Energy storage represents a huge economic opportunity for India. Concerted strategies could help India meet its emission reduction targets
The Union government’s target of producing 40 gigawatt of rooftop solar power by 2022 is unrealistic: The country could produce only 4.4 GW rooftop solar energy till March 31, 2021, according to the Union Ministry of New and Renewable Energy.
Supportive policies and innovative technological approach are needed for the sector to achieve its potential. Indian policy makers need to plan for rooftop solar plus storage, rather than rooftop solar alone with grid as storage (net / gross metering).
The combination increasingly becomes cost-effective for electricity generation compared to the traditional grid supply and diesel generators.
In 2021, solar and storage will be cheaper than grid supply for most commercial and industrial (C&I) customers, according to a new report by the Institute for Energy Economics and Financial Analysis (Ieefa).
It found that the levelised cost of energy for a 1 MW rooftop solar system can couple to 250 kilowatt of energy storage with a backup of four hours. The same can reduce its cost to Rs 6.6-6.8 / kWh by 2022.
This is less than the grid tariff for most C&I consumers and below the cost of power produced by diesel generators.
The increase in penetration of rooftop solar in the distribution grid will have a significant impact on the stability of the grid. Besides, the Union government’s programme of electrifying transportation will witness many electric vehicles getting connected on the low-voltage distribution grid, putting substantial stress on the already inadequate infrastructure.
In order to integrate rooftop solar and electric vehicles, the grid needs to be flexible and smart. Energy storage systems will play a key role in providing this flexibility by acting as a load when there is surplus generation, as well as generating source when there is supply shortage. It will, thereby, stabilise the grid and smoothen the output of the solar rooftop.
The declining cost of storage solutions, along with that of rooftop solar solutions, is likely to change the future of the Indian power sector. Several countries such as Australia, the United States, Germany, among others have already endorsed solar power with battery storage.
Rooftop solar with storage system is a beneficial for both, end consumers as well as discoms (power distribution companies).
There are two major methods of integrating battery storage into the electric grid. One is implemented at the utility scale, wherein the battery system is connected to the transmission or distribution network that ensures grid reliability. This happens on a considerably large scale (~MWh scale) and is termed front-of-the-meter application / stationary storage.
The other method is implemented at the residential and commercial / industrial level, mainly to provide back-up during power failure or to store excess locally generated energy from solar rooftop photovoltaic (PV) systems.
Such applications are termed behind-the-meter (BTM) storage.
Globally, energy storage has been picking up mainly on the utility scale and is slowly making its way into the BTM storage sector. A recent report by Bloomberg predicts that utility-scale applications will dominate the total number of energy-storage-installations by 2040.
A number of storage tenders have been floated recently in India, pushing together large-scale solar and wind projects. The government will float tenders for sourcing 4000 MWh battery storage, power and renewable energy minister RK Singh said July 15, 2021.
Solar energy by itself is not interchangeable with the base-load sources of fossil fuel energy such as coal and diesel. Yet, by pairing with energy storage solar firms, it may be able to displace fossil fuel generators.
About 34 GW / 136 GWh of battery storage is expected to be installed by 2030, according to Central Electricity Authority of India. This capacity would be used for RE integration, demand side and peak load management services.
Though the solar segment offers a huge market opportunity for advanced battery technologies, manufacturers have some ground to cover in addressing technical limitations of batteries, such as charging characteristics, thermal performance and requirement of boost current to charge deep cycle batteries.
Since solar companies may directly procure batteries from manufacturers and require after-sale services and technical support, battery companies should have wider a presence to address these expectations.
Energy storage, therefore, represents a huge economic opportunity for India. Specific goals and targets, concerted strategies and a collaborative approach could help India meet its emission reduction targets while avoiding import dependency for battery packs and cells.
This could help establish India as a hub for cutting edge research and innovation, boost its manufacturing capabilities, create new jobs and foster economic growth.
Creation of a conducive battery manufacturing ecosystem on fast track could cement India’s opportunity for radical economic and industrial transformation in a critical and fast-growing global market.
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