Speaking at the 21st edition of the Global MSME Business Summit organized by the Confederation of Indian Industry (CII), MNRE Secretary Prashant Kumar Singh said that the government is planning to introduce an initial requirement of 10% of a renewable energy plant’s capacity for storage, which may be increased over time.
The move is aimed at addressing the intermittency of the rapidly growing share of renewable energy in India’s electricity mix and ensuring an around-the-clock power supply.
According to Singh, recent tenders in India combining solar, wind and battery storage have shown competitive rates, outperforming coal-fired power plants.
“Now, with falling battery storage prices, it makes sense to move ahead and not to have any standalone solar or wind plants… depending on price trends, the mandate can go up to 30-40%,” said Singh, as reported by local media.
The move would mirror the developments in China. Since 2022, many provinces have introduced policies requiring renewable energy projects to include energy storage systems as prerequisites for project approval and grid connection. With the growing share of renewables a growing challenge to the grid, more than 20 provincial governments have already upped their mandatory ratios for energy storage projects to 20%, up from 10% a couple of years ago.
These requirements have helped mitigate renewables curtailment in China. However, they have also increased operational costs for renewable energy projects, and many project owners have reported low utilization rates of their storage systems.
In contrast to China’s massive battery storage fleet, India’s market is still at a fledging stage. At the end of March 2024, India’s installed battery storage capacity reached 111.7 MW/219.1 MWh. A Mercom report issued in July predicted that the nation would add 1.6 GWh of standalone battery storage and 9.7 GW of renewable projects with storage by 2027.
The Indian government has already enacted several policies to accelerate the adoption and development of battery storage, with one of the most critical ones being the Viability Gap Fund scheme announced in 2023. The scheme envisages the development of 4 GWh of battery storage projects by 2030-31, offering financial support of up to 40% of the project’s capital cost.
