India's Battery Storage Capacity To See 4GW Jump By 2028
India's battery storage capacity is set to surge to four gigawatts (GW) by 2028, driven by government grants and declining battery costs, according to a recent report by CRISIL Ratings. This significant increase represents a dramatic shift from the current low levels, offering a major boost to the country's renewable energy ambitions.
Government policy plays a key role in this growth, the Viability Gap Funding (VGF) scheme, offering financial support of up to Rs 3,760 crore to four GW-hour of battery projects, is expected to reduce project costs by 40 per cent and improve returns by 200-300 basis points. Additionally, falling battery prices are currently at almost USD 140 per kilowatt-hour (kWh), down from almost USD 175 per kWh just a year ago.
Further, the report stated that renewable energy adoption in India has witnessed a rise, growing from 70 GW in 2019 to 120 GW in 2023. This trend is projected to continue, reaching 220 GW by 2028, pushing the share of renewables in the overall power mix to over 20 per cent. However, the intermittent nature of solar and wind power necessitates effective storage solutions to maintain grid stability.
Battery storage emerges as the technology of choice for absorbing and managing this variability. With improved economics and supportive policies like passthrough on duties, interstate transmission charge waivers, and additional revenue streams, the report anticipates investments of around four GW in battery storage by 2028.
Additionally, the report suggested that the early signs of traction are already evident, with over one GW of battery storage capacity auctioned to date. However, the report highlights the need for clarity on VGF grant applicability and potential macroeconomic impacts on commodity and battery costs to sustain this momentum.
This anticipated growth in battery storage capacity presents a positive outlook for India's renewable energy ambitions. By effectively managing the intermittency of renewables, battery storage will play a crucial role in ensuring grid stability and facilitating further integration of clean energy sources into the country's power mix.
