(Nov 4): India will set aside INR145 billion (RM6.23 billion) in subsidies to help build 92GWh of energy storage capacity, seeking to make better use of its rapidly expanding renewable power fleet and transmission network, information minister Ashwini Vaishnaw told reporters in New Delhi on Wednesday (Nov 4).

The financial boost will run through 2031 and is designed to help companies in the storage sector kickstart operations as the nascent market takes off. 

Currently, India’s storage capacity sits at about 54GWh but the government aims to reach 411GWh of storage capacity by the financial year 2031-32.

The decision seeks to address a growing structural challenge for India’s energy transition, as the country has been adding more solar and wind generation capacity than the grid is able to absorb. Solar and wind capacity has quadrupled since 2017 to about 230GW, accounting for 41% of the total installations. Billions of dollars have also been invested in transmission lines to carry renewable electricity across the country.

But much of that infrastructure cannot be fully utilised around the clock. Solar plants stop generating after sunset while during the day the grid can struggle to absorb all the electricity produced when solar output peaks.

The subsidies are meant to lead to a total investment of INR976 billion and will require companies applying for support to source at least 40% of their equipment in the country, encouraging domestic manufacturing.

The cabinet also approved financial incentives worth over INR28 billion to bolster processing of critical minerals in the country, Vaishnaw said. The move will boost India’s manufacturing in sectors including electronics, semiconductors, batteries, defence and heavy equipment and will help the country reduce import dependence, she told reporters.

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