India ripe for battery storage investments to power 'solar revolution', says IEA

by Margaret Lau
PM Narendra Modi said in 2020 that India can be 'a preferred investment destination' for battery manufacturing. Photo: PM's office
Battery storage capacity in India could rise to between 140GW and 200GW by 2040, to underpin an expected "solar-powered revolution”, according to a new report.

The country’s enormous potential for battery investment is outlined in a special report by the International Energy Agency (IEA) – ‘India Energy Outlook 2021’, which says that solar, combined with batteries, "will play a massive part in India’s energy future”.

The report comes just weeks after India’s government launched a battery manufacturing incentives scheme, to attract international and domestic players to develop giga-scale advanced cell production facilities in the country.

According to the IEA’s report solar power, which currently accounts for less than 4% of India’s electricity generation, could match the share of coal (currently near 70%) in the national energy mix "within two decades or sooner”, under various development scenarios.

'Dramatic turnaround'

By 2040, under the IEA’s ‘stated policies scenario’ (STEPS), the report forecasts solar and coal could converge at around the 30% level. This "dramatic turnaround would be driven by India’s policy ambitions, notably the target to reach 450GW of renewable capacity by 2030, and the extraordinary cost-competitiveness of solar, which out-competes existing coal-fired power by 2030 even when paired with battery storage”.

Under STEPS, installed solar capacity would exceed 700GW by 2040, "enough to meet nearly a third of India’s power demand”. This rate of growth would be supported by the wide‐scale deployment of batteries, the report says.

The scenario would see India’s leadership in the deployment of clean energy technologies expand its market for solar PV, wind turbine and lithium-ion battery equipment to more than $40bn annually by 2040.

Meanwhile, under the IEA’s ‘sustainable development scenario’, the equipment market for solar, wind, batteries and water electrolysers could rise to $80bn annually from around 2040.

Click on the link below for details of the report:

India Energy Outlook