The role of various forms of energy storage in the modern grid has been well-established in the recent past. For a developing economy like India, where the quality of power is still well below the desired levels, it can play an enabling role in every aspect including generation, transmission, distribution, and also on the demand side (electric vehicles). Tesla’s 315 MW battery-based storage solution for South Australia’s Hornsdale wind farm has cleared the air on the uncertainties surrounding energy storage, thereby bringing it to the forefront of technological advancements in the power sector.
India presents a strong market for energy storage development given the challenges in the electricity markets, high renewable energy targets and the scale of technology intervention required to bridge the demand-supply gap. Energy storage is central to the country’s plans to move towards a “one nation, one grid, one frequency” model, while attempting to integrate 175 GW of renewable energy by 2022, and providing energy access to over 850 million citizens with poor or no access to power.
To this end, the National Energy Storage Mission (NESM) is under way. At the first assembly of the International Solar Alliance, Prime Minister Narendra Modi said, “Under the NESM, the government will focus on demand creation, indigenous manufacturing, innovation and energy storage.” The NESM will provide a policy framework covering four key areas: energy storage for large-scale renewable energy plants at the transmission level; on-site energy storage integration at the distribution level; rural microgrids and energy access; and development of the storage component in electric mobility plans. Meanwhile, the industry indicators have been moving in the right direction to create a facilitating environment for the growth of battery-based energy storage solutions. The winning bids in the recent renewable energy auctions have seen a declining trend in the past couple of years. The Central Electricity Authority’s Renewable Energy Resource Development committee recently concluded that the total impact of grid balancing, including renewable energy, stands at Rs 1.11 per kWh. As a result, the solar plus storage model of power generation is likely to gain traction. Power quality and reliability continue to remain major issues in the residential segment despite grid expansion and overall improvements in grid availability.
Among all the battery-based energy storage technologies, lead-acid and lithium-ion (Li-ion) are the most popular and widely used. The growth in technology, meanwhile, has given an edge to various other technologies, making them more effective. In terms of performance, flow batteries come equipped with an exceptional lifecycle but have lower roundtrip energy efficiencies as compared to Li-ion batteries. While lead acid batteries are high on efficiency and low in costs, their lifecycles are very low as compared to other technologies. Innovative materials and cell design improvements, which can enhance specific properties of respective energy storage technologies, will play a crucial role in making the technologies attractive for rapid commercialisation.
On the manufacturing front, Tesla is in the process of creating “giga factories” with a production capacity of 50 GWh by 2020 and a cost of $5 billion. Two more such factories are at the conceptualisation stage in China and Europe. Other technology companies are likely to follow suit, although initially the scale of manufacturing operations could be much smaller. According to the Indian Energy Storage Alliance estimates, by 2020 at least three global companies will have an annual production capacity of over 25 GWh and another five will have over 10 GWh of annual production capacity for Li-ion batteries. The new projected capacity for 2020 now stands at over 400 GWh.
The question in the Indian context remains whether the country can replicate these best practices to create cost-effective manufacturing solutions for energy storage. According to Dr Rahul Walawalkar, president and managing director, Customized Energy Solutions, India should aim at building at least 10 GWh of annual production capacity by 2020 and 50 GWh by 2025 to remain relevant in the global space. Once the NESM is in place, the role of energy storage in the Indian power sector is likely to grow. This mission is expected to create an enabling ecosystem for energy storage in India, akin to what the National Solar Mission was able to accomplish for the solar power segment.
Based on inputs from Debi Dash, Director IESA, Customized Energy Solutions at Renewable Watch’s conference on “Distributed Solar in India”