New Delhi, Dec 19 (IANS) India’s energy storage capacity is expected to shoot up 12-fold to around 60 GW by 2031-32 which would play a key role in stabilising the power grid as the country transitions to renewable energy, according to an SBI Research report.
The country’s energy storage landscape is evolving rapidly, with the proportion of renewable energy (RE) projects incorporating storage solutions recording a significant increase from 5 per cent in FY20 to 23 per cent in FY24, the report said.
This will surpass the growth anticipated for renewable energy sources themselves.
The share of variable renewable energy (VRE) in power generation is expected to triple by 2031-32 which could destabilise the grid. The challenge lies in the inherent mismatch between the generation of VRE and peak power demand. This mismatch often leads to grid instability, surplus energy during peak production hours, and continued reliance on fossil fuels during non-solar periods.
The integration of Energy Storage Systems (ESS), is crucial in managing this transition and ensuring stability. ESS provides a solution by storing excess renewable energy during high production times and releasing it when demand peaks.
Battery Energy Storage Systems (BESS) and Pumped Storage Projects (PSP) are expected to dominate the energy storage market, with BESS, in particular, emerging as the dominant technology due to its locational flexibility, rapid response time, and improvements in technology that are further reducing costs, the report points out.
While PSPs are facing challenges such as long development periods and the risk of stranded assets, their low operational costs and ability to generate reactive power make them an important tool for grid stability.
The funding potential for the BESS ecosystem is significant, with a projected ₹3.5 lakh crore opportunity until FY32, fuelled by a combination of project-level investments and upstream manufacturing growth, the report said.
Pumped Storage Projects (PSPs), though facing a slower growth trajectory due to their long gestation periods, are still expected to contribute Rs. 1.2 lakh crore in investment by FY32, it added.
This will help India reduce its dependence on imports and strengthen its battery ecosystem. Major players are already investing heavily in battery manufacturing and component production, with approximately 120 GWh of cell capacities announced, though more investment will be required to meet projected demand, the SBI report highlighted.
Currently, around 80 per cent of BESS costs are attributed to battery cells and related components, with most of these sourced from China.
–IANS
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