Abstract
India’s envisages uptake of 450 Giga Watt (GW) of renewable energy capacity by 2030. The resulting system flexibility needs can be met by 50 GW of 4-hour energy storage. However, system flexibility has historically been met by coal power plants, and India also plans to install 50 GW of new coal power capacity during 2022-27. Our paper answers three related questions that would help maximize deployment of battery storage with appropriate policy design. First, what is the cost-competitiveness of renewable energy and battery storage compared to new coal-based power? Second, what should be the high-level policy framework for ensuring necessary deployment of battery storage? Third, what should be the appropriate procurement mechanisms for battery storage along with renewable energy? To answer these questions, we first compare forecasted levelized cost of energy for renewable energy and battery storage with coal power, and then use two frameworks to investigate policies. Our findings are as follows. First, renewable energy and battery storage is cost-competitive over new coal by 2022. Second, India should adopt a battery portfolio standard that is linked to the existing renewable portfolio standard. Third, India should adopt the renewable dispatchable generation power purchase agreement to ensure that multiple policy criteria are met.
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