine RE generation with storage.
The auctions of such projects have been ramped up. About 3 GW of standalone storage and ~10 GW of storage-linked projects with ~2 GW of storage were auctioned in the past two fiscals (vs less than 1 GW previously), resulting in a healthy pipeline of ~6 GW of storage as of May 2024.
Development of at least this much storage capacity would be required to sustainably increase the proportion of RE power to 20-22%3 in the overall power generation, as per government estimates.
Says Manish Gupta, Senior Director, CRISIL Ratings, “However, progress on implementation has been tardy. Slow adoption by state distribution companies (discoms) has been a key deterrent to implementation — 60-65% of such projects had not got their power purchase agreements (PPAs) executed until May 2024.”
