India’s energy transition policy to ramp up energy storage capacity to 336 GWh to power its sustainability game-plan
With its ambitious energy goals riding on ramping up of its battery energy storage systems (BESS), India is rolling out several incentive-laden policies to attract an investment of Rs 5,40,000 crore by 2030. The push aligns with country’s climate goals and meet the demands of its burgeoning renewable energy sector.
Under the Viability Gap Funding (VGF) scheme, the Ministry of Power aims to jumpstart the development of 14 gigawatt-hours (GWh) of BESS in the next few years. Approved by the Union Cabinet in September 2023, the VGF scheme covers 40 per cent of the capital cost of BESS projects, spurring states and central public sector undertakings to fast-track expansion of capacities.
According to the Central Electricity Authority (CEA), India needs 336 GWh of storage by 2030 to be met largely by battery systems (208.25 GWh) with the rest being served by pumped storage projects. Speaking at India’s Outlook on Clean Energy Storage, an event organised by the Confederation of Indian Industry (CII), Srikant Nagulapalli, Additional Secretary at the Ministry of Power said, “We are looking at an investment of roughly Rs 5,40,000 crore over the next six years”. He added that a comprehensive resource adequacy plan is being chalked out to allot battery energy storage capacity to different states and public sector entities. "Within the next year, we expect a significant number of tenders for BESS and pumped storage projects to roll out under the VGF scheme," he said.
Despite the progress, scaling up energy storage remains an uphill task. Vikram Handa, Chairman of the CII Initiative on Clean Energy Storage Systems and Managing Director of Epsilon Advanced Materials (EAM), highlighted some of the challenges facing this nascent sector. This included high capital costs, investment requirements, and raw material vulnerabilities, which are hobbling the growth of supply chains despite the brilliant upside. “The energy storage market is expected to grow 12-fold by 2030,” he said.
Quoting the Sustainability Report 2023-24 of EAM, he pointed out that the graphite anodes made by it generated 78 per cent fewer emissions than those made in China. In other words, they were far superior in terms of Global Warming Potential (GWP). “We aim to embed sustainability principles across every aspect of our operations, ensuring our battery materials actively support decarbonisation,” said Handa.
Experts point out that the energy storage sector’s success will be determined by technology innovation and sustainable practices. The CII report on India’s Outlook on Clean Energy Storage: A Roadmap to Net Zero recommends tax holidays for renewable energy-powered storage projects and highlights the need for a circular economy approach, including recycling and safe disposal of battery components.
Consolidating insights from multiple sectors, including renewable energy, automotive, and grid operators, the report advocates for sustainable production practices and policy support for effectively integrating energy storage into India’s energy infrastructure.