All charged up: India’s battery storage plans

Source– The post is based on the article “All charged up: India’s battery storage plans” published in the “mint” on 21st September 2023.

Syllabus: GS3- Energy

Relevance- Issues related to energy storage infrastructure

News–  The article explains the scenario of battery energy storage system(BESS) in India.

What is BESS?

BESS are smart systems. They use algorithms to interact with the grid and make decisions regarding storing and releasing of surplus energy.

hese systems primarily utilize lithium-ion batteries due to their characteristics like, high energy density, decreasing costs, and extended lifespan.

How does a battery energy storage system work?

Battery energy storage systems (BESS) preserve energy generated from sustainable sources like sunlight and wind. It balances the supply and demand of renewable energy by releasing it into the grid when required.

Why is BESS critical for a global green switch?

Renewable energy sources have an intermittent generation patterns. It is because solar energy is available during day and heavy wind is also a seasonal phenomenon. It can cause abrupt surges or declines in power generation, leading to power outages.

It forces many utility companies to rely on fossil fuel-based power plants. BESS address this issue by enhancing grid stability.

Consequently, they offer the potential to decrease dependence on fossil fuels.

What is the current position of India in energy storage?

Current capacity- Currently, India has an energy storage capacity of only 37 megawatt-hours (MWh).

Requirement- To achieve India’s ambitious renewable energy goal of 500 gigawatts by 2030, the country will require battery energy storage systems with a combined capacity exceeding 200 gigawatt-hours (GWh).

Projection for future- According to projections by the International Energy Agency, India’s storage capacity is expected to reach 200 GWh by 2040. It will make it the largest in the world.

What’s the plan of India to scale up storage?

1) Recently, the government approved a program aimed at establishing a battery energy storage system (BESS) capacity of 4 gigawatt-hours (GWh) by the year 2030-31.

The scheme provides viability gap funding to developers, amounting to ₹3,760 crore. This funding, limited to 40% of the project’s cost, will be disbursed over a three-year period spanning from 2023-24 to 2025-26.

2) The government has introduced a production-linked incentive scheme worth ₹18,100 crore for the manufacturing of advanced cell chemistry batteries. This initiative is essential for achieving self-sufficiency in the production of lithium-ion batteries.

What’s happening on this front globally?

According to McKinsey, the investment in battery energy storage systems (BESS) reached $5 billion in 2022. It is three times the amount invested in 2021.

Global BESS market is currently valued at $55 billion. McKinsey anticipates that it will expand to reach $150 billion by 2030.

The cost of lithium-ion battery systems is projected to decrease from the current $151 per kilowatt-hour to $59/KWh by 2030

Experts predict that the annual installation of BESS will increase tenfold between 2022 and 2030. It will exceed 400 gigawatt-hours (GWh) annually by the end of this decade.