The energy storage sector in India is set to see significant growth in the coming years, with a projected 12-fold increase in capacity to 60 GW by 2031-32. This growth is being driven by various government initiatives and increased demand for energy storage solutions. The decreasing cost of energy storage technologies is also playing a key role in driving their widespread adoption. The current mismatch between surplus capacity and power demand profiles is leading to grid instability, making energy storage systems a necessity.
According to a report by SBI Capital Markets, Battery Energy Storage Systems (BESS) and Pumped Storage Projects (PSP) are expected to emerge as the dominant technologies in the energy storage sector. BESS offers advantages such as locational flexibility, technological improvements, improving discharge characteristics, and rapid response time. These factors are expected to contribute to the widespread adoption of BESS in India.
The report highlights that batteries and associated components make up about 80 per cent of the cost of a battery energy storage system. Currently, India is heavily reliant on imports from China for battery cells and their upstream ecosystem, making the country vulnerable to geopolitical complexities. The government has recognized the need for indigenization and has introduced a production-linked incentive for advanced cell chemistry to boost local production.
India has set ambitious targets for increasing its non-fossil electricity capacity to 500 GW by 2030 and generating half of all energy requirements from renewable sources. Green energy, including green hydrogen, is seen as a key avenue to reduce the country’s dependence on conventional sources of power. The focus on green energy for climate mitigation is not just limited to India but is a global trend that has gained momentum in recent years.
Overall, the energy storage sector in India is poised for significant growth, driven by government initiatives, increased demand, and decreasing costs of energy storage technologies. BESS and PSP are expected to emerge as the dominant technologies in the sector, with BESS being the preferred choice due to its advantages such as locational flexibility, technological improvements, and rapid response time. With a focus on indigenization and green energy, India is set to make significant strides in reducing its reliance on fossil fuels and transitioning towards a more sustainable energy future.
