The Central Electricity Authority (CEA) has called on the Indian government to implement targeted incentives for the domestic production of essential battery components. These components include battery management systems (BMS), fire protection systems, liquid cooling solutions, and battery energy storage system (BESS) containers. Enhancing the domestic manufacturing of these components is crucial for improving grid stability as India strives to achieve its ambitious target of 500 GW of non-fossil energy by 2030.
This recommendation was made in a recent report following a high-level workshop titled ‘Renewable Energy (RE) Integration through Energy Storage Systems (ESS)’, which took place in New Delhi. The report emphasized India’s current reliance on Chinese imports due to the lack of a dedicated incentive scheme for battery components.
The workshop gathered stakeholders from the Ministry of New and Renewable Energy (MNRE), public sector undertakings, distribution companies (discoms), renewable energy developers, and BESS manufacturers. Besides advocating for fiscal incentives, the CEA proposed the establishment of a national-level testing and certification laboratory for BESS. This facility would ensure compliance with evolving safety and performance standards, bolstering the credibility and global competitiveness of domestically produced systems.
The CEA is also expected to introduce new regulations addressing the construction, connectivity, and safety standards for BESS infrastructure. According to the report, BESS installations have shown significant potential to enhance overall grid performance by facilitating the integration of intermittent renewable sources, reducing reliance on coal-fired plants, and offering long-term cost savings through optimized generation and transmission.
In 2023, the Indian government announced a scheme worth INR 3,760 crore to support the manufacturing of large-scale batteries for grid storage. However, there remains a lack of parallel policy support for key components. The CEA cautioned that this gap could undermine India’s clean energy storage ambitions, underscoring the need for immediate action to address this missing link in the value chain.
The authority also highlighted a notable decline in solar plus BESS tariffs, dropping from INR 6.99 per unit in August 2018 to INR 3.09 per unit in September 2024, showcasing improved cost-effectiveness. A mandatory requirement for all new grid-connected solar power projects to incorporate at least two hours of storage further strengthens the case for accelerated domestic scaling.
The CEA pointed to the successful implementation of a battery-integrated solar project on Kavaratti Island in Lakshadweep, which has significantly reduced reliance on diesel power. This hybrid system generates 2.08 million units annually, stabilizing the grid during peak loads and more than doubling the output of the previous 700 kW plant.
In light of these advancements, the CEA is advocating for the replication of similar solar plus BESS projects across India’s island territories and remote regions, asserting that battery-integrated renewable energy solutions represent the future of sustainable power for the country.
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