Mercom – pv magazine India

July 9, 2024 Uma Gupta

India has a total installed battery energy storage system (BESS) capacity of 219.1 MWh/111.7 MW as of March 2024. Of this, 120 MWh/40 MW of the installed capacity was added in the first quarter of 2024, according to a new report by Mercom India Energy of India Storage Landscape.

According to the report, PV systems combined with battery storage systems accounted for 90.6% of the total installed BESS capacity.

The Mercom report presents the status of energy storage installations in India, key states in terms of energy storage potential development, tariff trends, plans and installed capacity of standalone BESS projects, BESS-connected renewable energy and pumped storage.

The report found that the rapid addition of intermittent renewable energy sources, such as solar and wind, had a significant impact grid stability. Solar and wind energy accounted for 28.9% of the country’s electricity capacity in March 2024.. Policy measures such as the deviation settlement mechanism, grid connectivity regulations, and ancillary service regulations are issued to ensure the effective integration of renewable energy sources and grid stability. These measures are driving demand for utility-scale energy storage.

The Feasibility Gap Funding (VGF) scheme aims to install 4 GWh of BESS, supported by a budget of INR 37.6 billion (USD 452 million). The VGF, energy storage commitments and guidelines for bidding for energy storage projects, with or without renewable energy, are increasing the number of energy storage projects in the country.

“India is a growing market for energy storage, still in its early stages. Despite the rapid growth in renewable energy, energy storage has lagged behind, potentially leading to grid constraints and lack of flexibility and stability. The urgency seen in renewable energy initiatives has been missed in energy storage. To achieve energy transition goals and manage the exponential growth of renewable energy, the government needs to prioritize energy storage to avoid the challenges faced by other countries with increasing intermittent power but insufficient storage capacity,” said Raj Prabhu, CEO, Mercom Capital Group.

The report said that Chhattisgarh is the leader in BESS installations, accounting for 54.8% of the total installed capacity.

The total operational pumped-storage hydropower capacity in India stood at 3.3 GW as of March 2024, the Central Electricity Authority (CEA) report said. Almost 76% of the country’s operational capacity is in Telangana and West Bengal.

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As of March 2024, 1.6 GWh/1 GW of stand-alone BESS, 9.7 GW of renewable energy projects with energy storage, and 78.1 GW of pumped-storage hydro projects were at various stages of development (60 GW is under research and analysis and 18.1 GW is under development).

The largest standalone BESS capacity under development was in Rajasthan. Favourable provisions for the development of energy storage capacity in the state’s renewable energy policy and annual energy storage commitments (valid till FY30) have driven the state’s demand for energy storage.

To meet the demand for efficient use of renewable energy, by March 2024, various government agencies had announced tenders for a total amount of 57 GW and auctioned 11.5 GW of energy storage projects, with or without renewable energy capabilities. The total value of tenders for standalone and renewable projects with energy storage in the first quarter of 2024 amounted to 7.4 GW.