India’s Energy Storage Tech Capacity to Reach 180-800 GW by 2050

In India, flexibility has been referred to as the “new currency for the use of energy” by some. Energy storage has the technical potential to provide some of this grid flexibility. However, questions remain about the opportunities for energy storage in India and other South Asia countries, including Bangladesh, Bhutan, and Nepal. Uncertainty remains about the technology costs, as well as rules governing energy storage operations, ownership, and compensation mechanisms.

Under direction of the U.S. Department of State, the National Renewable Energy Laboratory has produced a new study, “Energy Storage in South Asia: Understanding the Role of Grid- Connected Energy Storage in South Asia’s Power Sector Transformation,” to provide a first-of-its-kind assessment of cost-effective opportunities for grid-scale energy storage deployment in South Asia both in the near term and the long term, including a detailed analysis of energy storage drivers, potential barriers, and the role of energy storage in system operations.

The researchers conducted scenarios-based capacity expansion modelling to assess when, where and how much energy storage can be cost-effectively deployed in India through 2050.

As per the report, energy storage in Nepal and Bhutan can help in optimising exports to India, thereby helping the South Asia grid to accommodate more hydro and RE in the system. Energy storage in Bangladesh can help displace fuel oil generation, reduce the production cost, and provide balancing services.

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The report finds that cost-effective energy storage capacity is likely to grow quickly with an average year-over-year growth rate of 42% between 2020 and 2030. Initial deployments are primarily 2-hour duration battery systems. Beginning in the mid-2020s, 4-hour battery storage deployments dominate the energy storage landscape. Pumped-hydro development is limited to those projects that are currently under construction or planned as per the Central Electricity Authority.

Battery storage investments will be cost-effective in 26 of the 34 states and union territories by 2030. Three states will have over 10 GW of battery storage capacity by 2030: Jammu and Kashmir, Gujarat, and Karnataka.

Energy Storage Technologies Play an Increasing Role in India’s Power System

The capacity of storage technologies is expected to reach between 180 GW and 800 GW, representing between 10% and 25% of total installed power capacity by 2050. Energy capacity of storage reaches between 750 GWh and 4,900 GWh by 2050.

The study also finds that where energy storage cannot receive revenue for energy time-shifting, overall investments in energy storage technologies fall by 65%.

New PSH Capacity Can Be Cost-Effective in the Near Term

The cost scenarios analysed show that in the near term, new PSH at 6.9 Crore ₹/MW will be cost-competitive with battery storage technologies. Further reductions in PSH costs will result in more PSH capacity and delayed investments in BESS projects. PSH capacity will likely reach 52 GW with 630 GWh energy capacity by 2030 in the Low PSH Cost scenario (4.9 Crore ₹/MW in 2020). This buildout represents over half of the potential PSH capacity that has been identified by CEA.

However, given rapidly declining costs for BESS, longer-term opportunities for economic PSH investments are limited. The researchers see no new investments in PSH projects after 2030 across the capacity expansion scenarios evaluated for this study. However, upgrading existing reservoir storage with pumping capacity may be cost-effective, but is not considered in this study.

Energy Storage Provides System Balancing, Ramping, and RE Integration Services

By 2030, India’s maximum hourly net load ramp could reach 60 GW. The role of energy storage (which is primarily charged during the daytime, enabling higher penetration of solar) in integrating RE would become increasingly important by 2050, when coal, gas and hydro would contribute only 20% toward the country’s generation mix.