Core Insights - The report predicts that commercial battery storage projects will become profitable for the first time in 2024 due to declining battery costs and increased revenue from electricity market volatility [2][3] - Battery costs have decreased by approximately 80% over the past decade, from 7.9 million INR/MWh in 2015 to 1.7 million INR/MWh by 2025, while potential revenue has increased fivefold from 500,000 INR/MWh to 2.4 million INR/MWh in the same period [2] - The volatility in the electricity market, particularly in peak and off-peak pricing, is creating more value for commercial battery storage projects [3] Market Dynamics - The Day-Ahead Market (DAM) has seen peak prices reaching new highs while off-peak prices have declined, with data showing that from 2022 to 2024, there is an hour every six hours where prices approach the current cap of 10 INR/kWh [3] - The average summer midday price has dropped nearly 20%, with some days in summer 2025 expected to see prices near zero [3] - The transition in India's generation and consumption patterns is expected to continue increasing price volatility, particularly with rising solar penetration [3] Investment Opportunities - The report suggests that commercial battery storage projects could achieve an internal rate of return (IRR) of up to 17% by participating solely in the day-ahead market by 2025 [3] - The value of battery storage in the commercial market has been previously underestimated, with participation in ancillary services (grid balancing) expected to further enhance revenue [4] - In optimistic scenarios, combined participation in both markets could yield annual revenues of 3.3 million INR/MWh, raising the project IRR to 24% [4] Conclusion - As India's power system integrates more volatile renewable energy sources, the investment value of battery storage is expected to become more pronounced [6] - The high proportion of renewable energy integration is leading to extreme price volatility and shortages in grid ancillary services, presenting both risks and opportunities that battery storage can capitalize on [6]