The Indian government has issued a framework to promote the use of energy storage with the aim of achieving dispatchable renewable energy, a more reliable grid and economic development.
The Ministry of Power issued new guidelines late last month with clear objectives including having 24/7 dispatchable or ’round-the-clock’ (‘RTC’) renewable energy, reducing greenhouse gas (GHG) emissions, and lowering the cost of generating energy.
It also aims to bring about a shift in electricity market design to incentivize the participation of energy storage systems (“ESS”), establish market mechanisms for participation, and allow ESS to provide grid-balancing ancillary services.
The government also wants to see energy storage become a means of bringing electrification and energy independence to remote or island communities, and to promote energy storage as an industry and economic driver.
The guidelines also have technical objectives, such as facilitating the development of technical standards for performance and safety, as well as other social objectives, such as promoting equitable access to energy storage for all.
The Indian government, which recently surpassed China as the world’s most populous country and has ambitions to deploy 500GW of non-fossil fuel energy by 2030, has long talked about its awareness of the critical role energy storage can play in achieving this goal.
Recently, India has launched energy storage tenders, either independently or through state-owned entities such as the Solar Energy Corporation of India (SECI) mixed with power generation, but this new document appears to be a step toward creating a market with less demand. Actual intervention from public funds.
India expects a significant increase in energy storage demand
The amount of energy storage needed to achieve these goals in India could be much higher than previously predicted and implied.
Previously, the country’s Central Electricity Authority (CEA) projected that about 28GW/108GWh of storage would be needed to support a 500GW target by 2030, including 450GW of wind and solar PV.
This is a more conservative estimate than the “160GWh or more” demand analyzed by trade group India Energy Storage Alliance (IESA).
It is also much more conservative than the 182.9GWh demand by 2030 estimated by Niti Aayog, the government’s innovation think tank.
However, the latest CEA model cited by the Ministry of Power in its framework document will overturn all three previous projections.
The agency’s forthcoming National Electricity Plan (NEP) 2023 estimates India’s energy storage needs for the next few years. It includes battery storage and also pumped hydro energy storage (PHES), a technology that has seen a major resurgence in India over the past 3-5 years.
| Years | Battery storage output（GW） | Battery Storage Capacity（GWh） | Pumped storage capacity（GW） | Pumped storage capacity（GWh） | total production（GW） | total capacity（Gwh） |
| 2026-2027 | 8.68 | 34.72 | 7.45 | 47.6 | 16.13 | 82.32 |
| 2029-2030 | 41.65 | 208.25 | 18.98 | 128.15 | 60.63 | 336.4 |
| 2031-2032 | 47.24 | 236.22 | 26.69 | 175.18 | 73.93 | 411.4 |
This equates to a cost of around IRR75.2 billion (US$910 million) for pumped storage power generation over the period 2027-2032, and around IRR2,926 billion (US$35.2 billion).CEA estimates that by 2047, India could require 320GW/2,380GWh of energy storage, 230GW/1,840GWh of battery energy storage system ( BESS) assets and 90GW/540GWh of pumped storage facilities.
Stand-alone ESS participation as a ‘business unit’
The guidance then covers the different range of services and applications that energy storage can provide, including storage paired with generation or transmission and distribution (T&D) infrastructure, as well as stand-alone ESSs that can operate as “capable commercial units” trading energy or capacity in electricity markets in accordance with existing rules and regulations. “.
As noted above, the government is already working to establish an energy storage industry ecosystem and storage opportunities, and the guidelines review many of these efforts and provide further details on how they work or are expected to work.
These include the proposed Viability Gap Funding (VGF) for specific projects, the addition of an energy storage obligation in the 2022 Renewable Energy Purchase Program, rules for replacement of diesel generators, previous and ongoing tenders, previously released guidance on pumped storage development, and other initiatives and programs.
