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Opinion piece by
Saransh Roy – Senior Investment Specialist, Institutional & Infrastructure Investments, Invest India &
Kanika Verma – Associate, Renewable Energy & Power and Strategic Investment Research Unit, Invest India
India’s Renewable Energy (RE) sector is a key market for global investors, offering a potential of over 1000 GW and an investment opportunity of over USD 20 Billion (Bn) annually. India has one of the most ambitious renewable energy targets in the world – 450 GW of renewable energy by 2030, spearheaded by the personal commitment of Prime Minister Narendra Modi. Within a short span of five years, India has established itself as a global leader in the renewable energy sector. At 89 GW, India has the 5th largest installed capacity globally, along with the 4th largest for wind and 5th largest for solar energy.
In 2015, during COP21, India led the way by declaring ambitious government commitments for a ‘New India’ powered by clean sources of energy, which includes 33-35 per cent reduction in the emissions intensity below 2005 levels and increase in the share of non-fossil fuels in the total installed capacity to 40 per cent by the year 2030.
According to a recent report by the International Energy Alliance (IEA) titled the ‘World Energy Outlook 2020’, power generation from renewable energy sources is the only energy source showcasing growth this year. Similarly, for India, the coal sector has shown a marked decline. With the expectation that coal levels shall never reach the pre-pandemic levels, Solar PV projects would play an increasingly vital role for meeting the growth in the energy demands.
According to the India’s Power Minister, R.K. Singh, “Solar energy is already contributing around 2.8 percent of global electricity and if trends were to continue, by 2030, solar will become the most important source of energy for electricity production in large parts of the world.”
With a rise in the need for solar energy, storage would play a very vital role in ensuring the flexible operations of the power systems. India, with its ambitious renewable energy targets, is already shifting its focus towards storage-based projects to tackle the intermittency of the power generated through clean energy sources.
India’s energy storage market, which was USD 2.1 Bn in 2019, will translate to 230 GWh during the 2020-27 period. This, coupled with the increased focus of the government in achieving its 2022 target of 100 GW solar capacity and 60 GW capacity of wind power, will further propel the energy storage market in India. By 2040, India is touted to become the largest market for utility scale energy storage.
The government of India is playing a catalytic role in establishing and developing the energy storage market in India. Piggybacking on the measures to boost adoption of renewable energy in India by the government, energy storage is poised to grow as a promising field for foreign investors looking to leverage the clean energy ecosystem of India.
Steps taken and policies central to these are: –
Demand Boost: Between 2018 and 2020, storage tenders of 169 MWh capacity have been issued by the government. In addition to this, SECI released two more solar tenders with 3,900 MWh of storage capacity.
Manufactured Linked Tender: 1.2 GW of SECI tenders have been won by Greenko (900MW) and ReNew Power (300MW). Greenko will further invest around USD 1 Bn in the battery storage business.
Production Linked Incentive (PLI) Scheme: Government of India will invest around USD 2.4 Bn over next five years to support the manufacture of Advanced Chemistry Cell (ACC) batteries to help both domestic and international players set up operations in India.
Wind-Solar Hybrid Policy: Introduced by the government in 2018 to develop hybrid power, India’s total wind-solar hybrid capacity is expected to grow to 11.7 GW by 2023, adding further boost to the energy storage capacity.
Public Sector Initiatives: The NTPC Vidyut Vyapar Nigam Limited (NVVN) has issued a global Expression of Interest (EoI) for ten Fuel Cell Electric Vehicles (FCEV) for public transportation purposes in Leh and New Delhi. As of April 2020, the pilot project under Phase-I of the program, has already launched the use of five of each of the fuel cell electric buses and cars in Leh.
Operated by Tata Power-Delhi Distribution Limited (DDL), India has already operationalised its first grid-scale battery substation in March 2019 located at Rohini, New Delhi. Additionally, over 1 GWh of annual assembling capacity is already being set up for converting imported Li ion cells into battery modules by various Indian companies.
With India’s growing demand for energy and the need for clean energy sources, it is important to have a regular supply of renewable generated power. Therefore, battery storage is one sector that becomes increasingly vital for the country. Realising the vast opportunity, the government of India is making strides in providing a robust policy environment for the sector to grow and prosper. Additionally, the recent introduction of “Atmanirbhar Bharat” and “Vocal for Local” initiative coupled with the ambitious RE commitments, would make battery storage one of the most attractive sectors for investments in the future. To leverage the growing potential of this sector, we welcome you to come Invest in India!
By Saransh Roy – Senior Investment Specialist, Institutional & Infrastructure Investments, Invest India &
Kanika Verma – Associate, Renewable Energy & Power and Strategic Investment Research Unit, Invest India
