India is the world’s third-largest electricity producer and consumer, and its electricity demand is growing rapidly as industrial activity expands, population increases and electrification increases. India will achieve “zero emissions” in 2070. From now to 2030, it plans to reduce a total of 106 tons of carbon emissions and increase non-fossil fuel power generation capacity represented by wind power and photovoltaic power generation to 500GW. In the future, energy storage india market will be great development.
Ambitious renewable energy plan
In 2023, India’s Central Electricity Authority (CEA) released the latest National Electricity Plan (National Electricity Plan 2022-2032), which clearly stated that the cumulative installed capacity of renewable energy is expected to reach 336.6GW (2026-27) and 596.3GW (2031). -32 years). Among them, in 2026-27, the installed wind and solar capacity is expected to reach 72.9GW and 185.6GW respectively; and by 2031-32, it will reach 121.9GW and 364.6GW respectively.
Based on electricity demand, CEA predicts that future energy storage india demand will reach 16.13GW/82.37GWh in 2026-27 and 73.93GW/411.4GWh in 2031-2032. It is worth mentioning that this forecast is significantly higher than the 27GW/108GWh energy storage india demand previously estimated by CEA in 2030, and is also higher than the 160GWh grid-scale energy storage india demand predicted by the Indian Energy Storage Association IESA Vision 2030.
Energy storage deployment is still in its beginning stage
According to statistics, by the end of 2023, the scale of energy storage in India is expected to be about 6 GW, of which the vast majority are pumped hydro storage projects, nearly 5.8 GW, and electrochemical energy storage projects of about 140 MW.
India began to have larger pumped storage projects put into operation as early as 1988 (Tamil Nadu-Kadamparai 400MW pumped storage hydropower station), but subsequent growth stagnated until around 2000 when new projects were put into operation. According to statistics, between 2000 and 2023, India has added 7 new pumped hydro energy storage projects, totaling 5.6GW.
Electrochemical energy storage projects first entered the market in 2012. Different electrochemical energy storage projects such as lead-acid batteries, vanadium flow batteries, and supercapacitors (such as: Rajasthan-Gram Power Khareda Lakshmipura Microgrid 40KW lead-acid battery energy storage ; Madhya Pradesh-Sun-carrier Omega Net Zero Building 45 KW Vanadium Flow Battery Energy Storage).
At present, energy storage deployment in India is still in its early stages, and the installed capacity is limited. Driven by multiple factors such as the continuous increase in new energy installed capacity and energy storage support policies, Indian energy storage projects are expected to accelerate the development and implementation in the future.
According to incomplete statistics, the scale of energy storage projects to be put into operation in India (including projects under planning, bidding, and construction) reaches 35.6GW, of which electrochemical energy storage projects are about 6.4GW and pumped hydro energy storage projects exceed 29GW. It should be noted that some projects are announced intended development projects and are in a very early stage, and there is uncertainty about their actual implementation.
Judging from the current project deployment, the scale of pumped hydro energy storage projects to be put into operation is higher than that of electrochemical energy storage, and is not as good as the energy storage demand forecast mentioned in CEA’s latest national power plan. However, the proportion of electrochemical energy storage projects continues to increase.
Tesla plans to enter energy storage india
According to reports, Tesla has formulated an energy storage expansion plan to produce and sell battery energy storage systems in India, and submitted a proposal to Indian officials requesting the government to provide incentives for factory construction.
It is understood that Tesla has been planning to build a new new energy vehicle factory in India in the past few weeks and plans to directly supervise Prime Minister Modi. However, so far, the progress of this matter has not been reported.
Tesla’s expectations for the expansion of India’s energy storage business are higher than that of new energy vehicles.
Currently, Tesla is leaning more towards the Indian residential and industrial energy storage market. At a recent conference in New Delhi, for example, Tesla proposed supporting India’s battery storage capabilities with its “Powerwall” system that can store solar or Electricity from the grid for use at night or during power outages. If the plan is successful, Tesla may consider developing gridscale energy storage systems for industry.
Although Tesla has asked the government to provide some incentives to build battery energy storage factories, Indian officials said these measures will not be approved, but the government can provide subsidies to energy storage users to help Tesla product sales , but Tesla still needs to work hard to reduce the cost of its energy storage products, adding that the government may help Tesla open markets with high demand.
In addition, sources also said that although Tesla and the Indian government are still keen on the proposal and New Delhi is continuing to review it, it is not yet certain whether the plan will be successfully passed and multiple policy-level approvals are still required.
Energy storage india market analysis and development
Based on the estimated capacity of the Indian wind power and photovoltaic market from 2021 to 2030, the market size of large-scale lithium-ion battery energy storage power stations in this industry is estimated, as follows:
(1) The new photovoltaic capacity is about 107GW;
(2) The new wind power capacity is approximately 64GW;
(3) Proportion of ground photovoltaic power stations: 60%;
(4) Capacity proportion of electrochemical energy storage system: 5% to 10%;
(5) Average continuous discharge time of energy storage battery: 2h;
(6) Average unit price of lithium-ion energy storage power stations: 1.5 to 2.0 yuan/Wh;
From the above, it can be seen that the battery energy storage market size of India’s wind power and photovoltaic power generation industry from 2021 to 2030 is equivalent to approximately RMB 1.92 billion to 5.13 billion yuan per year, which is a very considerable market size.
Affected by the COVID-19 epidemic, India has suffered its largest economic contraction in history, and power demand has grown less than expected. India’s state-owned solar energy company has withdrawn the power guarantee purchase terms of multiple photovoltaic projects. In addition, the Indian government has increased import tariffs on photovoltaic modules since August 2020 (about 80% of photovoltaic modules are produced in China), which has increased the construction costs of photovoltaic projects and affected Enthusiastic in executing successful projects and bidding on new projects.
In addition, it is judged that the current construction progress of wind power and photovoltaic power generation projects in India is seriously lagging behind, and it is expected that it will be difficult to achieve the goals of wind power installed capacity of 60GW and photovoltaic installed capacity of 100GW in March 2022.
In the field of battery energy storage in India, there are established PCS converter companies such as Siemens and Bosch of Germany, ABB of Switzerland, Eaton Electric of the United States, NEC of Japan, and Schneider of France, as well as Toshiba and Panasonic of Japan, Tesla of the United States, Samsung, LG, and Mainstream lithium battery suppliers such as SK, as well as energy companies and project general contractors with comprehensive strength such as AES in the United States, RES in the United Kingdom, L&T, Greenko, Bhel, Adani in India, etc. Top best suppliers will face huge competitive pressure if they want to survive in the Indian energy storage industry.
India’s large-scale battery energy storage projects are all funded by the government. Their funding sources are self-raised by the Indian government or third-party bank loans (ADB or World Bank). The tenderers are divided into two categories: the central government and local state governments. The bidding forms for energy storage projects are divided into two categories: light (or wind) and storage bundled bidding, and separate bidding for energy storage projects. It should be noted that energy storage solution have different requirements for bidders’ operating performance and company capital scale.
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