India Urged to Implement Energy Storage Policy Amid Supply Shocks
India needs energy storage policy to manage supply shocks: S&P Global
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S&P Global emphasizes the need for India to adopt a comprehensive energy storage policy to manage supply shocks, particularly in light of the ongoing West Asia conflict. With over 90% import dependency for key energy resources, the report warns that without strategic reserves, India's economic resilience is at risk.
- 01India's energy import dependency is over 90% for crude oil and 60% for LPG.
- 02Current battery storage capacity is less than 2 gigawatts.
- 03The West Asia conflict has increased freight costs by approximately 75% month-on-month.
- 04S&P Global downgraded India's economic growth forecast for FY27 to 6.6%.
- 05Three key policy priorities identified: energy security, food security, and economic reforms.
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S&P Global has called for India to establish a comprehensive energy storage policy to effectively handle supply shocks, particularly highlighted by the ongoing conflict in West Asia. Currently, India relies heavily on imports, with over 90% of its crude oil and 60% of its liquefied petroleum gas (LPG) sourced from the region. The report notes that India has less than 2 gigawatts of battery storage and lacks strategic reserves for natural gas. The West Asia conflict has exacerbated India's energy vulnerability, driving freight costs up by 75% month-on-month and leading to a projected inflation increase to 5.1% in FY27 from 2% the previous year. S&P has downgraded India's economic growth forecast for FY27 to 6.6%, citing disruptions in energy flows and rising input costs across various sectors. The report emphasizes the need for India to enhance its energy resilience through improved contract flexibility and expanded shipping access, alongside focusing on energy and food security as part of its long-term economic strategy.
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The proposed energy storage policy could help stabilize energy prices and reduce inflation, directly affecting household energy costs and manufacturing input prices.
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