India’s Energy Storage Market

The Government of India has come up with an ambitious plan to deliver 175 GW of renewables by 2022 and 24x7 power for all by 2019 by creating an efficient, resilient and financially sustainable power sector. Furthermore, India in the recent COP 21 has committed to generating 40% power from clean energy sources by 2032. This objective, along with clean energy access, has become the center of all plans around economic development and the environment. With the recent focus on electric mobility, India is more dependent on battery & energy storage technologies. Energy storage technologies have huge potential to significantly contribute to the transformation of the Indian electric grid towards a greener, resilient and reliable grid within the next decade.
 
In 2018, India’s total energy storage market from stationary applications was around 24 GWh. During 2019-2025, the cumulative potential of energy storage is estimated to be between 270 to 365 GWh on a business-as-usual and best=case scenario respectively. Several policies supporting the growth of energy storage in grid-scale applications are in the draft or proposal stage which is likely to get approved in the short term and expected to drive the market. Demand for energy storage in Behind the Meter (BTM) applications will account for ~70% of the cumulative market during 2018-2026. Inverters and telecom towers have a major share of the BTM market. SLDCs/RLDCs or DISCOMs would need to be mandated/incentivized to procure a minimum percentage of their reserves needed for frequency regulation through electric storage. 2018-19 witnessed several renewable plus storage projects being floated by NTPC, SECI, State utilities/agencies such as AP Transco, Himachal renewables Ltd for peak management, DSM settlement, energy shifting, voltage support. Large ESS tenders such as the 3.2 GWh AP Transco and 3.6GWh SECI project announcements indicate the positive growth of the market during the forecast period. Besides, Central Electricity Authority (CEA) advocates storage systems for the capacity to accommodate 2.5% of RE generated in a day in all projects to curtail 1% of RE generation to maintain a Minimum Thermal Load (MTL) on Thermal power plants.
 
The Indian energy storage market is currently flooded with multiple energy storage projects in the first quarter of 2019. Presently, India already installed 14 MWh of large scale storage for grid & renewable integration though pilot & demonstration projects at different locations. Apart from these commissioned projects, ~50 MWh of energy storage projects in India are on the verge of tender allocation or at the construction stage. Islands like Andaman & Nicobar and Lakshadweep are seeing a large number of the tender announcement on energy storage by difference agencies like SECI, REIL, NTPC, and others.
 
Another large tender by a transmission utility has called for 400MW for 3-8 hours of storage for RE integration which would also create a 1.2 to 3.2 GWh RfP for storage. SECI also announced RfS for 1.2GW solar combined with 3,600MWh of energy storage. Detailed tender document yet to be released. CEA and CERC have already recommended the inclusion of energy storage with solar and wind hybrids, so we also anticipate that in addition to the 3.6 GWh storage project, other hybrid tenders will also have an opportunity for storage technologies to be included. This is the big and long-awaited step and we can see that in the 2019- Q1 the government's importance towards the sector after some unfortunate cancellations of tenders for over 100 MWh in 2017-18. IESA had strongly protested the cancellations and delays in implementation of the storage projects, and we are hopeful that this time, the government will prioritize these projects and see them through to implementation. 
 
The opportunities are there both for the stationary energy storage to help improve power quality & reliability as well as to help integrate renewable energy sources. Also, it is expected that in the next 3-5 years, Indian’s EV market will also witness exponential growth. Currently, several companies are importing Li-ion batteries from China, Korea, Japan, and the USA, but there is a growing realization that this is an area where India has an opportunity to also build a strong domestic manufacturing ecosystem. 
 
India is expected to attract investment in 2 to 4 Giga factories for advanced Li-ion batteries, attracting over $3Billion in investments in the next 3 years. Already, over 1 GWh of annual assembling capacity is being set up for converting imported Li-ion cells into battery modules by various Indian and global companies in India. This includes IESA member companies like EXICOM, ACME, Coslight, Delta, Future Hitech Battery, Euclion energy, Green Fuel energy, Vision Mechatronics, and others. Opportunities include manufacturing, assembling, equipment & raw materials supply, R&D of technology enhancement and much more. In this regard, 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. Looking at potential India has to create a 10-15 GWh capacity by 2022. And as this happens, ancillary development including module development, containers, transformers, inverters could need an equal amount of investment, taking the total potential to $6 billion. 
 
