Key Highlights:
According to a recent report, India may forgo the construction of new coal plants and cap its coal capacity at currently planned levels by 2032. This scenario would be feasible if the cost of battery storage systems decreases by 15% annually. Currently, coal accounts for nearly 75% of India’s electricity generation. To achieve its target of attaining net-zero emissions by 2070, India must significantly reduce its reliance on coal and ramp up the utilization of renewable energy sources such as solar and wind power.
The intermittency of solar and wind power due to dependence on weather conditions necessitates using energy storage systems to store surplus energy. Limited growth in energy storage could impede the continued expansion of renewable energy in India after solar power surpasses 25% of the power mix. Currently, solar energy constitutes approximately 7% of India’s total power generation.
“And if BESS costs fall by 15 % on average each year, it would enable India to potentially limit its coal capacity to the 14th National Electricity Plan projection of 260 GW by 2032,” the report reads.
The report indicates that a rapid decrease in battery costs could lead to the power sector relying more on renewable energy sources, potentially meeting 83% of the electricity demand during the day by 2032. However, due to current storage limitations, renewable energy might only cover 38% of the demand during non-solar hours.
Furthermore, the report highlights the risks and challenges associated with building new coal capacity. It suggests that new coal plants would need to adjust their output more frequently, and if battery energy storage system (BESS) costs decrease faster than expected, these plants could face significant risks of being underutilized and locked into an outdated technology.
A K Saxena, senior director of electricity and renewables at the TERI, said: “Energy storage holds the key to the decarbonisation of electricity generation. A reduction in the cost of storage options would accelerate the energy transition in economies.”
Need to Reduce Battery Storage Cost
The report highlights that there may be no necessity for new coal additions if the Battery Energy Storage System (BESS) costs, excluding financing, decrease to approximately INR 60 lakh per megawatt-hour (MWh).
Although there have been notable decreases in BESS costs recently, the report emphasizes the need for a further reduction of over 50% from current levels to align with the least-cost pathway and to avoid the addition of new coal capacity, particularly for fulfilling non-solar demand.
Neshwin Rodrigues, an electricity policy analyst at Ember, emphasized the need for planners to develop strategies for integrating solar generation into non-solar hours in order to maintain momentum during the energy transition. This will entail not only leveraging the decreasing costs of battery storage but also prioritizing the expansion of annual renewable energy capacity, ensuring access to financing, and improving the flexibility of coal plants.
Nayeem Khan, a research associate at the TERI, said: “Accelerated growth in solar and wind, the development of pumped hydro projects and cost-competitive low-carbon technologies like BESS are essential for India to avoid new coal capacity.”
ELCTRIK Speaks
The key role of energy storage in decarbonizing electricity generation and the need for cost reduction to accelerate the energy transition are highlighted. The decreasing battery storage costs could lead to a shift towards renewable energy sources. To maintain momentum during the energy transition, it’s important to address challenges such as integrating solar generation into non-solar hours.
