Energy storage key to saving consumers Rs 60,000 crore annually in power costs, IECC study finds

BATHINDA: India has achieved a major clean energy milestone—crossing 50% of installed power capacity from non-fossil sources five years ahead of schedule. With a rapid energy storage scale-up in the coming years, the country can consolidate this leadership, meeting its 2030 goals at the lowest cost, and lower power prices even as demand increases by nearly 50%, finds a new study by India Energy and Climate Centre (IECC) at the University of California, Berkeley and the Power Foundation of India.

The report, ‘Strategic Pathways for Energy Storage in India Through 2032’, finds that deploying 500 GW of clean energy capacity by 2030 and over 600 GW by 2032 is India’s most cost-effective path. Achieving this will require about $380 billion (Rs 30 lakh crore) in new investment by 2032 across power generation and grid infrastructure. India will need 61 GW (218 GWh) of energy storage by 2030 and 97 GW (362 GWh) by 2032—a massive leap from today’s 6 GW (mostly pumped hydro).

“We’re already about halfway to our 500 GW target,” said Dr Nikit Abhyankar, lead author of the study and Co-Faculty Director of IECC. “The next step is to scale energy storage at unprecedented speed to make clean power available around the clock. This will require $40-50 billion (Rs 3-4 lakh crore) of investment in storage by 2032, but the payoff is enormous: consumers could save nearly $7 billion (Rs 60,000 crore) every year in power costs.

To get there, India will need bold policy and market action.” The analysis shows that clean power paired with storage is now the cheapest way to meet demand. Battery prices have fallen 65% since 2021, enabling solar plus storage projects to deliver firm power during peak periods at Rs 3–Rs3.5/kWh, with construction timelines of just 18–24 months—far cheaper and faster than building new thermal power plants. Several new pumped hydro projects are also emerging at similarly competitive prices.

As a result, by 2032, average power procurement costs for discoms could decline in real terms, if storage targets are achieved. Srikant Nagulapalli, Additional Secretary of the Ministry of Power and Director General of the Power Foundation of India, said, “Energy storage is at the core of India’s clean energy vision. It’s the backbone of a flexible, resilient power system that can handle peak loads, harness the full potential of renewables, and support grid stability.

This study offers practical, affordable ways to roll out storage and provides the clarity needed to help us move faster and smarter toward our shared goals.

” The study also finds that the grid can remain reliable through 2032, with energy storage meeting peak demand and adding the flexibility needed to balance variable solar and wind generation. Existing and under-construction thermal power plants will supply base load and back up the system when renewable output dips.

However, by 2032, between 50–70 GW of costly thermal capacity—roughly 25–30% of today’s fleet—is expected to run at less than a 30% utilization rate (plant load factor), raising the risk of stranded assets.

The study stresses that rapid scale-up will only be possible with the right policy, regulatory, and market frameworks—including storage obligations for discoms, incentives for co-located projects, clear market rules for revenue stacking, and support for domestic manufacturing.

It notes that India’s battery manufacturing base is already expanding, with more than 200 GWh of capacity expected by 2030. Backed by the Production-Linked Incentive (PLI) scheme, viability gap funding (VGF), battery recycling, and critical mineral sourcing, this manufacturing drive will be essential to meeting the nation’s storage needs while strengthening energy independence and clean technology leadership.

“We have proven we can scale renewables,” Abhyankar added. “Now the challenge is grid flexibility. Energy storage is how we achieve it—and how India secures a reliable, low-cost, and independent energy future.” The study was funded by Sequoia Climate Foundation. Other authors include Umed Paliwal, Himanshu Chawla, and Sambit Basu.