India is poised to become the third-largest market globally for utility-scale battery systems by 2030, with expected capacity reaching almost nine GW. The growth is spurred by declining costs, as highlighted in an International Energy Agency (IEA) report. The report indicates that solar PV coupled with battery storage is economically viable than coal in India, a trend likely to persist.
As India enhances its solar PV infrastructure, the demand for short-term energy flexibility will rise, emphasizing the importance of storage solutions. The Indian government requires wind and solar PV installations to include storage capacity equivalent to at least five percent of their total capacity.
According to the IEA report, if India achieves its set energy targets on time, solar PV and battery storage will form the cornerstone of the national power grid by 2050, with batteries charging during high solar output and discharging during peak evening demand.
India’s consumption of natural gas is expected to exceed 64 billion cubic meters (BCM) by 2024. Globally, the initial costs for four-hour utility-scale battery storage are anticipated to reduce from an average of $290/kWh in 2022 to $175/kWh by 2030, a decline of 40%. This cost reduction is particularly significant in India due to the rapid expansion of its battery storage market.
Significant advancements in battery technology and manufacturing have led to a dramatic decrease in the average cost of batteries, dropping from $1,400/kWh in 2010 to below $140/kWh in 2023. This represents one of the sharpest declines in cost across any energy technology sector.
China has emerged as the leading market for battery storage, accounting for 55% of global additions in 2023, up from about 20% in 2019. Meanwhile, the US has also seen considerable growth, doubling its battery storage additions to more than 8 GW in 2023.
As reported by businessline, in the European Union, installed capacity grew by 70% in the same year, with nearly six GW added. The IEA report suggests that with its ambitious storage targets and supportive fiscal policies, India has the potential to become a key player in the global battery storage market.
