Energy Storage Could Cut Power Costs by ₹60,000cr Annually: Study

India’s march toward clean energy has hit a milestone, with non-fossil sources now making up more than 50% of the country’s installed power capacity—five years ahead of schedule. A new study suggests that scaling up energy storage will be critical for consolidating this lead, meeting 2030 renewable targets at the lowest cost, and reducing electricity bills even as demand soars by nearly 50%.

The report—Strategic Pathways for Energy Storage in India Through 2032—published by the India Energy and Climate Center (IECC) at UC Berkeley and the Power Foundation of India, estimates that deploying 500 GW of clean capacity by 2030 and more than 600 GW by 2032 represents the most cost-effective route for India. Achieving this would require investments of around $380 billion (₹30 lakh crore) across generation and grid infrastructure.

According to the study, India will need61 GW (218 GWh) of storage by 2030 and 97 GW (362 GWh) by 2032, a steep climb from today’s 6 GW, most of which comes from pumped hydro.

Storage: the missing piece

“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 storage at unprecedented speed to make clean power available round-the-clock. This requires $40-50 billion (₹3-4 lakh crore) of investment in storage by 2032, but the payoff is enormous—consumers could save nearly ₹60,000 crore annually in power costs.”

Battery costs have fallen 65% since 2021, enabling solar-plus-storage projects to supply firm peak power at ₹3–3.5 per unit with construction timelines of 18–24 months. Several pumped hydro projects are also emerging at competitive prices. If storage targets are met, average procurement costs for discoms could fall in real terms by 2032.

Official push

“Energy storage is at the core of India’s clean energy vision,” said Srikant Nagulapalli, Additional Secretary at the Ministry of Power and Director General of the Power Foundation of India. “It’s the backbone of a flexible, resilient power system that can handle peak loads, harness renewables, and support grid stability. This study offers practical, affordable ways to roll out storage and provides clarity to move faster toward our goals.”

Grid reliability and thermal risks

The analysis finds that storage can ensure reliability through 2032 by meeting peak demand and balancing variable solar and wind. Thermal power plants under construction will still provide baseload, but by 2032, between 50–70 GW of coal capacity—around 25–30% of the current fleet—could see utilization rates drop below 30%, creating a risk of stranded assets.

Policy and manufacturing push

The study underlines the need for strong policy frameworks to enable scale-up, including storage purchase obligations for discoms, incentives for co-located projects, market rules for multiple revenue streams, and support for domestic manufacturing.

India’s battery manufacturing pipeline already points to200 GWh of capacity by 2030, backed by the Production-Linked Incentive (PLI) scheme, viability gap funding (VGF), recycling, and critical mineral sourcing initiatives.

“India has shown it can scale renewables,” Abhyankar added. “Now the challenge is grid flexibility. Energy storage is how we get there—and how India secures a reliable, low-cost, and independent energy future.”

The study was funded by the Sequoia Climate Foundation, with co-authors Umed Paliwal, Himanshu Chawla, and Sambit Basu.