India’s energy storage market is currently dominated by lead-acid batteries with annual sales of over $6 Billion.  Various Indian companies have already entered the cell to pack assembling. But there is a huge opportunity in India for Li-ion cell manufacturing inside the country. Recently Raasi Group has taken the Li-Ion cell license from Central Electro Chemical Research Institute (CECRI) to manufacture Li-ion battery in India. Similarly, last year Maruti Suzuki India Ltd (MSIL) in collaboration with Toshiba and Denso also announced to set up a Lithium-ion battery production facility purely dedicated to automobiles. The plant is expected to be up and running by 2020 – and will be constructed in a supplier park close to the carmaker’s production facility in Hansalpur, Gujarat.
 
Last year more than 137 companies showed their interest to license the Indian Space Research Organization’s (ISRO’s) Li-ion technology to manufacture batteries in India. More than 110 new start-ups and large companies attended the pre-bid conference at Vikram Sarabhai Space Centre (VSSC) at Kerala and ISRO have finalized 10 companies to license its technology for Li-Ion Cell manufacturing including IESA member companies like EXICOM and others. Munoth Industries Limited has also announced an investment of INR 799 crores to set up a Lithium-ion cell production project in Andhra Pradesh, which will allow the smartphone industry to build its battery components instead of importing. Exide Industries Ltd., an Indian lead acid storage battery manufacturer, and Leclanche, a global energy storage solutions provider, has formed a Joint Venture (JV) to build Lithium-ion (Li-Ion) batteries and provide energy storage systems for India’s electric vehicle (EV) market and grid-based applications. The JV will focus on e-transport, stationary energy storage systems, and specialty storage markets. The industry hopes that this big announcement will take a real picture soon. New companies like Bharat Energy Storage Technology (BEST) also announced to set up a thermal storage manufacturing plant in Andhra Pradesh in the next 2 years. Apart from these announcements, various Indian conglomerates are now evaluating the advanced energy storage business to enter as a manufacturer, component supplier or assembler.  State Government like Andhra Pradesh, Gujarat, Maharashtra, Kerala, Karnataka, and Telangana are providing ample opportunities & incentives with a suitable policy framework to industries to set up their energy storage manufacturing plants in their states.
 
There is some discussion happening in the industry on raw material availability. The government is already taken an active step for bilateral agreements with Lithium and Cobalt rich nations like Bolivia, Chile, Argentina, Congo, Canada, and Australia or to foster the R&D and exploration of raw material mines in India. Recently, India and Bolivia have signed a Memorandum of Understanding (MoU) for the development and industrial use of lithium for the production of lithium-ion batteries.
We are happy about the recently launched the National Mission for Transformative Mobility with Phased Manufacturing Program for li-ion battery manufacturing by NITI Aayog. Ministry of Heavy Industries has launched FAME -2 (Faster Adoption and Manufacturing of Electric Vehicles) incentives with a budget of Rs 10,000 Cr.   India is also focusing on domestic manufacturing for all types of energy storage technologies including advanced lead-acid, thermal storage and ultra-capacitors apart from Li-ion batteries. Ministry of Science and Technology is also keen to accelerate domestic R&D capabilities to support this growing industry through Mission Innovation. 
 
Advanced energy storage technologies can play an important role in renewable integration, energy access, electric mobility and the smart cities initiatives of the Indian government. We are at a critical stage for building a manufacturing ecosystem for advanced energy storage technologies in India. Around the globe, over 200 GWh of advanced energy storage manufacturing capacity is already built and another 200 GWh of new capacity will be built within the next three to five years. With appropriate government support, industry participation, India will be one of the top markets for energy storage adoption and manufacturing.
| Article published on 18/07/2019 by Moulin

 
 
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