India Shows Urgency For Energy Storage Systems By Already Awarding More Than 8GW Of Tenders

Examining India’s burgeoning ESS sector in depth, the report finds it poised to boom in the coming years, in line with the exponential growth of the renewable energy sector.

Battery-based ESS (BESS) and pumped hydro storage (PHS) are the most widespread and commercially viable means for implementing energy storage solutions in India, with green hydrogen expected to gain a greater share of the renewable energy mix in coming years.

The Central Electricity Authority estimates India will need about 42GW of BESS and 19GW of pumped hydro storage (PHS) capacity by 2030.

Large, grid-scale ESS projects will be crucial in meeting these future energy needs. To this end, the latest demand-driven Firm and Dispatchable Renewable Energy (FDRE) tenders offer the ideal model for India.

FDRE is the latest, most advanced iteration of tender models, such as round-the-clock (RTC), Solar + BESS and standalone ESS, whose tariffs are already comparable to, if not lower than, traditional fossil fuel-based power generation.

With longer tenures of up to 25 years, as grid-scale FDRE storage projects mature, their tariffs will likely become even more attractive.

Policy measures like the energy storage obligation (ESO) targets are also helping create a conducive environment for ESS projects.

However, obstacles to the expansion of ESS remain, such as high initial capital expenditure, longer gestation periods (especially for PHS projects), suboptimal infrastructure and a dearth of domestic manufacturing, highlighting potential supply chain risks.