Renewable Energy Sector Growth
Renewable Energy Sector Growth – Energy storage projects are poised to take center stage in the renewable energy sector in the upcoming year, as more green capacity is integrated alongside supportive policies, financial incentives, lower battery prices, and increasing demand. The expansion of variable renewable energy capacity necessitates storage for integration and grid stability, whether as part of a renewable energy project or as a standalone entity, which has gained momentum over the past year.
Conversely, India’s power demand is on the rise, and planned thermal capacities are expected to be gradually installed by 2032. During this transition period, storage will play a crucial role in meeting the escalating peak demand. Experts anticipate that the government and industry will promote the addition of storage capacity in 2025 as power distribution companies prepare to meet the necessary resources for peak electricity demand. “We anticipate a surge in the deployment of battery storage systems for renewables in India by 2025,” stated Debi Prasad Dash, President of the India Energy Storage Alliance (IESA). Many Indian companies have evolved, and numerous global companies have entered the Indian market this year.
The government has introduced a viability gap funding scheme for battery energy storage systems and is developing a pumped hydro storage policy, as announced in the FY25 budget. India’s energy storage market expanded by 1.7 times in 2024, reaching a total pipeline capacity of 114 GWh of storage-linked projects, according to Debmalya Sen, India Lead – Energy at the World Economic Forum (WEF). Sen noted that 20 GWh of the pipeline consists of battery energy storage systems (BESS), while 91 GWh is attributed to pumped storage projects (PSP). Although PSP currently dominates the small capacity, this trend is expected to shift, with BESS comprising the majority share by FY30, as stated in a report by SBI Capital Markets.
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Industry experts have attributed the declining battery prices as the primary reason for the significant impact expected in the coming years. This, coupled with supportive government policies and financial assistance, has resulted in a consistent decrease in India’s standalone battery tender prices.
The quote for a standalone battery energy storage system tender was ₹2.19 lakhs/MW/month, with a 30% VGF support, marking a substantial decrease from ₹10.83 lakhs/MW/month in March 2022. In 2024, a total of 178 MWh of battery energy storage projects were commissioned, with an additional 29 GWh worth of capacity moving to the execution phase, according to Sen from WEF. The year also saw the lowest tariff discovery across solar plus storage and firm and dispatchable renewable energy (FDRE) tenders, which include storage components, ranging from ₹3.41 per unit to ₹4.73 per unit.
IESA anticipates a cumulative market potential of approximately 250 GWh of battery energy storage requirements by 2032. Dash from IESA expressed confidence that India will emerge as a market leader in this sector over the next seven years, alongside the US, Australia, Europe, and China.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.