A further decline in battery storage costs can pave the way for a solar PV-dominated Indian power system

Abstract

India, mainly powered by coal, has adopted ambitious renewable energy targets and currently considers a climate neutrality target for 2050. The rapid growth of solar PV power faces challenges due to its variable generation resulting in a decline in its economic value. In this paper, we evaluate the potential of battery storage to stabilize the market value of solar PV for three scenarios of further battery costs decrease. We estimate optimal battery storage and power generating capacities and their hourly operation in a 2040 Indian wholesale electricity market using an open-source power sector model. We find that battery storage increases the optimal solar PV shares from ∼40-50 % (without batteries) to ∼65 % (90%) in our central (optimistic) battery cost scenarios, while they hardly increase in our pessimistic battery cost scenario. We conclude that if battery cost drop to below ∼200 USD/kWh (including balance-of-system costs) they could become essential in a transition to a solar PV-dominant Indian energy system.