Grid Stability and Energy Storage: India's Roadmap to 2032
UPSC / SSC current affairs note · IR
Why in news
The National Electricity Plan (Generation) notified in May 2023 estimates significant battery energy storage and pumped storage capacity requirements by 2026-27 and 2031-32, requiring investments of ~₹3.49 lakh crore and ~₹1.29 lakh crore respectively. The government has initiated a series of policy, regulatory, demand-side, and supply-side measures to promote energy storage systems, crucial for integrating renewable energy and ensuring grid stability.
Background
Energy storage systems (ESS) are critical for managing the variability of renewable energy sources like solar and wind. India aims to increase renewable energy capacity, necessitating large-scale storage to balance supply and demand. The government has been progressively introducing policies to support ESS deployment, including amendments to electricity rules, inclusion in infrastructure lists, and tariff-based competitive bidding guidelines.
Key facts
Battery Energy Storage System (BESS) capacity requirement: 8.68 GW/34 GWh by 2026-27 and 47.24 GW/236 GWh by 2031-32.
Pumped Storage Plant (PSP) capacity requirement: 7.45 GW/47 GWh by 2026-27 and 26.69 GW/175 GWh by 2031-32.
Estimated investment needed: ~₹3.49 lakh crore for BESS and ~₹1.29 lakh crore for PSP by 2031-32.
Electricity Rules amended in December 2022 to recognize ESS as integral part of the power system.
ESS included in Harmonized Master List of Infrastructure in October 2022 for easier financing.
National Framework for Energy Storage Systems released in September 2023.
100% ISTS (Inter-State Transmission System) charges waiver for BESS projects commissioned by June 2025, with 25% annual reduction thereafter; extended to co-located BESS projects commissioned by June 2028.
CERC allowed storage-based resources to provide ancillary services including secondary and tertiary reserves since January 2022.
Tariff-Based Competitive Bidding (TBCB) guidelines notified for procurement of BESS and PSP.
Electricity (Rights of Consumers) Rules, 2020 amended in December 2022 mandates consumers using diesel generators to switch to clean backup solutions including energy storage.
Prelims pointers
- National Electricity Plan (Generation) notified May 2023
- Battery Energy Storage System (BESS)
- Pumped Storage Plant (PSP)
- ISTS charges waiver
- Harmonized Master List of Infrastructure
- CERC (Central Electricity Regulatory Commission)
- Tariff-Based Competitive Bidding (TBCB)
- Electricity (Rights of Consumers) Rules, 2020
- High-Price Day-Ahead Market (introduced March 2023)
- Viability Gap Funding (VGF) for 43.8 GW BESS capacity
Mains angles
- Discuss the role of energy storage in integrating renewable energy and ensuring grid stability in India.
- Critically examine the government's policy measures to promote energy storage systems and their effectiveness.
- Analyze the investment requirements and financing challenges for achieving India's energy storage targets by 2032.
- Evaluate the regulatory framework for energy storage in India, including amendments to Electricity Rules and CERC regulations.