India’s Renewable Energy Storage Capacity Set To Surge To 6 GW By FY28: CRISIL

New Delhi, Aug 14 (KNN) India's renewable energy storage capacity is projected to rise significantly, reaching 6 GW by the fiscal year 2028, up from less than 1 GW operational as of March 2024, according to a report by CRISIL.

This growth is anticipated to be driven by a strong pipeline of ongoing projects and an active schedule of upcoming auctions.

The report emphasises that this increase in storage capacity is critical for managing the rising share of renewable energy (RE) in the country’s overall power generation mix.

CRISIL highlighted that the government's continued support for developing RE and the discovery of competitive tariffs for round-the-clock renewable energy in recent years have bolstered confidence in the adoption of such technologies.

The agency further noted that storage solutions are becoming increasingly essential as the proportion of solar and wind energy grows within the power generation sector.

The inherent variability of RE generation necessitates storage solutions to balance supply with peak demand periods, which typically occur in the morning and evening.

To address these challenges, the government is focusing on building the necessary infrastructure, including standalone storage systems and projects that integrate RE generation with storage.

Recent auction activity has accelerated, with approximately 3 GW of standalone storage and 10 GW of storage-linked projects, including 2 GW of storage, auctioned in the past two fiscal years.

This has resulted in a pipeline of around 6 GW of storage capacity as of May 2024.

The expansion of storage capacity is vital to achieving the government’s goal of increasing RE’s share in the national power mix to 20-22 per cent by 2028.

However, the implementation of these projects has been slower than expected, partly due to the reluctance of state distribution companies (discoms) to finalise power purchase agreements (PPAs).

As of May 2024, 60-65 per cent of these projects had yet to secure PPAs, according to Manish Gupta, Senior Director, CRISIL Ratings.

One of the primary obstacles to wider adoption is the higher tariff associated with storage projects compared to other RE bids, due to the additional costs involved.

Nonetheless, there is optimism that the government's support for RE and the competitiveness of storage tariffs relative to other round-the-clock power sources, including coal-based thermal plants, will drive greater adoption.

(KNN Bureau)