Energy Storage To Keep Pace With RE Installation In India – Fitch Ratings

The success of renewable energy in any market largely depends on the energy storage capacity given the intermittency nature of it. The credit rating agency, Fitch Ratings, has said in its new report that power storage demand in India will expand at a rapid pace to stabilise the increasing variability on both the power supply side – from rising renewable generation – and the demand side.

Fitch said that investments in power storage will be crucial to stabilise India’s increasing power generation, as the country aims to double, inherently volatile, renewable generation by 2030 as part of its Conference of the Parties (COP26) commitments on climate change.

The majority of the investment in storage is expected to come from the private sector, as government-owned entities act as nodal agencies and intermediate counterparties. I

Fitch held that India’s leading renewable generation companies, such as Greenko Energy Holdings (BB/Negative) and ReNew Power Private Limited (BB-/Stable), and other private companies are increasing their investments in the power storage value chain.

Fitch Ratings has also said that it expects the quantum of storage capacity, and its split across technologies to depend on several factors. These will include power demand curves; power generation mix, especially the share of variable renewable generation; cost of storage technologies; industrial demand for greening purposes; and efforts on demand-side management, including the optimisation of agricultural load.

Fitch has also said that a successful implementation of the recent regulatory changes, a stable operating environment that supports long-term cash flow predictability and a competitive level playing field will be critical in spurring investment in power storage. This is held necessary in the present situation when there are high upfront investment costs and the long operating life of storage assets.

The Central Electricity Authority (CEA) modelling predicts a requirement of 27GW/108 MWh of battery storage and 10,151 MW of pumped hydro energy storage by the end of this decade. On the same lines, the Power Ministry had recently issued guidelines for the procurement and utilisation of battery energy storage systems as assets for generation, transmission and distribution and ancillary services.