India’s Renewable Energy Storage to Grow 6 Times by 2028, Says Crisil Ratings

New Delhi [India], August 15: India’s renewable energy storage capacity is expected to surge to 6 GW by fiscal 2028 from less than 1 GW operational as of March 2024, driven by a robust pipeline of projects under implementation, said Crisil Ratings.

Such an increase is crucial to sustainably absorb the rising share of renewable energy in the country’s overall power generation mix. Despite slow progress on project implementation, the government’s push to develop renewable energy power and tariffs for round-the-clock renewable energy, discovered in the last two fiscals, being comparable with other sources of round-the-clock power — improves confidence around adoption, said the rating agency.

Storage is becoming crucial with the rising share of green energy — both solar and wind — in the overall power generation mix. This is because green energy generation by nature is concentrated, happening at specific times in a day. For instance, solar generation happens largely during the 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, Crisil said.

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 green energy generation with storage. The auctions of such storage 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, resulting in a healthy pipeline of 6 GW of storage as of May 2024.

Manish Gupta, Senior Director, CRISIL Ratings, said, “However, progress on implementation has been tardy. Slow adoption by state distribution companies (discoms) has been a key deterrent to implementation — 60-65 per cent of such projects had not got their power purchase agreements (PPAs) executed until May 2024.”

At COP26 held in 2021, India committed to an ambitious five-part “Panchamrit” pledge. They included reaching 500 GW of non-fossil electricity capacity, generating half of all energy requirements from renewables, to reducing emissions by 1 billion tonnes by 2030. India as a whole also aims to reduce the emissions intensity of GDP by 45 per cent. Finally, India commits to net-zero emissions by 2070.

About 44 per cent of India’s energy requirements at present come from non-fossil sources and are likely to touch as high as 65 per cent by 2030, much higher than what the country pledged at the COP summit in 2021. India’s ambitious target of reaching 500 GW by 2030 and net zero by 2070 would require green transition in the way its people live and in the way they do business.