Rapid Solar And Storage Deployment Essential To Address India’s Projected 50-80 GW Power Shortages – Report

India is likely to face significant evening power shortages by 2027 due to rapidly increasing electricity demand. Despite the planned addition of thermal and hydro capacities, the gap between supply and demand will continue to widen, with projected shortages reaching 20-40 GW. The primary strategy to prevent these shortages involves the rapid deployment of solar and energy storage systems, which can be established more quickly than traditional power sources.

In 2024, India’s electricity demand saw substantial growth, particularly during peak periods. For instance, in May 2024, peak demand reached 250 GW, causing considerable stress on the power system. The period following COVID-19 showed a marked increase in demand, with peak figures rising by 46 GW in just two years, from 204 GW in May 2022 to 250 GW in May 2024. The availability of renewable energy (RE) during peak hours was limited, highlighting the need for firm capacity to ensure grid reliability. Despite having over 140 GW of renewable capacity, only 8-10 GW was available during evening peaks in early May 2024.

By 2027, evening peak demand is projected to increase by 50-80 GW, potentially exceeding 300 GW. This surge necessitates a significant expansion in non-variable renewable energy (non-VRE) firm capacity. Currently, around 41 GW of non-VRE firm capacity is under construction and scheduled for commissioning by 2028. However, even with this addition, significant evening shortages are anticipated if the demand continues to grow at current rates.

Solar and storage deployment offers a viable solution to these challenges. Simulations indicate that by adding 100-120 GW of new solar capacity, co-located with 16-30 GW of storage, the system can avoid power shortages. Storage systems with 4-6 hours of capacity are particularly crucial, as they can supply power during evening peaks when solar generation declines. This approach is not only feasible but also economical. Recent auctions for large-scale solar and storage projects in India have yielded record-low prices, with bids as low as ₹3.4/kWh, demonstrating the cost-effectiveness of this strategy.

The expansion of solar and storage requires robust policy support to ensure rapid deployment. Fiscal incentives and mandates are essential to encourage investment and development at the necessary scale. Without such support, achieving the required capacity in the short time frame may be challenging.

Looking further ahead, India’s electricity demand is expected to quadruple by 2047, necessitating a massive increase in low-cost renewable energy and storage to keep consumer bills manageable and support sustainable economic growth. This long-term perspective underscores the importance of immediate action to expand renewable energy and storage infrastructure.

The conclusion emphasizes the critical role of energy storage in avoiding imminent power shortages in India. Rapid deployment of storage combined with solar energy is the main option to meet the rising demand and ensure grid stability. The economic feasibility of this approach, coupled with supportive policies, will be crucial in achieving these goals. As India’s electricity demand continues to grow, large-scale adoption of solar and storage solutions will be essential to maintaining a reliable and sustainable power supply.