India's battery energy storage capacity has experienced a remarkable surge, growing more than four-fold to 219 MWh by March 2024, compared to 47.6 MWh in March 2023. This significant increase underscores the country's commitment to enhancing its renewable energy integration and grid stability. The data, released by Mercom Capital Group, highlights the rapid progress India is making in the energy storage sector, driven by various policy measures and initiatives.

Policy Measures Driving Growth

Several key policy measures have played a crucial role in this growth. The deviation settlement mechanism, grid connectivity regulations, and ancillary services regulations have all been instrumental in facilitating the integration of renewable energy sources and ensuring grid stability. Additionally, the Viability Gap Funding (VGF) program, with a budget of US$ 450.5 million (Rs. 37.6 billion), aims to install 4 GWh of battery energy storage systems (BESS). This program is a significant driver of the recent surge in energy storage capacity.

Moreover, energy storage obligations (ESO) and bidding guidelines for energy storage projects, both standalone and coupled with renewable energy, are contributing to a robust pipeline of projects. These measures are designed to incentivize the adoption of energy storage solutions, ensuring that the infrastructure keeps pace with the rapid growth in renewable energy capacity.

Historical Context and Recent Developments

India's journey into energy storage began with pilot projects in 2013, and since then, the cumulative installed capacity has steadily grown. As of March 2024, the total installed capacity stands at 219.1 MWh, with an impressive 120 MWh added in the first quarter of the year alone. This rapid expansion reflects the increasing recognition of the critical role that energy storage plays in supporting the energy transition.

Notably, solar photovoltaic systems integrated with BESS account for 90.6% of the total installed capacity. This highlights the symbiotic relationship between renewable energy generation and storage solutions. By pairing solar PV systems with battery storage, India is enhancing the reliability and efficiency of its renewable energy infrastructure.

Challenges and the Need for Prioritization

Despite the rapid growth in renewable energy capacity, the development of energy storage infrastructure has lagged, potentially leading to curtailment and grid stability challenges. The intermittent nature of renewable energy sources like solar and wind makes energy storage an essential component for ensuring a stable and reliable power supply.

Mercom Capital Group CEO Mr. Raj Prabhu emphasized the imperative of prioritizing energy storage to support India's energy transition goals. He pointed out that without adequate energy storage infrastructure, the country could face significant challenges in managing the rising penetration of intermittent renewable power sources. By investing in and prioritizing energy storage, India can better harness the full potential of its renewable energy resources and achieve its ambitious energy transition targets.

Future Outlook and Strategic Importance

The future outlook for India's energy storage sector is promising, with a strong pipeline of projects supported by favorable policies and funding mechanisms. The Viability Gap Funding program and other initiatives are expected to drive further growth in the coming years, ensuring that energy storage infrastructure keeps pace with the expansion of renewable energy capacity.

As India continues to advance its energy transition, the strategic importance of energy storage cannot be overstated. By integrating battery energy storage systems with renewable energy sources, India can achieve greater grid stability, reduce curtailment, and enhance the overall reliability of its power supply. This, in turn, will support the country's broader economic and environmental goals, paving the way for a sustainable and resilient energy future.

Conclusion

India's battery energy storage capacity has made significant strides, growing more than four-fold to 219 MWh by March 2024. This remarkable growth is driven by various policy measures, including the Viability Gap Funding program, energy storage obligations, and bidding guidelines for energy storage projects. The strong performance of solar photovoltaic systems integrated with BESS highlights the importance of renewable integration in achieving India's energy transition goals.

Despite the progress, the development of energy storage infrastructure must continue to be prioritized to address potential curtailment and grid stability challenges. By investing in and advancing energy storage solutions, India can effectively manage the rising penetration of intermittent renewable power sources, ensuring a stable and reliable power supply.

The future of India's energy storage sector looks bright, with a robust pipeline of projects and continued policy support. As the country moves towards a sustainable and resilient energy future, the strategic importance of energy storage will only grow, underpinning the successful integration of renewable energy and the achievement of India's ambitious energy transition targets.