Battery storage to lead India’s effort towards net-zero trajectory over the next decade: Praxis report

Stationary storage within Battery Enabled Storage Systems (BESS) would witness significant growth over the next 10 years and Lithium-ion technology will lead this growth. This will be due to declining battery prices at 6 percent CAGR between 2018-2030 ushering India towards a net-zero trajectory, according to a recent report by Praxis Global Alliance, a global management consulting and advisory firm based in India.

India will lead the battery storage market and contribute 35 percent of the total global battery deployment for energy storage by 2040 as per IEA, while Indian stationary storage requirement is expected to grow 9X at a CAGR of 22 percent during the forecast period of FY22-32 as per a report by India Smart Grid Forum. The key factors driving this growth are robust solar energy generation targets and end-user demand towards green energy transition would propel the Indian Stationary Storage market over the next 10 years.

The Lithium-ion technology is projected to lead the Indian battery energy storage systems market by 2030 due to a decline in battery prices for both lithium iron phosphate battery (LFP) and Lithium, Nickel, Cobalt, and Manganese (NCM) batteries, the two most common lithium-ion battery technologies used and in turn provide better cost economics.

The overall decline in battery prices for LFP batteries is expected to be at about US$ 80 per kWh and NCM would be at about US$ 100 per kWh by the end of the decade. Further, the total cost of ownership (TCO) is expected to almost halve from current levels for both Lithium-ion battery technologies.

The cost economics of solar power and battery storage on account of the falling prices will result in the LFP batteries’ tariff for electricity to range between INR 7.0 – INR 7.7 i.e. US$ 0.09 – US$ 0.10 per unit by 2030, while NCM batteries tariffs are expected to range between INR 7.8 – INR 8.7 i.e.US$ 0.10 – US$ 0.12 per unit by 2030 from their current rates.

In this report, Praxis experts also looked at the electricity storage technologies used globally and the application of BESS and suggested that both utility-scale and end-consumer models exist globally for battery storage which can be replicated in India as battery prices further decline. The use case for commercial and industrial category end consumers to replace Diesel Gensets is already available today.

Aryaman Tandon, Managing Partner and Co-Founder, Praxis Global Alliance during the launch of the report said, “Battery storage would lead India’s march towards net-zero targets in this decade, with global battery prices declining significantly. This improving economics with a declining total cost of ownership (TCO) and favorable Government policies will result in increasing battery storage manufacturing and adoption in India.”

Savio Monteiro, Senior Vice President, Energy, Oil & Gas and Utilities, Praxis Global Alliance said, “The decline in Lithium-ion battery storage prices over the next few years would make green energy affordable at both residential, commercial & industrial levels as well as at grid level and has the potential to replace fossil fuels significantly. We would witness increasing use cases and newer business models evolving as the overall battery storage cost declines over the next 10 years.”

Governments globally are evolving their energy storage policies to support the industry and alternate energy usage for climate and sustainability; India is advancing towards further development and support on energy storage to support the needs of the future. Adequate requirement of incentives to offset higher manufacturing costs and reduced reliance on imports of raw materials are some of the entryways for the growth of advanced BESS.

Arising from these proactive efforts, the Performance-Linked Incentive (PLI) scheme was launched by the Indian Government to boost battery manufacturing expertise and scale domestic production, which is a positive step to build a durable economic advantage in this key sector.

About Praxis:Praxis Global Alliance is the next-gen management consulting and business research services firm revolutionizing the way consulting projects are delivered. It delivers practical solutions to the toughest business problems by uniquely combining domain practitioner expertise, AI-led research approaches, and digital technologies. The company operates four business units including Praxis Global Alliance Financial Investor Group (FIG) offering pre-deal support, commercial due diligence, post-acquisition value creation, Praxis Global Alliance Business Enablement and Transformation (BET) for practitioner-led business advisory and consulting, PGA Labs focused on technology-led business and market research and tools, and PraxDigital™ delivering data engineering and analytics, AI, OpenData and visualization solutions to clients across verticals. Present in 4 locations in India, Praxis Global Alliance works with C-suite to the front-line executives across business streams helping them with end-to-end business enablement, organizational transformation, and revenue maximization support in an agile environment.