India’s energy storage market is set for a massive growth in the coming decade similar to growth witnessed by solar PV in past decade.
While there are many existing opportunities for utilizing energy storage technologies for reducing diesel consumption for backup power and improving utilization of existing generation, transmission and distribution resources, newer opportunities are arising with push for greater renewable penetration. As the share of variable renewable generation increases in India’s grid system, the country will need accelerated deployment of utility-scale battery storage in order to store renewable power generated when available in abundance and provide firm power during the peak hours or in times when generation is low (and demand is high).
Renewable energy currently accounts for ~10% of India’s total annual energy generation, however with 450GW of renewables slated to come online by 2030, this share is expected to increase to over 30%. In fact the installed capacity for some of the renewable energy rich states may exceed the peak load for those states by 2030. India Energy Storage Alliance (IESA) estimates India’s energy storage market will grow from current level of ~20 GWh / year to over 160 GWh/ year by 2030 in the coming decade considering growth opportunities for both stationary and emobility sector.
Evolution of India’s energy storage market
India’s energy storage market has been in the making for the past few years. The journey began in 2012-13 when the Central Electricity Authority of India (CEA) first constituted a committee for large-scale renewable energy integration in India. Shortly after which the Ministry of New and Renewable Energy (MNRE) in 2014-15 constituted a Standing Committee for Energy Storage under the leadership of Dr. Satish Agnihotri, then Secretary MNRE. Since then, several measures have been taken by the government that has culminated in the making of First Draft of the Energy Storage Roadmap in 2016, and later, the National Energy Storage Mission in 2018.
The National Energy Storage Mission document released in 2018 identified several barriers to the development of energy storage market in India and some of these barriers have already been addressed.
For example, the MNRE and Central Electricity Regulatory Commission (CERC) have come up with renewable energy hybrid policy, for renewables plus storage to be built on both greenfield and existing projects. The Solar Energy Corporation of India (SECI) has led the way for exploration of utility-scale battery deployment in the country by implementing multiple renewables plus energy storage RFPs for dispatchable peak power and round-the-clock renewable power supply.
Currently, work is also going on allowing energy storage to participate in ancillary services where we are close to opening-up the market, however, incumbent technologies have fought hard to buy more time. We have spent nearly three years on pilots to confirm if coal plants or hydro plants can provide these services, but it has been recently concluded that advanced energy storage technologies can help with faster response. The is on the verge of opening ancillary services participation for advanced energy storage technology. Similarly Ministry of Power has also constituted a committee last month to develop policy framework for energy storage technologies for grid not just limited to renewable energy.
Energy storage beyond demand response
Some other areas which need attention are improving ‘power quality’ and not just power availability. This calls for looking at energy storage not limited to address demand response but to enhance power quality. Some of these challenges will likely be addressed through the Amendment of Electricity Act which has been long delayed in the Indian Parliament.
Additionally, we have witnessed several steps in the right direction in terms of proposal for carriage and content separation which could potentially create good business framework for the rapid adoption of energy storage in the distribution sector.
While this is happening, new opportunities are being created on the distribution-side where states are not allowing net metering for large scale renewable projects on C&I facilities. We believe, the time has arrived for renewables plus storage projects as a behind-the-meter (BTM) resource. There is no further policy intervention required to make it happen, the only thing required is financing.
IESA is working with the International Financial Corporation (IFC) and the World Bank (WB) for creating a financial mechanism that can support rapid deployment of renewables plus storage on C&I-side, similar to the rooftop solar fund that was created by WB for SBI.
Redirecting focus on safety and implementation
With technology prices having come down, the overall application and technology advances are more evident, and the market is poised for growth. However, it is extremely important to focus on safety, as is evident from some of the issues faced by battery storage manufacturers like LG and Tesla in Korea, the US, and Australia where incidents of large-scale fires or overheating in renewables plus storage projects have been reported.
In India, we need to start getting away from the focus on L1 as the criteria for selection and need to strengthen the regulatory framework and implementation on safety around energy storage projects.
Keeping that in mind, IESA signed an MoU with Underwriters Laboratories (UL) in 2016-17 and as a part of that partnership we are doing a series of workshops and campaigns to highlight the need for safety in battery-based storage. This work also resulted in creation of ETD 52 technical committee at BIS that has already finalized standards for stationary energy storage.
If we are successful in eliminating few of these remaining barriers, then along with the Production Linked Incentives (PLI) scheme for manufacturing Advanced Chemistry Cell (ACC) batteries, the next 2-3 years will provide a huge opportunity for demand creation in India.
The Ministry of Power is expected to release a render for 1GWh of energy storage for supporting grid operations that will be deployed in four regional grids for improving power quality and reliability. Also in recent announcements the Ministry has confirmed that India is working on a 13 GWh storage facility in Ladakh and a 14 GWh system in Kutch. These strategic moves will make India’s grid-scale battery storage programme the largest in the world.
While one can safely say – it is the dawn of large grid-scale energy storage projects in India, the important step now is for the announcements to be followed by timely implementations. So that, by the time giga factories are established in India, we will have the strong foundations of requisite skills and capabilities.