Energy Storage Key to Boosting Renewable Energy in India: Icra

New Delhi, May 2 (PTI) Energy storage systems are critical to increase the share of power generated through renewable energy sources, according to Icra.

The share of renewable energy power generation, including large hydro, to India's total power production will increase to close to 40 per cent by FY2030 from less than 25 per cent currently, the rating agency said in a report.

The increase will be driven by the large RE capacity addition process, it said.

"Achieving such a high level of RE share would require development of energy storage systems (ESS) to manage the intermittency associated with wind and solar power. The ESS is currently mainly driven by the battery energy storage systems (BESS) and pumped hydro storage projects (PSP)," Icra said.

The BESS also plays a role in improving grid stability, providing ancillary support services and peak load shifting, it said.

Girishkumar Kadam, Senior Vice President & Group Head - Corporate Ratings, ICRA, said: "The discovered tariff under the BESS tenders more than halved from Rs 10.84 lakh/MW/month in the first Solar Energy Corporation of India (SECI) tender in August 2022 to Rs 4.49 lakh/MW/month in the latest tender by Gujarat in March 2024, reflecting the decline in battery prices and improving competitiveness of such projects. The viability of these projects remains pegged to the capital cost of the BESS.