Over INR 5,000 crore is to be invested by KP Group, an India-based renewable energy group, in 10 GWh of battery cell capacity, and the first phase is expected to be operational by March 2028. The move has been prompted by the growing importance of BESS, in which the group already holds about 1.5 GWh of orders in Gujarat.
Cell capacity: 10 GWh
Investment: INR 5,000 crore
First phase: March 2028
GUVNL BESS orders: 1.5 GWh
Botswana pipeline: 5 GWh
IPP portfolio: 3.2 GW
IPP target 2032: 10 GW
KP Group, an India-based renewable energy group, is planning to set up 10 GWh of battery cell manufacturing capacity at an investment of over INR 5,000 crore. The first phase of the plant is expected to be operational by March 2028, according to Affan Faruk Patel, whole-time director of the group's subsidiary KPI Green Energy, who outlined the plan in an interview with Business Standard.
We are entering battery cell manufacturing as battery energy storage systems (BESS) become increasingly important. We plan to manufacture battery cells with a capacity of 10 GWh. We expect to launch it in around one to one-and-a-half years.Affan Faruk Patel, Whole-Time Director of KPI Green Energy
For the plant, the group intends to apply under the relevant government schemes, and it has engaged three consultants for that purpose, since, in Patel's view, the incentives will be needed if the plant is to be financially viable and is to achieve the required internal rate of return (IRR).
The cell plant is to be built by a group that already works as an independent power producer (IPP) and as an engineering, procurement and construction (EPC) contractor, and that also develops BESS projects. In Gujarat, it has received cumulative BESS orders of approximately 1.5 GWh from Gujarat Urja Vikas Nigam Limited (GUVNL), under which it is to store electricity and supply it to the utility during periods of peak demand. The power purchase agreements (PPAs) for these orders are still being worked out. On 3 November, the state regulator adopted the tariffs for 450 MW/900 MWh of standalone BESS, of which 175 MW/350 MWh had been allotted to Sun Drops Energia, a KPI Green Energy subsidiary, at INR 231,990 per MW per month.
The storage business is also to be expanded abroad. The group has a 5 GWh BESS project pipeline in Botswana, and it plans to follow a similar model in Europe after 2030, while Zambia, Tanzania, Saudi Arabia and the United Arab Emirates are also among its target markets. These overseas plans relate to storage development rather than to cell manufacturing, since the group develops the projects, invests the capital expenditure and sells the power. At home, its IPP portfolio of about 3.2 GW is to be raised to 10 GW by 2032, and its renewable EPC business of 6.2 GW is to reach 10 GW over the same period.
The plan was disclosed a week after the Union Cabinet of India had approved INR 14,500 crore of viability gap funding (VGF) for 92 GWh of grid-scale energy storage, which is to be built by FY31. Of that capacity, 60 GWh is to come from pumped hydro storage and 30 GWh from BESS.