India’s renewable energy (RE) storage capacity is projected to grow from less than 1GW in March 2024 to 6GW by fiscal 2028.
This substantial increase in renewable energy storage capacity in India will be driven by a strong pipeline of projects currently under implementation and a promising pace of upcoming auctions, according to a report from Crisil Ratings.
The report highlights that storage is becoming increasingly crucial as the share of renewable energy, including solar and wind, continues to rise in the overall power generation mix. Given that renewable energy generation is often concentrated during specific times of the day—such as solar energy peaking during daylight hours—there is a mismatch between energy production and peak demand periods, which typically occur in the morning and evening.
To address this challenge, the Indian government is focusing on developing the necessary infrastructure through standalone storage systems, such as pumped hydro or battery storage, as well as storage-linked projects that combine renewable energy generation with storage. The pace of auctions for these projects has increased significantly in recent years.
In the last two fiscal years alone, approximately 3GW of standalone storage and 10GW of storage-linked projects (with around 2GW of storage) were auctioned, leading to a healthy pipeline of about 6GW of storage capacity as of May 2024.
Despite this progress, the implementation has faced delays. Manish Gupta, Senior Director at CRISIL Ratings, noted that slow adoption by state distribution companies (discoms) has been a major barrier, with 60-65 percent of such projects lacking executed power purchase agreements (PPAs) as of May 2024.
The Indian government has set an ambitious target to increase renewable energy capacity from 130GW in March 2024 to 450GW by 2030. To support this goal, Renewable Purchase Obligations (RPOs) have been established, requiring discoms to increase the share of renewable energy in their portfolios from the current 25 percent to 39 percent by fiscal 2028. As renewable energy penetration grows, the focus on storage will become even more critical for grid balancing.