The world is rapidly moving towards decarbonisation of industries as well as greening of the power grid. While the ongoing energy transition presents several opportunities for governments, industries, the environment and mankind, it also creates difficulties – intermittency of renewable energy systems being the big-gest one. Energy storage systems work well to address this issue of intermittency. In fact, the development of battery energy storage systems (BESS) has gained momentum in recent years, given their crucial role in maintaining grid balance during peak and off-peak periods and ensuring a continuous and reliable supply of power from renewable energy sources. They are also an important energy source for supporting EV charging infrastructure in the country. Moreover, energy storage finds significant applications across industries, such as in data centres and manufacturing units, which are increasingly taking the decarbonisation route.
Hybrid projects, which integrate solar, wind and other renewable energy sources, are now being developed with energy storage systems in order to ensure round-the-clock power supply. Going forward, these models are likely to be adopted more rapidly, thereby, increasing the need for greater development in the sector, in terms of technologies, manufacturing capabilities as well as government incentives.
Recent developments
The year 2022 has witnessed the onset of several key developments and projects associated with energy storage. A month-wise round-up has been presented below, beginning from the most recent:
August 2022: With several deals, tenders and projects, the month of August was packed with major developments in the energy storage sector. A programme agreement under the production linked Incentive (PLI) scheme for advanced chemistry cell battery storage was signed by Reliance New Energy Limited, Ola Electric Mobility Private Limited and Rajesh Exports Limited. These companies will receive subsidies under the PLI scheme, provided the manufacturing facility is set up within two years. The month also saw the conclusion of the Solar Energy Corporation of India’s (SECI) auction for setting up pilot projects of 500 MW/ 1,000 MWh standalone BESS on a build-own-operate-transfer model. JSW Renew Energy Five won the entire capacity with a bid of Rs 1.08 million per MW.
Further, Maharashtra State Electricity Distribution Company Limited invited bids for a long-term contract to purchase 250 MW of flexible and schedulable power from grid-connected renewable energy projects with an energy storage facility. The Kargil Renewable Energy Development Agency also issued a request for proposal for the supply, installation and commissioning of solar tubular-gel type battery banks to be deployed in varying capacities across different locations in Kargil, Leh. On the e-mobility front, Suzuki announced the setting up of an electric vehicle (EV) battery manufacturing facility at an investment of Rs 73 billion in Hansalpur, Gujarat.
July 2022: Expanding its geographical horizon, NTPC issued a tender for 150 MW/150 MWh BESS’s for three locations in Cuba. Further, Hero Future Energies was declared the winner in the Kerala State Electricity Board’s tender for construction of a 10 MW/20 MWh grid-connected energy storage plant. Besides, a $500 million investment was announced by Ola Electric for the establishment of a state-of-the-art battery innovation centre in Bengaluru.
During the same month, the Ministry of Power (MoP) released the Renewable Purchase Obligation and Energy Storage Obligation Trajectory till 2029-30 as per which an energy storage obligation has been specified for solar- or wind energy-based storage. The prescribed storage obligation is 1 per cent in 2023-24 and will increase up to 4 per cent in 2029-30. It will only be considered fulfilled when at least 85 per cent of energy stored in a system annually is from renewable sources.
June 2022: Hindustan Petroleum Corporation Limited announced a project in Andhra Pradesh entailing the establishment of a 100-150 MW wind-solar hybrid project with a BESS on vacant land for captive use. A tender was issued to select consultants for a feasibility study.
May 2022: Under a major storage tender issued by SECI, Sungrow collaborated with Tata Power Solar Systems Limited to build a large BESS plant in Phyang, Leh. The storage plant will have a capacity of up to 60.56 MWh. The Greenko Group announced its plans to build an intelligent “Energy Cloud Storage Platform” with 50 GWh of daily storage capacity by 2025 and 100 GWh by 2027.
April 2022: NTPC Limited invited bids for the engineering, procurement and construction of a grid-connected BESS with 10 MW and 40 MWh rated AC discharge capacity at a 33 kV switchgear interconnection point in Ramagundam, Telangana. Further, SECI issued a request for selection document for developing two BESS projects at a single location in the vicinity of Fatehgarh-III substations grid-substation of the interstate transmission system network in Rajasthan. O2 Power, an India-based renewable energy producer, signed an MoU with Powin, a US-based battery energy storage company, to supply battery storage solutions for the Indian renewable energy sector.
March 2022: The MoP notified the Guidelines for Procurement and Utilisation of BESS as part of Generation, Transmission and Distribution Assets, along with Ancillary Services to facilitate the procurement of BESS in the country.
February 2022: The Greenko Group and Ayana Renewable Power entered into a partnership to provide stand-alone storage capacity in India. Under the agreement, the companies aim to create robust and despatchable renewable energy solutions for industrial and distribution companies in India, including a round-the-clock power supply of up to 1 GW. To this end, the Greenko Group has offered 6,000 MWh of storage capacity in total.
January 2022: The year took off with a partnership announced between Fluence, a global energy storage technology and services provider, and ReNew Power to form a new company to cater to India’s rapidly growing energy storage market.
Outlook
According to a 2022 report by Baker McKenzie, the year 2021 was good for the global energy storage industry with over 12.4 GW of new capacity addition, registering an increase of over 150 per cent from the 2020 levels. The rise was stark considering the supply chain disruptions and restrictions to mobility during the Covid-19 pandemic. Going forward, as the world continues to push for decarbonisation to meet the goal of net zero emissions, the need for energy storage will continue to rise. According to Wood Mackenzie, 346.2 GW/964 GWh of new energy storage capacity is expected to be added globally between 2021 and 2030, with the majority of this in the US and China. India too has embarked on a journey to build a robust energy storage industry in the coming years. According to a recent report by NITI Aayog, India’s battery storage capacity has been estimated to reach 600 GWh by the end of this decade. The growing emphasis on green mobility initiatives, supportive government policies, climate commitments, demand for consumer electronics and the overall decarbonisation efforts for the power grid are key drivers for the adoption of energy storage. The report also suggests that the annual demand for batteries grew at a compound annual growth rate (CAGR) of 25 per cent between 2010 and 2020, reaching roughly 730 GWh. However, the demand is estimated to rise fourfold to 3,100 GWh annually by 2030, reflecting a 16 per cent rise in CAGR between 2020 and 2030.
Net, net, the development of a robust domestic battery manufacturing ecosystem is crucial for meeting the anticipated demand for energy storage in the country. Moreover, focusing on the development of BESS technologies, supported by an affirming policy environment, would go a long way in ensuring that India’s endeavour to reach 500 GW of non-fossil fuel-based energy by 2030 is successful.
By Kasvi Singh
