New Delhi

The sharp decline in battery costs is expected to boost the share of generation from the renewable energy (RE) capacity, including large hydro, to 40 per cent of the all-India electricity generation by FY2030 from less than 25 per cent currently, driven by the large capacity addition under way, credit rating agency ICRA said on Thursday.

Battery prices reached an all-time low in 2023 led by the moderation in raw material prices amid the increase in production across the value chain, the agency said in a report.

Achieving such a high renewable energy share would require development of energy storage systems (ESS) to manage the intermittency associated with wind and solar power. The ESS is currently mainly driven by the battery energy storage systems (BESS) and pumped hydro storage projects (PSP). The recent appreciable decline in battery costs is expected to speed up the adoption of BESS projects, it said.

The ESS also plays a role in improving grid stability, providing ancillary support services and peak load shifting. After the notification of the bidding guidelines by the Ministry of Power for BESS projects, there have been multiple bids called by Central nodal agencies and state distribution utilities. The tariff under these bids is fixed and payable based on the availability and round trip efficiency.

Commenting on the bidding trends, Girishkumar Kadam, Group Head – Corporate Ratings, ICRA, said.