India’s Ministry of Power (MoP) has issued a significant regulatory update requiring all new solar photovoltaic (PV) power tender projects to be equipped with at least 2 hours of co-located energy storage systems (ESS), with a capacity of 10% of the installed solar project capacity. This new regulation will positively impact India’s renewable energy sector.
The new rule applies to both institutional and state-level utility PV tender projects. The proposal is directed at all renewable energy implementation agencies (REIA) and state-level utility companies, mandating the inclusion of this storage requirement in future solar tenders. Distribution license holders are also authorized to mandate 2 hours of energy storage in rooftop solar plants to enhance supply reliability and avoid excess power injection into the grid during solar generation, thereby reducing pressure on distribution companies.
Implementing agencies can choose to operate the energy storage systems in either single-cycle or dual-cycle mode. In single-cycle operation, the ESS will charge using co-located solar power and discharge energy in the evening. In dual-cycle operation, in addition to charging from solar power, the ESS can also charge from the grid during off-peak demand periods and discharge during peak usage hours.
The MoP stated, “This requirement will help mitigate intermittency issues and provide critical support during peak demand periods.” With a significant amount of renewable energy soon to be integrated into the grid, ensuring grid stability, reliability, and optimal energy utilization will become crucial.
The MoP anticipates that, due to this new storage clause, about 14GW/28GWh of energy storage systems will be installed in India by 2030. As the price of energy storage batteries declines, it is expected to help reduce evening power purchase costs, when solar power is unavailable and energy prices in the power trading market are higher.
As of December 31, 2024, India’s installed energy storage capacity was 4.86GW, of which 4.75GW was pumped storage power (PSP) and 0.11GW was battery energy storage systems (BESS). According to MoP estimates, India’s energy system will require 73.93GW/411.4GWh of storage capacity (including 26.69GW/175.18GWh of PSP and 47.24GW/236.22GWh of BESS) by 2031-2032 to complement 364GW of solar and 121GW of wind energy.
India aims to achieve an installed non-fossil energy capacity of 500GW by 2030, with solar PV expected to contribute 280GW. Recently, India reached the milestone of 100GW of cumulative solar PV installed capacity, and according to data from the Ministry of New and Renewable Energy (MNRE), another 84.10GW is under construction and 47.49GW is being tendered.
