Ministry Of Power Advisory On Co-Locating Energy Storage Systems With Solar Power Projects To Enhance Grid Stability And Cost Efficiency

India aims to achieve 500 GW of non-fossil fuel capacity by 2030, requiring significant expansion of renewable energy sources like solar and wind. These sources, however, pose challenges to grid stability due to their intermittent nature, leading to periods of low generation during high-demand hours. Energy storage systems are seen as a critical solution to this issue, ensuring grid stability and efficient energy utilization. Storage systems can store excess energy when renewable generation is high and supply it when generation is low, improving overall reliability.

As of December 2024, the country has an installed energy storage capacity of 4.86 GW, including 4.75 GW of pumped storage projects and 0.11 GW of battery energy storage systems. According to the National Electricity Plan, to support the integration of 364 GW of solar and 121 GW of wind capacity by 2031-32, India will require 73.93 GW of storage capacity, which includes both pumped storage and battery storage. To meet this goal, it is recommended that renewable energy agencies and state utilities include a minimum of two-hour energy storage, equivalent to at least 10 percent of a solar project’s capacity, in future solar tenders. This step will help address the intermittency of renewable energy while supporting the grid during peak demand periods.

To ensure that storage is available when solar generation is low, a compliance mechanism may be included in the bidding documents. Distribution licensees may also consider requiring two-hour storage for rooftop solar installations. This will not only improve supply reliability for consumers but also help manage the over-injection of solar power into the grid during peak generation hours. By implementing these measures, around 14 GW or 28 GWh of storage capacity could be added by 2030. The recent reduction in battery prices could further reduce power purchase costs, particularly during evening hours when solar generation is unavailable, and energy prices in the exchange are higher.

Storage systems can operate in different modes. In a single-cycle operation, storage is charged using co-located solar power and discharged during evening hours. In a double-cycle operation, storage can be charged not only with solar power but also with grid electricity during low-demand hours and discharged during peak hours, especially when solar generation is insufficient. This flexibility can help optimize energy use and reduce stress on the grid.

Integrating storage systems with solar projects will not only enhance grid stability but also provide long-term economic advantages. It will improve the efficiency of transmission infrastructure by allowing better evening-time utilization of lines constructed for solar power evacuation. This, in turn, will help reduce the need for additional transmission infrastructure, lower associated costs, and improve energy security. The overall efficiency of renewable energy systems will also be enhanced, making clean energy more viable and sustainable in the long run.

The adoption of storage systems alongside solar power projects represents a crucial step in ensuring the stability and cost-effectiveness of renewable energy. By making storage an integral part of solar tenders and distribution networks, India can effectively manage the growing share of renewable energy while maintaining grid stability and reducing electricity costs. These measures have been approved by the relevant authorities, marking a significant policy step towards a more resilient and efficient energy future.