Renewable energy implementing agencies are increasingly coming out with tenders for renewables plus storage in response to the strong demand from the industry, Sunil Sharma, Director (NRE and RCM), Ministry of Power, has said.

The 2020s are the decade of energy storage, Sharma said at a panel discussion titled ‘Energy Storage and Green Hydrogen: The Missing Links in India’s Renewable Energy Transition’ at the Mercom India Renewables Summit, 2025, held on July 24 and 25 in New Delhi.

The other panelists were Inder Bhambra, Chief Business Officer at Envision Energy India; Shri Venkatesh, Founding Partner at SKV Law Offices; Bhavesh Kumar Rathod, Founder and Director at Soleos Solar Energy; and Inderjeet Singh, Vice President- Technology, Green Hydrogen and Derivatives at Adani New Industries.

Wendy Prabhu, the Co-Founder of Mercom Capital Group, moderated the session.

Given the reducing prices of energy storage, many commercial and industrial (C&I) consumers would find it lucrative to go for storage instead of energy banking. “However, they may not rely on banking with distribution companies (DISCOMs) for the long term. DISCOMs have limitations in providing power banking facilities, and they will limit banking when the threshold is reached. However, as of now, we are not considering incentivizing behind-the-meter projects,” Sharma said.

On the residential sector side, he said discussions were on within the Power Ministry on adding storage as part of the PM Surya Ghar: Muft Bijli Yojana, but it would take a few years for its implementation.

Sharma also highlighted that some DISCOMs have started considering using BESS with solar to complement their existing distribution and transmission infrastructure better.

Rathod of Soleos said lithium iron phosphate (LFP) has emerged as the obvious choice of battery chemistry for manufacturers.

Highlighting the reasons for LFP adoption, Rathod said, “Lithium prices have gone down, and it also has good thermal management capacities. The application of LFP is diverse, from mobiles to giant storage systems.” At this level of applications, the scale of manufacturing increases and prices reduce.

He added that sodium-ion is a promising alternative technology, especially in light of India having abundant resources for sodium.

Rathod said the industry and utilities have different perspectives on energy storage, but it can benefit them equally. “The industry would like to shave off peak power and get cheaper electricity. For behind-the-meter solar power projects, they want to add storage. On the utility side, they have to invest more in infrastructure with the growth of renewables like wind and solar. Energy storage helps the utilities in reducing the investment in the grid.”

Bhambra of Envision said that for BESS manufacturers, the prices being discovered right now were not comforting. These prices are primarily driven by oversupply from China. “However, within six months to one year, BESS prices should stabilize,” he said.

The momentum of energy storage was driven by policy, peak power, and round-the-clock tenders, but of late, investors had started deploying capital into projects before the declaration of an auction.

“Today, a combination of wind-solar and storage can be the base load power. The BESS tariffs won are lower than the tariffs of a thermal greenfield power station,” added Bhambra.

He felt that for the success of energy storage, the government should ensure that there are no outages and failures like those that have occurred in some developed countries.

Energy Storage Challenges

Venkatesh of SKV Law Offices spoke about the problems arising from state electricity regulatory commissions not abiding by the guidelines of the Central Electricity Regulatory Commission (CERC).

“While CERC has issued regulations on scheduling, dispatch, and grid code, the same is not being replicated in the states. The biggest challenge is the acceptance of energy storage systems in the grid at the state level. Secondly, DISCOMs are hesitant towards standalone energy storage systems (ESS),” he said.

Venkatesh felt that the Electricity Act must be amended to incorporate ESS as an integral part of the grid.

According to him, DISCOMs will perceive ESS as a viable option if the state regulators adopt CERC’s regulations.

Given the risks, Venkatesh warned developers that they must be wary of the risks involved with standalone ESS.

“If developers look at standalone ESS, there are state-wise connectivity issues, and whether the regulators permit standalone ESS. Solar projects are exempted from environmental impact assessments, but ESS comes under battery waste management rules, which have significant consequences,” Venkatesh said.

Venkatesh also highlighted the lack of separate licensing for ESS.

“ESS assumes the nature of the project it is bundled with. Under our plenary law, distribution and transmission are regulated, and therefore, regulations need to ensure that ESS does not require separate licensing. Regulators also need to look at ESS as revenue optimization in terms of contractual delivery, arbitrage, and grid frequency moderation,” he said.

Growth of Green Hydrogen

Inderjeet Singh of Adani New Industries said that his company had nearly 60% to 70% of the green hydrogen market share and that it was planning to establish a complete ecosystem for green hydrogen.

“We are going to set up the complete ecosystem for developing green hydrogen and its derivatives on the west coast of India. This plan will be realized within the coming two to three years,” he said.

Singh added that Adani already had a 4 GW module, ingot, and wafer manufacturing facility on India’s west coast where it was developing an alkaline electrolyzer manufacturing facility.

“Technology transfer has already been applied to prototypes of 18 kV and 80 kV electrolyzers. It has been operational for four to five months. We are going to declare the 5 MW stack in the market,” Singh added.

Singh also informed that Adani had been operating a pilot off-grid project of 5 MW with alkaline technology for more than six months.

He said the company would be able to generate green hydrogen and its derivatives at a lower cost than in Europe or China.

Singh said green hydrogen molecule prices can be brought down if the developers can share the infrastructure developed by private and public entities.

About the prices, he said, “In the Indian market, we are seeing $4/kg for green hydrogen according to recent tenders. Parallelly, natural gas costs in India are continuously increasing, reaching close to $14-15/million British thermal units (MMBtu). In Europe and other countries, the natural gas cost was $2-3/MMBtu, but the price has increased to $12-13/MMBtu due to global issues.”

Singh stated that Adani was producing gray hydrogen at $2/kg and green hydrogen at $4/kg. With the increased volumes of green hydrogen, the company would be able to compete with gray hydrogen prices.