Energy Storage- potential to transform India's energy needs.

Energy Storage- potential to transform India’s energy needs

By- Dr. Rahul Walawalkar, Executive Director, India Energy Storage Alliance (IESA)

Policy makers in India have recognized the potential of energy storage that can help in Indian government to meet various policy priorities such as National Solar Mission, National Electric Mobility Mission and Mission for energy access. NITI Aayog as well as MNRE has been working on draft national energy storage mission for the past one year

The market for energy storage in the South Asia is dominated by India. India’s energy storage market is dominated by lead acid batteries with annual sales of $6 Billion. IN past 2 years, India has also witnessed deployment of over 1.5 GWh of Li-Ion batteries for distributed and transportation applications. India is now poised to adopt advanced energy storage technologies that can act as enablers for 21st century electric grid and transitioning to eMobility.

IESA estimates the market opportunity to be 50-70 GW (i.e. 150-200 GWh in terms of energy requirement) by 2022. Opportunities for energy storage in India cover full range of applications including grid scale energy storage for optimizing T&D investments and enabling renewable energy integration, to providing energy access through microgrids to over 20 crore people, to providing batteries for the ambitious electric mobility program where India is targeting to move to all EVs by 2030. These opportunities are expected to attract investment in 2-4 Giga factories for advanced Li-ion batteries in India, attracting over $3Billion in investments in next 3 years.India may have missed the manufacturing opportunity while adopting technology transitions such as cellular telephones and solar energy but there is still time to build a world-class manufacturing infrastructure for advanced energy storage.

Already, over 1 GWh of annual assembling capacity is being set up for converting imported Li-ion cells into battery modules by various Indian companies.Currently with high adaptation of renewable energy (solar & wind) and focus on electric vehicle & charging infrastructure in India, energy storage is becoming the emerging business growth area for startups as well as large business houses. Opportunities include manufacturing, assembling, energy storage project development, equipment supply, R&D of technology enhancement and much more. In this regards,many Indian companies are eying to enter India’s storage market while a few Indian companies are also diversifying their existing business into energy storage space.

Photo Credits :   Energy Storage device container from Delta

During 2017,100 MWh+ of energy storage tenders were released by MNRE. Energy Efficiency Services Ltd (EESL) has also concluded world’s largest procurement of 10,000 EVs in a single tender. IESA expects solar integration, electric vehicle & charging infrastructure and Commercial & Industrial applications will act as catalyst for energy storage adaptations in India.

Policy makers in India have recognized the potential of energy storage that can help in Indian government to meet various policy priorities such as National Solar Mission, National Electric Mobility Mission and Mission for energy access. NITI Aayog as well as MNRE has been working on draft national energy storage mission for the past one year. According to the policy makers the biggest challenge for storage is the higher upfront cost. Luckily globally the prices for storage technologies are reducing rapidly and have fallen by 90% in past 10 years. We are also confident that with local manufacturing, we can accelerate this cost reduction.

At the same time, there are other challenges on the policy front. The main policy intervention required is need for transparent price signal for electricity that values the peaking power and flexibility. We also need removal of barriers such as higher GST (18% for batteries vs 5% for solar) and import duties for kick starting market for advanced energy storage in India.

India has an ambitious plan of 170 GW renewables by 2022, including 40 GW of rooftop solar, 60 GW of grid-scale solar and 60 GW of wind. The key challenge for reaching these targets would be the ability of the grid to integrate variability associated with these renewables, as well as huge investment required for upgrading the T&D infrastructure.Energy storage can help in better integration of these renewable by providing multiple values to the system such as optimizing T&D investments, addressing forecasting errors in wind and solar generation for more accurate scheduling, addressing local reliability issues by providing reactive power support and also enabling end users for managing peak load and more efficient utilization of distributed renewables etc. With the rapid reduction in cost of both solar and storage, customers can see solar plus storage as an alternative for peak power from grid at the same time, utilities can avoid investments in Peaker capacity or eliminate load shedding by utilizing these resources.

Achievements – 2017

Energy storage industry will look at 2017 as a year, when India crossed 2 GWh of sales of advanced energy storage solutions. eRickshaws and telecom tower has been the sectors that led to the early deployment. Also this is the year, when Indian industries have started investing in setting up manufacturing capabilities for developing li-ion battery packs in India. There were over 100 MWh of Grid scale energy storage project RFPs released during 2017, unfortunately most have been stuck due to mixed signals from MNRE. We anticipate most of these projects can move forward in 2018.

Looking ahead – 2018

By mid-2018, India will have over 1 GWh of li-ion battery pack manufacturing capacity. We also anticipate that in 2018 at least two li-ion cell manufacturing plants with capacity of 500 MWh or more will start construction in India with anticipated completion for end of 2019 or early 2020, bringing India on the global map of Giga Factories. With introduction of various EVs (across 2W, 3W, 4W and commercial vehicles), India will start witnessing adoption of EVs in 2018, fueled by central procurement led by EESL and various state agencies. 2018 should also witness pickup of EV charging infrastructure deployment in various metro cities. Stationary energy storage market will also start seeing tracking with MW scale deployments for both renewable integration as well as C&I applications.If we start deploying energy storage projects in a systematic manner this can create a huge interest for local manufacturing and system integration capabilities. IESA has set a vision to make India, a global hub for manufacturing of advanced energy storage systems, and we hope that with a little consistent policy direction and support in implementation, we can achieve this dream by 2022.