India Powers Up: Surge in Battery Energy Storage Sparks Renewable Growth

India is expanding its battery energy storage to meet rising evening electricity demands, with capacity hitting 2.7 GW/7.5 GWh. HSBC reports a robust 42 GWh project pipeline, anticipating major growth over three years. Elevated power demand, solar growth, and enhanced grid reliability underscore the sector's positive trajectory.

India is boosting its battery energy storage capacity to meet increasing electricity demands during evening peaks, particularly amid heatwaves, as highlighted by a recent HSBC Global Investment Research report. The operational Battery Energy Storage System (BESS) capacity now stands at 2.7 GW/7.5 GWh, with significant expansions noted in May.

The report states that energy storage systems, including BESS and pumped storage projects, contributed around 4.5 GW during the peak demand time of approximately 240 GW on June 2. HSBC emphasized a strong storage pipeline of around 42 GWh under construction and a further 40 GWh awarded, projecting substantial capacity growth over the next three years as India enhances grid reliability and bolsters renewable energy.

Power demand surged during summer, with an 8.5% increase noted in early June and peak demand reaching around 260 GW, following a record peak of 271 GW in May, attributed to delayed monsoon rainfall and relentless heatwaves. Meanwhile, renewable energy capacity, particularly solar, experienced tempered growth after a strong start to the year, with the onset of the Approved List of Models and Manufacturers (ALMM) affecting module supply dynamics.

While tighter domestic cell supplies may impact solar projects, HSBC maintains a positive outlook for India's long-term renewable energy and storage sectors, supported by continuous capacity expansion. The report indicates strong future growth potential as the sector navigates current supply chain pressures.