State-level efforts will be crucial for India to make rapid progress in the uptake of utility-scale battery storage. Specifically, states with large load centers, such as Maharashtra and Rajasthan, will need to lead the way by making plans for utility-scale battery storage systems, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).
State-owned Solar Energy Corp. of India (SECI) has led the way by introducing multiple renewable energy plus battery storage auctions that mandate round-the-clock renewable power supplies. However, SECI’s efforts alone will not be enough to build the battery storage capacity needed for the Indian grid to handle large amounts of variable renewables, IEEFA said.
Time-of-day pricing mechanisms that differentiate between peak and off-peak power supplies will be critical to incentivize investment into such capital-intensive assets, IEEFA said. Additionally, states could offer viability gap funding (VGF) for battery storage, just as they did to support the growth of large solar parks a few years ago.
Grid integration will be one of India’s biggest challenges as it targets the deployment of 450 GW of large-scale variable renewables by 2030. Reaching this target from a current installed renewables capacity of 93 GW will require average annual capacity additions of 35 GW.