India set for 12-fold increase in energy storage capacity to 60 GW by FY32: SBI Report
- IBEF
- December 19, 2024
India is set for a substantial expansion in energy storage capacity, with projections suggesting a 12-fold increase to approximately 60 GW by FY32, according to an SBI report. This growth will outpace the anticipated renewable energy (RE) generation rise. The share of renewable energy projects incorporating energy storage solutions has significantly increased from 5% in FY20 to 23% in FY24. As variable renewable energy (VRE) is expected to triple its share in power generation by FY32, grid stability concerns are growing, as the mismatch between VRE generation and peak power demand could destabilise the grid. Energy Storage Systems (ESS) will be pivotal in managing this transition by storing surplus renewable energy during high production periods and releasing it during peak demand, addressing issues like the "diurnal duck curve."
Battery Energy Storage Systems (BESS) and Pumped Storage Projects (PSP) are projected to dominate the market. BESS is expected to increase by 375 times to 42 GW by FY32. PSP capacity is forecasted to grow four-fold to 19 GW. Despite PSP’s longer development timelines and the risk of stranded assets, they remain crucial for peak shaving and grid stability due to their low operational costs. However, India faces domestic battery cell production challenges, as around 80% of BESS costs are tied to imported components. Significant investment is being made in manufacturing to reduce reliance on imports, with a projected US$ 41.22 billion (Rs. 3,50,000 crore) opportunity in the BESS ecosystem until FY32. PSPs are expected to attract US$ 14.13 billion (Rs. 1,20,000 crore) in investments by FY32.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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