Storage costs and renewable energies: critical levers for India

Falling battery storage costs and the accelerating growth of renewable energies are key to India's strategy of achieving carbon neutrality by 2070, reveals an analysis by Ember and The Energy and Resources Institute.

Share:

India, a major player in the global energy market, faces complex challenges in achieving its ambitions of carbon neutrality by 2070.
The effectiveness of this transition hinges on two key aspects: reducing the cost of energy storage systems and rapidly increasing renewable energy production capacity, particularly solar power.

The Need to Reduce the Cost of Energy Storage Systems

Battery energy storage systems, which are currently expensive, need to see their prices fall substantially.
Today, these costs amount to around 13 million rupees per MWh (155,192 USD).
A significant reduction of around 50% is needed to reduce dependence on coal-fired power plants.
The report by Ember and The Energy and Resources Institute highlights that if these costs fall at an annual rate of 7%, the use of coal-fired power plants in India could fall from 68% in 2023 to 50% by 2032.
This trend highlights the sensitivity of the Indian energy system to variations in storage costs.

Renewable Energy Expansion and Storage Challenges

At the same time, it is essential to increase the use of renewable energies.
Solar capacity, currently at 84 GW, is set to reach 375 GW by 2032, representing an average annual increase of 38 GW.
This is well above recent additions of between 10 and 14 GW per year.
However, India will not be able to meet these targets without a significant improvement in its energy storage capacities.
At present, only 44 GWh of storage is planned by 2032, well below the initial targets of the National Electricity Plan.
At the same time, coal remains a central component of India’s energy mix. Coal capacity could reach 286 GW by 2032, including the 27.6 GW currently under construction and the 54 GW currently in the planning stage.
This development is largely due to the slow progress of storage infrastructures and the high cost of alternative energy sources.

Need for investment in energy storage and infrastructure adaptation

It is imperative that India invests in more affordable energy storage technologies and increases the flexibility of existing power plants to enable greater integration of renewables into the grid.
Coal-fired power plants will have to adapt their operating modes to compensate for the variability of renewable sources, which may require additional investment.
The lack of sufficient storage capacity currently limits the share of solar power to 25% of the energy mix.
Energy planning strategies need to be adjusted to incorporate expected reductions in storage costs, while ensuring grid stability and reliability.
The report points out that without a marked drop in storage costs, India could find it difficult to meet its climate targets while meeting growing energy demand.
The rapid evolution of the energy sector requires continuous adaptation of infrastructures and strategies.
Research and development in the field of energy storage, as well as the expansion of solar capacity, will play a key role in achieving India’s long-term energy goals.

Nearly USD92bn will be invested by major American and international groups in new data centres and energy infrastructure, responding to the surge in electricity demand linked to the rise of artificial intelligence.
Nouakchott has endured lengthy power interruptions for several weeks, highlighting the financial and technical limits of the Mauritanian Electricity Company as Mauritania aims to widen access and green its mix by 2030.
Between 2015 and 2024, four multilateral climate funds committed nearly eight bn USD to clean energy, attracting private capital through concessional terms while Africa and Asia absorbed more than half of the volume.
The Global Energy Policies Hub shows that strategic reserves, gas obligations, cybersecurity and critical-mineral policies are expanding rapidly, lifting oil coverage to 98 % of world imports.
According to a report by Ember, the Chinese government’s appliance trade-in campaign could double residential air-conditioner efficiency gains in 2025 and trim up to USD943mn from household electricity spending this year.
Washington is examining sectoral taxes on polysilicon and drones, two supply chains dominated by China, after triggering Section 232 to measure industrial dependency risks.
The 2025-2034 development plan presented by Terna includes strengthening Sicily’s grid, new interconnections, and major projects to support the region’s growing renewable energy capacity.
Terna and NPC Ukrenergo have concluded a three-year partnership in Rome aimed at strengthening the integration of the Ukrainian grid into the pan-European system, with an in-depth exchange of technological and regulatory expertise.
GE Vernova has secured a major contract to modernise the Kühmoos substation in Germany, enhancing grid reliability and integration capacity for power flows between Germany, France and Switzerland.
The National Energy System Operator forecasts electricity demand to rise to 785 TWh by 2050, underlining the need to modernise grids and integrate more clean energy to support the UK’s energy transition.
Terna has signed a guarantee agreement with SACE and the European Investment Bank to finance the Adriatic Link project, totalling approximately €1bn ($1.08bn) and validated as a major transaction under Italian regulations.
India unveils a series of reforms on oil and gas contracts, introducing a fiscal stability clause to enhance the sector’s attractiveness for foreign companies and boost its growth ambitions in upstream energy.
The European Commission is launching a special fund of EUR2.3bn ($2.5bn) to boost Ukraine’s reconstruction and attract private capital to the energy and infrastructure sectors.
Asia dominated global new renewable energy capacity in 2024 with 71% of installations, while Africa recorded limited growth of only 7.2%, according to the latest annual report from IRENA.
US President Donald Trump's One Big Beautiful Bill Act dramatically changes energy investment rules, imposing restrictions on renewables while favouring hydrocarbons, according to a recent report by consultancy firm Wood Mackenzie.
On July 8, 2025, the Senate validated the Gremillet bill, aimed at structuring France's energy transition with clear objectives for nuclear power, renewable energies, and energy renovation.
Brazil, Mexico, Argentina, Colombia, Chile, and Peru significantly increase renewable electricity production, reaching nearly 70% of the regional electricity mix, according to a recent Wood Mackenzie study on Latin America's energy sector.
The Canadian government announces an investment of more than $40mn to fund 13 energy projects led by Indigenous communities across the country, aiming to improve energy efficiency and increase local renewable energy use.
The German Ministry of Economy plans to significantly expand aid aimed at reducing industrial electricity costs, increasing eligible companies from 350 to 2,200, at an estimated cost of €4bn ($4.7bn).
A major electricity blackout paralyzed large parts of the Czech Republic, interrupting transport and essential networks, raising immediate economic concerns, and highlighting the vulnerability of energy infrastructures to unforeseen technical incidents.