India’s commitment to a sustainable energy future is evident through its multifaceted approach to ba…

In the past decade, India has made monumental strides to grow its renewable energy (RE) capacity, making it one of the world’s fastest-growing RE markets. Today, globally, India ranks fourth in overall renewable energy (RE) capacity, with 82 GW solar power capacity. It is also the second largest renewables growth market in Asia. Testament to its growth, the country added its highest-ever annual renewable energy capacity, i.e. 18.5 GW, to the grid in the first quarter of 2024. This growth was spurred by the solar power segment, which accounted for 81 percent of the addition.
 
While India’s renewables growth story aligns with its ambitions, the energy generation from renewable sources is yet to see an equivalent growth due to the variability of renewable energy, and the intermittency challenges associated with solar power. However, this is likely to change in the coming years.
 
Last year, the Indian government released a plan to boost energy storage utilization, with the goal of supporting dispatchable renewable energy, ensuring grid reliability, and fostering economic growth. The plan encompasses changing electricity market configurations to encourage the involvement of energy storage systems (ESS), create market structures to facilitate this involvement, and allow ESS to provide services that help balance the power grid. The National Electricity Plan (NEP) 2023 sees more than half of its ESS capacity requirement contributed by battery storage, and the rest contributed by pumped hydro storage.
 
Lower Levelised Cost of Storage – The Driving Force Behind Rising Battery Energy Storage Demand
 
Pumped hydroelectric storage (PHS) has served as an ancillary and reserve power source within India’s electricity network for many years. Yet, recent times have witnessed an increase in the deployment of battery energy storage systems (BESS), propelled by rapid advancements in battery technology leading to greater levelised cost of storage (LCoS).
 
The global industry is trending towards Lithium Iron Phosphate (LFP) batteries due to their higher energy density, longer lifespan, and lower costs compared to other lithium-ion batteries. Major technology trends in LFP batteries include ever larger prismatic cells for energy storage coming to market, allowing for more energy storage capacity per unit. Containers of the same size (20 feet) can achieve 5 MWh capacity and higher by using 300 Ah or larger cells, a 34 percent increase from 3.72 MWh previously using cells around 280 Ah. System integration efficiency can improve with larger cells, as fewer connectors are needed, and more capacity per rack and container can be achieved. As a result, the average battery costs have dropped from USD 1,400/kWh in 2010 to under USD 140/kWh in 2023, making it one of the fastest cost declines for energy technology.
 
Overall, the levelised cost of energy storage is now INR 6-7 per kWh – a sharp decline from INR 8-9 per kWh in 2022. A report by the International Energy Agency (IEA) underscores a strong growth in the utility-scale battery storage market, with solar PV modules and battery storage becoming the backbone of the country’s power grid by 2050.
 
 
 
Innovations and Trends Shaping Global Market Expansion for BESS 
 
Predictions for the market remain bullish, with BloombergNEF reporting that BESS was the most invested-in of all commercially available energy sector technologies in 2023.
 
At the forefront, lithium-ion batteries continue to dominate due to their improving energy density, longevity, and decreasing cost profile. However, the mid-term horizon looks bright with the emergence of new alternatives such as solid-state batteries, flow batteries, and other advanced chemistries, offering enhanced safety, scalability, and environmental sustainability.
 
These technological advancements are not just expanding the market’s capacity but are also driving significant improvements in system efficiencies and cost-effectiveness. Innovations in battery energy management systems, enhanced manufacturing processes, and materials science are contributing to more reliable and durable energy storage solutions. As these technologies mature, they promise to lower the barriers to entry, making energy storage more accessible and affordable for a broader range of applications and markets, thereby accelerating the global transition towards a more sustainable and resilient energy ecosystem.
 
Opportunities in India
 
A BESS can assist grid-tied and hybrid solar system with energy time-shift and demand-side management. Discoms in India are faced with increasing power demands, especially at certain times of the day or year. For instance, the peak demand in India was recorded 250 GW this summer due to weather-related loads and growing industrial and residential consumption. This peak demand surpassed the previous high of 243 GW last year and is expected to rise in subsequent years. This pressurizes the discoms as additional power needs to be purchased at higher rates to meet the demand.
 
A battery storage system, in geographies like India with extreme weather conditions, can provide grid-balancing services. The energy generated throughout the off-peak times can be stored and then discharged during peak times, thus aiding in both peak shaving (supplying stored energy at peak periods) and load shifting (by charging at off-peak periods). This way power can be supplied to the consumer when the electricity demand is high without the discoms having to stretch their pockets.
 
Such solutions are already being implemented in various parts of India such as Karnataka and Gujarat, and have played a critical role in stabilizing the grid, providing power backup and optimizing the use of renewable energy sources.
 
At present, to support the country’s energy target by 2030 and simultaneously, balance the grid with the rising penetration of renewables in the energy mix, India requires an advanced battery storage ecosystem with over 238 GWh of capacity.
 
However, the viability of the energy storage system ecosystem remains pegged to the capital cost of the BESS. As compared to the conventional sources of energy, solar PV when integrated with battery storage is a cost-competitive option. This trend is expected to continue in India.
 
India’s commitment to a sustainable energy future is evident through its multifaceted approach to battery energy storage. The government has mandated that solar PV projects must incorporate at least 5 percent of their installed capacity with storage.
 
To further catalyze the transition, they have undertaken forward-looking initiatives including the ‘National Framework for Promoting Energy Storage Systems’ and Scheme for Viability Gap Funding (VGF), covering up to 40 percent of the capital cost for the development of 4,000 MWh of BESS by 2030-31. India has also recently become a member of the Battery Energy Storage System (BESS) Consortium, committing to securing 5 GW of BESS commitments by the conclusion of 2024. Such strategic efforts can position BESS as the backbone of India’s renewable energy sector.
 
If India continues to make strides in the energy storage sector, the implementation of 4,000 MWh capacity of BESS will result in 4,000 MWh of available energy during peak hours. This will, subsequently, result in an annual reduction of approximately 1.3 million tonnes (MT) of carbon emissions considering the charging of BESS with RE. Continuous development of technology, supported by a favorable policy and regulatory framework, financial support, and personnel training will ensure India emerges as a leader in BESS solutions globally by 2030.
 

– Leo Zhao, Head of Energy Storage, Trinasolar Asia Pacific