India and its sprint into embracing Energy storage

Context 

With climate change striking the globe, it has created a situation of extinction for humanity. The unfair aspect of climate change is that it may have an adverse effect on the poor and needy residing in less developed economies. A majority of such needy are already facing injustice for many years in terms of non-access to electricity and energy resources, and lack of education and health facilities. Climate change is just one additional form of injustice.

The world is trying to grapple with it. A supporting hand is provided by the adoption of clean energy sources. It can shift the electrifying world from its existing reliance on fossil-based fuels to get power from clean renewable energy (RE) sources. 

Unfortunately, even though we have found a technological solution (RE), there is a catch. The power generated from such RE sources is intermittent in nature i.e., they cannot synch their power generation in accordance with the load profile. Hence, the only option left is to store excess generation. For this, energy storage technologies would play a critical role. 

Why are we talking about energy storage?

Energy storage is gaining attention because – 

1. The generated electricity, whether from traditional sources or RE-based sources, needs to be consumed instantly. Energy storage provides flexibility in its usage. 
2. It can support in grid stability. With the ever-increasing electricity demand, installed generation capacity is also increasing. But with the enhanced focus on RE sources by nations which are intermittent, there is a threat looming on grid stability. Even the load is highly variable in nature. For this, flexibility has to be there in the grid. One way can be to store or release electricity as per the need. 

India is also focusing on the energy storage aspects. Many players are entering into this segment. Probably, in future, energy storage can be looked at as a service offering. 

Is it going to play a critical role?

India has set a target of installing 500 GW of RE capacity by 2030. India Energy Storage Alliance (IESA) has estimated that this target would entail 160 GWh of storage capacity requirement considering energy storage system (ESS) application of grid-scale storage (also referred to as front-of-the-meter) applications, renewable energy integration, distribution utility installation, ancillary services, and transmission investment deferral (Green Energy Corridor only).[1]

IESA also estimate that during 2019-2025, the cumulative potential for energy storage in behind the meter and grid side applications would be close to 190 GWh.[2] 

As per Niti Aayog's report, India will have a battery storage potential of 600 GWh by 2030. It will mainly be driven by electric vehicles, stational storage and consumer electronics.[3] It will create an investment opportunity of US $47.5 bn.

As per CEA in its “Report on Optimal Generation Capacity Mix for 2029-30”, battery energy storage is estimated to be 27 GW/108 GWh by 2029-30.

It is quite evident that a significant share would be captured by energy storage capacity. Hence, it is critical for overall India’s power system. Even India is expected to be one of the largest markets for energy storage by 2030.

If it is critical, then why it is stuck? 

Even though the storage system is critical and is bound to play a major role in the clean energy transition, there are various challenges prevailing against its growth. Some of the challenges are - 

1. Low mineral reserves – India has small reserves of key minerals required for lithium-ion (Li-ion) batteries. As per Niti Aayog's report, In Li-ion batteries, cathode materials vary, but common formulations include minerals such as lithium, aluminium, cobalt, manganese, and nickel, while the anode is made of graphite. India does not have reserves of some of the most important Li-ion components including lithium, cobalt, and nickel, nor, for that matter, of the copper used in conductors, cables, and busbars. Hence, reliable supply, not just of the raw materials but also of processed functional materials used in the anode and cathode, poses a challenge.
2. Low manufacturing capacity – Indian battery manufacturing industry is at a nascent stage. India has no major producers of EV batteries at present and lacks state-of-the-art facilities of both sufficient capacity and capability.[4] It made India to rely heavily on Chinese imports. For a country to prosper, foreign reserves are managed carefully, and imports are one way to drain foreign reserves. Hence, any country hesitates to rely much on imports. 
3. Geopolitical crisis – The prevailing Ukraine geopolitical issue and its effect in the form of the European energy crisis has one important lesson for India. It is to be self-reliant or aatmanirbhar. But the world is one global place where reliance on other countries is very complex, and self-reliance cannot be achieved in a short time. 

What is the solution?

It is apt that the problems are there, but the world is trying to find the answer. India is also strategizing for a way out. 

1. Boosting local production – India has come up with Production Linked Incentive (PLI) scheme. It encourages the development of local manufacturing that leverages India’s factor costs and scale advantages while also providing an export opportunity for a rapidly growing technology sector.  
2. Battery recycling – India has low availability of rare elements. Hence, recycling can generate a source for such rare elements. Using recycling technologies, 95% of metals can be recycled for use in manufacturing new batteries. Even Lithium batteries are almost entirely recyclable. As per Niti Aayog, new batteries would create a recycling volume of 128 GWh by 2030. Even the government is pushing for it through policy-level changes. Recently, Environment Ministry notified the Battery Waste Management Rules, 2022. 
3. Energy Storage Obligation (ESO) – Ministry of Power has issued ESO trajectory till 2029-30. It is introduced for the first time. The target is 1% during 2023-24 which will increase to 4% by 2029-30. It will be met through solar and wind power projects with energy storage. 

Conclusion 

The proliferation of renewable-based capacity out of climate change concerns is inevitable. With this, storage capacity would also play a central role in facilitating all these changes. Even the storage market in India is at a preliminary stage but with a greater push from the government and increased private sector participation, it is going to grow in the next decade. 

 (Note - This article is an expression of my personal views)

 Sources -

[1] https://indiaesa.info/resources/industry-reports/4164-iesa-vision-report

[2] https://indiasmartgrid.org/reports/ISGFESSReportFinal10Oct2019.pdf

[3] https://timesofindia.indiatimes.com/business/india-business/indias-battery-storage-potential-to-be-600-gwh-by-2030-niti-report/articleshow/93051324.cms

[4] https://www.niti.gov.in/writereaddata/files/document_publication/India-Energy-Storage-Mission.pdf