India has set an ambitious target of achieving 500 GW of non-fossil fuel capacity by 2030. To accomplish this goal, the country must significantly expand its variable renewable energy capacity, including solar and wind power. However, the inherent intermittency and variability of these sources pose challenges to grid stability, making the integration of energy storage systems (ESSs) crucial for a reliable and resilient power supply. Recognising this need, in a key development, the Central Electricity Authority (CEA) recently issued an advisory on co-locating ESS with solar power projects. This measure aims to enhance grid stability, improve cost efficiency and ensure a steady energy supply during periods of low
renewable energy availability or high electricity demand.
Power Line takes a closer look at the advisory and implications for the sector…
Details of the CEA advisory
To facilitate the large-scale integration of renewable energy, the CEA has recommended that renewable energy implementing agencies and state utilities include co-located ESSs in upcoming solar tenders.
The advisory specifies that storage capacity equivalent to 10 per cent of the installed solar project capacity, with a minimum duration of two hours, should be mandated. Further, the tender documents should include a clear compliance mechanism to ensure the availability of stored energy during non-solar hours.
This approach is expected to improve grid reliability during peak demand periods while also optimising the utilisation of renewable energy sources. Additionally, distribution licensees could consider requiring rooftop solar installations to include a minimum of two-hour energy storage. This would not only enhance supply reliability for consumers but also reduce the burden on distribution networks by curbing excess power injection during peak solar generation hours.
ESSs can operate in two distinct modes. In single-cycle operation, they can charge exclusively from the co-located solar power plant and discharge during evening hours. In double-cycle operation, they can charge from both the co-located solar plant and the grid during periods of low demand, allowing for discharge during peak hours when solar generation is unavailable.
Impact
ESSs are vital in mitigating the challenges associated with renewable energy integration. By storing surplus energy generated from renewable sources, an ESS helps bridge the gap between generation and demand, ensuring a steady and dependable power supply. This capability is particularly important for balancing supply fluctuations and optimising energy usage in India’s rapidly expanding renewable
energy landscape.
As per the CEA, as of December 31, 2024, India’s installed ESS capacity stands at 4.86 GW, comprising 4.75 GW of pumped storage plants (PSPs) and 0.11 GW of battery energy storage systems (BESSs). According to the National Electricity Plan published by the CEA, India will require 73.93 GW/411.4 GWh of storage capacity (26.69 GW/175.18 GWh from PSPs and 47.24 GW/236.22 GWh from BESS) by 2031-32 to accommodate 364 GW of solar and 121 GW of wind capacity.
The government has been taking several measures to promote energy storage and drive the adoption of BESS, such as providing legal status to storage, introducing the energy storage obligation, waiver of interstate transmission system charges, and granting captive status for energy stored in BESSs.
As per the CEA, implementing the proposed storage requirements could result in the installation of approximately 14 GW per 28 GWh of energy storage capacity by 2030. Furthermore, the declining costs of battery technology may help lower power procurement expenses, particularly during evening hours when solar generation is absent, and energy prices on the exchange are elevated. The storage cost of using BESS has declined from over Rs 8-Rs 9 per unit in 2022 to Rs 6-Rs 7 per unit in 2024. As per industry estimates, 2.5 GW/4.9 GWh solar and BESS projects are currently under tendering, while 4.6 GW/6.7 GWh of tenders have been awarded. All tenders have a storage duration of two to four hours, with an average ESS penetration of 50 per cent.
Overall, the CEA advisory has been welcomed by the industry, as integrating ESSs with solar power projects offers significant long-term benefits beyond grid stability. It enables better utilisation of transmission infrastructure during evening hours, reduces the need for additional transmission capacity and associated costs, enhances energy security, and improves the overall efficiency of renewable energy systems. As India moves forward in its clean energy transition, co-locating ESSs with solar projects will be instrumental in achieving a stable, reliable and cost-effective
power sector.
Aastha Sharma