July 10, 2024 – According to the newly released report India’s Energy Storage Landscape by Mercom India Research, India had a cumulative installed Battery Energy Storage System (BESS) capacity totaling 219.1 MWh as of March 2024.
India’s Energy Storage Landscape report provides a detailed account of the landscape of energy storage systems projects in India. The report outlines the status of energy storage installations, key states for energy storage capacity development, tariff trends, the pipeline and installed capacity of standalone BESS projects, renewable energy plus BESS, and pumped storage.
The rapid addition of intermittent renewable energy sources, solar and wind, which accounted for 28.9% of the country’s electricity capacity as of March 2024, has significantly impacted grid stability. Policy measures such as deviation settlement mechanisms, grid connectivity regulations, and ancillary services regulations are being issued to ensure efficient renewable integration and grid stability. These measures are driving the demand for utility-scale energy storage. The Viability Gap Funding (VGF) program aims to install four (4) GWh of BESS, supported by a budget of ₹37.6 billion (~$452 million). The VGF, energy storage obligations (ESO), and bidding guidelines for energy storage projects – with or without renewable energy – are boosting the country’s pipeline of energy storage projects.
India began adding energy storage capacity in 2013 with small pilot projects, and as of March 2024, the country’s cumulative installed energy storage capacity stood at 219.1 MWh (~111.7 MW). Of the installed capacity, 120 MWh or 40 MW was added in Q1 2024.
Solar photovoltaic (PV) systems combined with battery energy storage systems (PV + BESS) accounted for 90.6% of the total installed capacity.
“India is an emerging market for energy storage, still in the early stages of development. Despite rapid growth in renewable energy, energy storage has lagged, which could potentially lead to curtailment and a lack of grid flexibility and stability. The urgency seen in renewable energy initiatives has been missing in energy storage. To meet energy transition goals and manage the exponential increase in renewable energy, the government must prioritize energy storage to avoid issues faced by other countries with growing intermittent power but insufficient storage capacity,” said Raj Prabhu, CEO at Mercom Capital Group.
The highest BESS capacity was installed in Chhattisgarh, accounting for 54.8% of cumulative installed capacity.
The country’s operational pumped hydro storage capacity totaled 3.3 GW as of March 2024, per Central Electricity Authority (CEA) data. Nearly 76% of the country’s operating capacity is in Telangana and West Bengal.
As of March 2024, 1.6 GWh (~1 GW) of standalone BESS, 9.7 GW of renewable energy projects plus energy storage, and 78.1 GW of pumped hydro projects were in various stages of development (60 GW is under survey and investigation, and 18.1 is under development).
The highest capacity of standalone BESS under development was in Rajasthan. Favorable provisions for energy storage capacity development in the state’s renewable energy policy and annual energy storage obligations (applicable through FY30) have been driving the state’s demand for energy storage.
To meet the demand for efficient energy utilization from renewable sources, various government agencies have issued tenders totaling 57 GW and auctioned 11.5 GW of energy storage projects, with or without renewable energy capacities, as of March 2024. Tenders for standalone and renewable projects with energy storage totaled 7.4 GW in Q1 2024.