India needs 12 GW of storage capacity in FY2024

This will be increasing to 70 GW in FY2030.

India will need around 12 gigawatts (GW) of energy storage capacity, with an assumption of four hours of storage per GW in the financial year 2024 in line with the government’s energy storage obligations (ESO) policy, according to CareEdge Ratings.

Launched in July 2022, the ESO states that obligated entities should ensure securing some renewable capacity with storage components. The A 1% target is set for FY2024, and a linear increment of 0.5% is mandated until FY2030.

Along with the augmented renewable purchase obligation targets, ESO will support India’s goal of installing 500 GW of renewable energy by 2030.

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CareEdge Ratings noted that the government has issued various policies to promote energy storage (PSP) and attract project investments such as the framework for pumped storage projects focusing on land allocation, and approvals simplification.

The country also launched guidelines to standardise key terms in various tenders requiring firm and dispatchable energy, and the viability gap funding which aims to lower the levelised cost of storage.

“The investor interest in this segment also remains buoyant with multiple large groups winning capacities in various storage auctions,” said Sabyasachi Majumdar, Senior Director, CareEdge Ratings. 

“However, from a financial viability standpoint, the country needs to cover some distance as BESS which is modular in nature is not as cost effective as PSPs and the latter has its inherent challenges including dependence on location, high gestation period etc,” Majumdar added.