India needs 260 GWh grid storage battery annually by 2030

India’s need for grid storage batteries is expected to rise from 106GWh to 260GWh by 2030. As per a report “Need for Advanced Chemistry Cell Energy Storage in India” which is published by NITI Aayog and RMI, this prediction is made based on the current scenario of EVs in India and India’s power generating targets.

This report has come at a time when there is an ongoing process to evaluate Production Linked Incentive for the establishment of 50GWh of domestic production capacity across up to ten new facilities producing so-called Advanced Chemistry Cells (ACC) (PLI).

In this report, those factors are explained that are driving this increasing demand.

According to Union Government policies, 30% of new vehicle sales should be electric by 2030, in addition to a target of 500GW of new renewable energy capacity coming online by 2030 — a target that the country appears on track to meet given that it has already reached about 175GW of solar PV and wind capacity.

The BloombergNEF estimates that demand for energy storage will reach US$150 billion per year by the end of this decade. According to RMI and NITI Aayog, India might account for 13% of total demand due to its strong penetration of electric vehicles and stationary energy storage.

Given the vast range of services they may provide and their dropping costs, growth in the renewable energy sector will naturally lead to a large market potential for stationary energy storage systems (ESS), which are becoming competitive with existing technologies.

Why suddenly does India need grid-level energy storage systems?

There are six primary reasons why India’s battery manufacture needs to be accelerated.

  1. The importance of batteries in climate action: India’s goal of net-zero by 2070 and 50% of the energy from renewable energy by 2030 can only be achieved with the help of an energy storage system.
  2. India imports not only significant volumes of fossil fuels but also the equipment and materials required for renewable energy projects such as solar PV modules and lithium-ion batteries. The impact of domestic manufacturing on national energy security would be good.
  3. According to the IQAir score, India has 22 of the top 30 most polluted cities in the world. Clean energy and electric vehicles are two options for reversing this trend.
  4. Battery demand will likely increase once EV adoption goals are met.
  5. Increased involvement in battery production is a wonderful way for India’s industry to grow.
  6. Falling battery prices are allowing them to be used in an increasing range of applications.

New possibilities with Energy Storage System

Stationary energy storage, grid support ancillary services, renewables integration, transmission and distribution (T&D) upgrade deferral, and commercial behind-the-meter (BTM) will all be extremely attractive businesses by 2030, according to the report.

In the case of grid services, the new policies made by the central and the state govt will allow battery storage to compete in wholesale markets for ancillary services.

For India’s power grid transmission utilities and distribution businesses (discoms), there are numerous revenue streams for energy storage that may be accessed to boost the network’s stability and efficiency.

Energy storage can be one of the assets utilized to meet peak demand for electricity, which has mostly driven investment in peaking capacity from natural gas combustion turbines until now.

Utilities can defer the need to invest in distribution system modifications in sections of the grid that are seeing or expect to experience, rapid increases in demand for energy, as is beginning to be seen in other markets such as the United States. Similarly, employing strategically located energy storage capacity, the need for costly transmission system modifications might be avoided.

The direct advantage to power sector enterprises includes smoothing and firming renewable energy output, voting support, and frequency control auxiliary services, black starting generating and the system after outages or accidents, and much more, as observed in many places of the world.

US$15 billion annual demand by 2030

Only about 85MWh of battery energy storage systems (BESS) are under development or currently operational in India, according to the India Energy Storage Alliance (IESA), although there is a pipeline of 4.6GWh (3.3GWh tendered for and 1.2GWh announced).

RMI and NITI Aayog created two scenarios for the report, one conservative and the other accelerated adoption for batteries. The accelerated scenario (260GWh) equates to US$15 billion in demand by 2030, with US$3 billion from pack assembly and integration and US$12 billion from cells, according to RMI and NITI Aayog.

The annual market would be worth more than US$6 billion even in the most modest case (106GWh). According to the research, localizing sections of the supply chain might allow the country to capture “substantial value.”

Although electric vehicles receive a lot of media attention, they will only account for roughly 40% of overall demand, including freight applications, with grid-scale stationary storage accounting for the same amount, if not more.

The paper is the first in a series of three, with the second and third focusing on factors directly supporting domestic production.

India’s first grid-scale li-ion battery storage system

  • The Solar Energy Corporation of India (SECI) has published a tender notice for 2,000 MWh of standalone energy storage devices. The projects must be built on a build-own-operate basis (BOO). SECI would engage in a 25-year arrangement with the winning bidders.
  • NTPC Limited has asked Indian and international businesses to submit expressions of interest (Eol) for the installation of 1,000 MWh of grid-connected battery energy storage systems (BESS) on the premises of its power facilities across India.

At Inverted Energy, we manufacture lithium batteries for the Energy Storage.