The engineering, procurement and construction (EPC) cost of battery storage is expected to reduce by 15-20 per cent to fall in the range of $250-$270 per kilowatt hour (kWh) by 2021 from the present range of $300-$320 per kWh, according to research firm JMK Research & Analytics.
“With falling battery prices, the cost of peak tariffs is also anticipated to come down significantly in the next few years,” the research firm said in a report.
According to the Central Electricity Authority, about 34 gigawatt (GW)/136 GWh of battery storage is needed to be installed by 2030 in order to achieve the country’s renewable energy target of 460 GW. Meanwhile, in the past one year, India has seen a surge in issuance of storage tenders — both big and small.
The firm said in order to give the required impetus to the storage market, policymakers should devise policies to benefit all the stakeholders.
“Presently, there is a lack of clarity about the functional classification of energy storage as it is both a generator and a consumer of electricity. Changes to the existing regulatory framework are required to provide an identity to Energy Storage which is yet to find a mention in the Electricity Act 2003,” it added.
The research firm also said energy storage should be allowed as an essential regulatory asset for discoms, which would help them recover costs from its customers.
Last week SECI, a part of the ministry of new and renewable energy, had successfully auctioned 1,200 megawatt (MW) renewable energy storage tender with guaranteed peak power supply. Under this, Hyderabad-based Greenko and Goldman Sachs-funded ReNew Power had won 900 MW and 300 MW of projects, respectively.
While Greenko will opt for pumped hydro storage with 450 MWh capacity, ReNew is planning a battery energy storage system rated capacity of 150 MWh.