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India’s Energy Storage Imperative
India requires $50 billion new investment in storage by 2032
Context: As India accelerates its transition to clean energy, the need for robust energy storage infrastructure has become mission-critical. With a projected requirement of $50 billion in new investments by 2032, storage systems are no longer optional—they’re the backbone of a reliable, flexible, and sustainable power grid.
What is the significance of storage infrastructure in renewable energy production?
Renewable energy sources like solar and wind are intermittent—they don’t produce power consistently throughout the day or year. Storage infrastructure solves this by:
- Grid Stability & Reliability: Stores excess energy during peak generation (e.g., sunny afternoons) and releases it during peak demand (e.g., evenings). Prevents grid overloads and blackouts by balancing supply and demand.
- Energy Shifting & Optimisation: Enables time-shifting of energy use, allowing consumers to tap into stored power during high-tariff hours. Supports ancillary services like frequency regulation and voltage control.
- Decarbonisation & Energy Independence: Reduces reliance on fossil fuel-based backup systems. Facilitates deeper integration of renewables into the grid, helping meet India’s net-zero goals by 2070.
- EV & Distributed Energy Support: Power electric vehicle (EV) charging infrastructure. Enables rooftop solar users to store and use their own energy, reducing grid dependency.
What are the current challenges of storage infrastructure in renewable energy production?
Despite its promise, India’s storage ecosystem faces several hurdles:
- High Capital Costs: Battery Energy Storage Systems (BESS) and Pumped Storage Plants (PSPs) require large upfront investments. Financing remains limited, especially for decentralised and rural projects.
- Limited Deployment: India currently has only 6 GW of storage, mostly pumped hydro—far below the 97 GW needed by 2032.
- Manufacturing Bottlenecks: Domestic battery production is still nascent; lithium-ion supply chains are import-dependent. Challenges include lack of raw materials, recycling infrastructure, and skilled workforce.
- Policy and Regulatory Gaps: Absence of clear market rules for revenue stacking (earning from multiple services like peak shaving, grid support). No mandatory storage obligations for discoms until recently.
- Grid Integration Complexity: Storage must be co-located with renewables and load centres to be effective. Grid upgrades are needed to handle bi-directional power flows and digital controls.
How can storage infrastructure be augmented in India?
- Policy & Regulatory Measures: Energy Storage Obligations (ESO) mandate discoms to scale storage procurement from 1% to 4% by 2030, while technology-agnostic bidding ensures competitive selection across storage options. A revenue stacking framework allows providers to monetise multiple grid services, enhancing viability.
- Financial Incentives: The PLI Scheme boosts domestic battery manufacturing, while Viability Gap Funding (VGF) helps bridge cost gaps for early-stage clean energy projects, accelerating India’s energy transition.
- Green Bonds & Climate Finance: Mobilise private capital and international funding.
- Manufacturing & Supply Chain Development: Expand battery manufacturing capacity to 200+ GWh by 2030. Invest in critical mineral sourcing, recycling infrastructure, and R&D for next-gen technologies like flow batteries.
- Innovation & Decentralisation: Promote distributed storage (e.g., rooftop solar + batteries) for rural and urban resilience. Support smart grid technologies and AI-based demand forecasting.
- Infrastructure Planning: Align storage deployment with solar-rich states and load centres like Gujarat, Rajasthan, Maharashtra, and Telangana. Accelerate pumped hydro projects with streamlined approvals and private sector participation.
