Energy storage is an integral part of the electricity value chain. Improving storage technologies and declining costs are further pushing these to the forefront. With the increasing grid integration of renewables, energy storage is expected to play a key role in bridging the demand-supply gap, and improving grid resilience. The potential for energy storage in the Indian power market is estimated to be around 300 GW.
There are a variety of electrochemical devices available for energy storage. These include flow batteries, sodium-based batteries, metal air batteries, lead-acid batteries and lithium-ion (Li-ion) batteries. The variables used for comparing batteries include cost, complexity of the battery management system, round-trip efficiency, life cycle, self-discharge, safety, energy density and thermal density. Lead-acid and Li-ion batteries have been the most popular choice for energy storage so far. Although lead-acid batteries are highly efficient and low cost, they have shorter life cycles than other technologies. Flow batteries are also commonly used. They have a better life cycle but lower round-trip energy efficiency vis-à-vis Li-ion batteries. Flow batteries and sodium-based batteries have long lifetimes of 5,000 to 10,000 cycles. While different Li-ion battery technologies are available, the average lifetime of these batteries is 2,000 to 5,000 cycles. Energy efficiency is more critical for large-scale applications as the cost of energy loss is relatively low in smaller applications. The energy efficiency and life cycle of storage devices have steadily improved over time due to technological improvements. Where batteries are used for extended hours, the baseline characteristic for comparison is energy density. In the case of ancillary services, grid stability and frequency management, the associated time duration rarely exceeds 30 minutes. For such short durations, power density is a more suitable deciding factor. Improvements in cell design and material can enhance specific properties of energy storage technologies. These advancements can help make energy storage technologies more commercially competitive.
The high costs of energy storage technologies have been a major deterrent to uptake. However, there has been a declining trend in recent years. This coupled with the plummeting cost of wind energy will bring the combined levellised cost of energy closer to the cost of conventional energy. The cost of storage depends on various parameters. The overall cost of nickel-manganese-cobalt and lithium ferro-phosphate technologies dropped from about $1,000 per kWh in 2018 to $250-$350 per kWh recently. However, these are cell-level values. If system-level costs are considered, it would include battery management systems, power conversion systems and charge controllers. The installations will include transformers, heating, ventilation, and air conditioning systems and cabling. Thus, even if the cell cost is about $250 per kWh, the total cost of installation could add up to $700 per kWh. The cost per cycle of Li-ion batteries has seen a steep decline over the past decade while flow battery prices have not seen much change despite their being an older technology. This may have been due to its inability to achieve economies of scale.
Energy storage is an important aspect of the government’s One Nation, One Grid plan. The National Energy Storage Mission was launched in 2018 to aid the development of the energy storage market. India is currently importing cells and repackaging them before deploying them in the market. Over 1 MWh of batteries are assembled in India annually. The government intends to promote domestic manufacturing of storage devices and take it to a production capacity of about 50 GWh annually. This involves incentivising the production and sale of Li-ion cells. Achieving economies of scale is an important consideration for manufacturing storage devices. On a global scale, manufacturing facilities have progressed from being simple “gigafactories” with a production capacity of 1 GWh per year to “multi-gigafactories” with a production capacity of 10 GWh per year. Even though such gigafactories do not exist in India at present, companies are being encouraged to follow the multi-giga model with the government proposing a minimum manufacturing capacity of 5 GWh per year. Although efforts are on to propagate energy storage, most of the tenders issued for energy storage in the renewable energy space over the past one year have been either cancelled or delayed. This includes the Solar Energy Corporation of India’s solar-wind hybrid tender for 160 MW of capacity (including 40 MW of wind and 20 MW of storage). In August 2019, a fresh tender was floated by SECI for 1.2 GW of solar-wind storage projects. The last date for bid submission is September 17, 2019.
According to India Energy Storage Alliance (IESA), the emphasis should be on the systematic scale-up of energy storage systems in order to build confidence in the technology. Energy storage should also be incorporated in the renewable energy space to slowly phase out thermal power. The problems associated with the cancellation of tenders and the dearth of energy storage projects in the renewable energy space need to be examined and addressed.
Based on a presentation made by Debi Prasad Dash, Executive Director, IESA