Mint Primer: All charged up - India’s battery storage plans

BESS balances the intermittency of renewable power and provides grid stability. (AP)
BESS balances the intermittency of renewable power and provides grid stability. (AP)


  • The Centre has announced a scheme to fund battery storage projects and increase storage capacity. Battery storage systems are needed to drive green energy consumption and cut greenhouse gas emissions. Mint takes a closer look.

How do we store battery energy?

Battery energy storage systems (BESS) conserve energy generated from renewable sources such as sun and wind, and release it to the grid when needed. They help to match demand and supply of renewable energy. Solar energy is generated during the day and wind during the season, but the energy generated goes to waste in case there is low demand. BESS are intelligent systems that use algorithms to coordinate with the grid and decide whether to store or release energy. BESS are built using lithium-ion batteries whose high energy density, declining prices and long life are ideal for energy storage.

How critical is BESS to a global green switch?

Unlike fossil fuel, renewable energy by nature is intermittent. This creates challenges for grid management: a sudden surge or drop in power generation can lead to blackouts. Many utilities continue to use fossil fuel-based power plants only to avoid this eventuality. BESS balances the intermittency of renewable power and provides grid stability. It can thus help reduce the dependency on fossil fuel and increase the share of renewable energy, further reducing greenhouse gas emissions. If the world is to meet the Paris Agreement climate objectives in reining in global warming, BESS is critical.


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Where is India today when it comes to energy storage?

We are at the start line with a capacity of just 37MWh. If India is to meet its renewable energy target of 500GW by 2030, it will need BESS packs of more than 200GWh. Big firms like NTPC, Reliance, Adani and JSW are interested. The International Energy Agency expects India’s storage capacity at 200GWh by 2040, the highest in the world.


So what’s the plan to scale up storage?

Recently, the Centre approved a scheme to create BESS capacity of 4GWh by 2030-31. It offers viability gap funding to the developers to the tune of 3,760 crore. The funding, capped at 40% of project cost, will be offered over three years from 2023-24 to

2025-26. This could significantly cut the cost of battery storage. It has also announced a 18,100 crore production-linked incentive scheme for advanced cell chemistry battery manufacturing. This will create the self-sufficiency critical for making Li-ion batteries.


What’s happening on this front globally?

McKinsey says $5 billion was invested in 2022 (that’s 3x 2021) in BESS. It expects the global BESS market, currently $55 billion, to touch $150 billion by 2030. The fall in Lithium-ion battery prices has made BESS viable and pushed capacity. The cost of Lithium-ion battery systems could drop from $151/KWh today to $59/KWh by 2030 (it was $1,220/KWh in 2010). So, experts estimate annual installation of BESS to grow 10x between 2022 and 2030 and exceed 400GWh annually by the end of this decade.

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