Crisil Ratings sees India's storage-backed renewable energy capacity at 25-30 GW by FY28

India’s installed capacity of storage-backed renewable energy is likely to increase to 25-30 GW by FY28 from almost nil in FY25, Crisil Ratings said Wednesday.

The incremental capacity will account for more than 20% of the total renewable energy capacity to be added over the three years, driven by the central government’s push to make renewables more sustainable, it said.

Energy storage provides an effective solution for the intermittent nature of renewable energy generation.

Such projects, which include firm and dispatchable renewable energy, solar with energy storage and others, supply power when required and support grid stability.

The projects can provide green power on a monthly or hourly schedule or at the peak hours of morning and evening, the agency said.

The government is pushing for these projects in a bid to make renewables a sustainable part of the country’s power mix, the agency said. It has led to higher volume of renewable energy with storage projects in recent tender auctions, forming 25% or 11 GW of the total capacity awarded through tenders by central agencies in 2024 against 11% or 2.5 GW in 2023.

Given the high energy requirements, the projects need an average oversizing to the extent of 2.5 times of contracted capacity, Crisil Ratings said.

This has resulted in a cumulative capacity pipeline of 34 GW, it added.

The entire capacity awarded through such tenders is either under development or at a nascent stage of construction, which exposes them to risks inherent in project implementation, it said.

Risks in these projects typically manifest in the form of delays in securing offtake agreements, funding and execution, it said.