India is on track to revolutionise the global utility-scale battery market, poised to claim the mantle as the world’s third-largest market for such batteries by 2030, according to a recent report by the International Energy Agency (IEA).
The report forecasts a rapid acceleration in capacity additions over the next seven years, with India projected to install nearly 9 GW of utility-scale battery capacity. Advancements in battery chemistry and manufacturing have catalysed a significant decline in average battery costs, making solar PV plus battery storage more cost-competitive than coal in India. This trend is expected to persist, fuelled by the country’s burgeoning solar PV capacity, which necessitates higher short-term flexibility requirements and underscores the pivotal role of energy storage. To bolster energy resilience and meet evolving power grid demands, the Indian government has mandated that wind and solar PV projects integrate at least 5% of their installed capacity with storage. This directive reflects a strategic shift towards leveraging renewable energy sources in tandem with battery storage to optimise grid stability and reliability.
The IEA report emphasises that if India stays on course to achieve its government-set targets, solar PV coupled with battery storage will emerge as the cornerstone of the country’s power grid by 2050. Battery systems will play a crucial role in storing excess solar energy during peak hours and discharging it during periods of high demand, thereby enhancing grid flexibility and efficiency. Globally, the upfront costs of utility-scale battery storage are projected to witness a substantial reduction, dropping from a global average of $290/kWh in 2022 to $175/kWh in 2030, driven by technological advancements and economies of scale. India’s robust growth trajectory in the battery storage market is a key driver behind these cost reductions.
Notably, India’s battery storage market has witnessed remarkable growth, leading to a steep decline in average battery costs from $1,400/kWh in 2010 to under $140/kWh in 2023. This rapid cost decline underscores India’s emergence as a major player in the global energy storage landscape. While China currently holds the title of the leading market for battery storage, followed closely by the US and the European Union, India’s ambitious energy storage targets and supportive policy measures position it as a promising contender for significant market share in the near future. As India continues to prioritise renewable energy integration and invest in energy storage infrastructure, it is poised to drive the next phase of innovation and growth in the utility-scale battery market on a global scale.
