Industry stakeholders at RenewX 2025 in Chennai
As battery costs decline and peak power prices surge, the time is right for industry stakeholders—particularly captive solar power users—to invest in Battery Energy Storage Systems (BESS). This is crucial for addressing the growing challenge of evening peak demand and supporting grid stability, M Chandrasekar, former Chairman of the Tamil Nadu Electricity Regulatory Commission, said on Wednesday.
Speaking at RenewX 2025 in Chennai, Chandrasekar stressed the importance of integrated storage solutions for the future of solar energy. “Solar alone is not enough—we need integrated storage systems,” he said, urging that solar plants should include at least 20 per cent storage capacity. For instance, a 10 MW solar park should incorporate 2 MW of battery storage co-located. He noted that storage is key not only for stabilising electricity tariffs but also for ensuring grid reliability.
Chandrasekar highlighted that battery prices have steadily fallen, creating an opportunity for captive solar users to store 10-20 per cent of their solar energy output. This would reduce their reliance on grid power during peak hours, when both demand and prices are highest. Currently, distribution companies (DISCOMs) purchase power during peak hours at ₹12 to ₹15 per unit, while solar users can only access cheaper electricity at night. This creates financial discrepancies, as DISCOMs buy power at ₹10-₹12 per unit but credit solar consumers buy with only ₹3 per unit, placing unnecessary financial strain on users.
He further explained that electricity rates during peak hours can be 25 per cent higher than average, making battery storage an even more attractive option. While the average rate is ₹7.30 per unit, during peak hours it can rise to ₹9 or more, presenting an opportunity for developers to improve profitability by integrating storage.
Chandrasekar also recommended promoting DC-to-DC coupling, which would allow solar panels to charge batteries directly using the same inverter for both charging and discharging, thus reducing costs.
growing importance
G Sivaramakrishnan, President of the Kerala Renewable Energy Entrepreneurs’ and Promoters’ Association (KREEPA), noted that energy storage has become the fourth pillar of the power ecosystem, alongside generation, transmission, and distribution. Kerala has already released a draft regulation calling for 10 per cent of energy to be supported by storage, particularly to address peak-hour challenges between 6 pm and 10 pm when grid stress is highest.
Ramesh Shivanna, President of the Karnataka Renewable Energy System Manufacturers Association, added that States like Karnataka, with abundant hydropower potential, are advancing both pumped hydro and battery storage initiatives. .
With the government launching round-the-clock renewable energy tenders and offering incentives for developers who integrate storage, has increasingly made energy storage an important element of India’s renewable energy strategy.
Published on April 23, 2025
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