Emerging Areas of Opportunity

Scope and potential of storage and charging infrastructure

In the panel discussion on “emerging areas of opportunities – storage and charging infrastructure”, senior government officials and industry experts reflected on the future of e-mobility in the country as well as the scope of battery storage solutions in the emerging power sector. The panelists were Saurabh Kumar, managing director, Energy Efficiency Services Limited (EESL); Sanjay Banga, chief executive officer, Tata Power Delhi Distribution Limited (TPDDL); Rupam Raja, market director, India & Southeast Asia, Fluence; and Atul Arya, head, energy systems, Panasonic India. Power Line presents an overview of the discussion…

(From left) Sanjay Banga, Chief Executive Officer, Tata Power Delhi Distribution; Saurabh Kumar, Managing Director, Energy Efficiency Services; Atul Arya, Head, Energy Systems Division, Panasonic India; and Rupam Raja, Market Director, India & Southeast Asia, Fluence

E-mobility and EV charging

In the e-mobility space, EESL is electrifying the fleet of government vehicles. It has replaced 1,000-1,500 diesel and petrol cars with electric cars. It is also tying up with taxi aggregator Blu Smart for promoting shared electric mobility. The company will first roll it out in Delhi and then in Mumbai. EESL is also setting up charging stations in areas of central Delhi. It has energised about 20 stations and at least half of them have recorded a utilisation level of more than 20 per cent in the first year itself. The company has signed MoUs for setting up charging stations across 11 cities in the country. These stations will be completely mobile app-based, unmanned charging stations. EESL aims to set up 1,000 charging stations in 6-12 months. EESL is expected to be one of the key players in the charging point operator domain.

Apart from this, in order to promote electric vehicles, various original equipment manufacturers are looking to set up their own charging infrastructure. This would encourage non-energy companies to foray into the storage and charging infrastructure space.

Battery storage

With more and more renewable energy coming into the grid, there is a greater need for the adoption of energy storage solutions. In TPDDL’s licensed area alone, around 25 MW of solar capacity has been installed in the past two years. This is expected to go up to 100-150 MW. Delhi currently faces a gap of 60-70 per cent in peak and off peak power demand. Utilities are exploring technologies that can flatten the load curve and also reduce cost of power. To this end, TPDDL has set up a 10 MW storage plant in partnership with Mitshubishi and the AES Corporation. The plant will be run on technology from Fluence. The plant is being used by the discom for deviation settlement mechanism.

With regard to battery storage solutions, there are opportunities to deploy behind-the-meter storage solutions at commercial and industrial establishments facing issues pertaining to quality of power, excessive use of diesel or high demand charges. Besides this, batteries can be used as a substitute for diesel gensets. Telecom towers across the country can be run on batteries instead of diesel generators in case of no power. Another use case for energy storage is for transformer maintenance. Mobile battery storage systems can be used for providing 24×7 power supply to consumers when the transformer is under maintenance.

In terms of MW-scale grid-connected battery storage solutions, various regulatory approvals are required for operationalising such a project. Besides this, the regulator has to be doubly sure that the investment will be beneficial for electricity consumers.

Overall, there is a need for a regulatory mechanism to promote investment in the battery storage segment. For utilities to buy power from battery storage systems, regulators should consider batteries as actual generators, with a separate framework on scheduling of power. Given the country’s load curves, if battery system prices drop, people will prefer storage systems over other power generation systems. Notably, battery at the distributed level also reduces losses.

For industrial consumers, battery storage plus solar is a viable option, especially in case of Delhi where industrial tariff is Rs 11 per unit. Since domestic consumer tariff is subsidised, in the time to come consumers might not even opt for solar power. Pilot projects have been undertaken for solar rooftop and battery storage at five locations in Delhi. In the past 10 months, except for peak summer when demand was extremely high, around 90-93 per cent of demand from each building was being met from  solar and battery backup, and only about 6-7 per cent was from the grid.

Multiple revenue streams

Gas can be used for ancillary services in a big way, especially with large-scale renewable energy integration into the grid. Gas engines can be used for cooling purposes and for providing electricity at a decentralised level. Assets such as batteries and gas engines need to be looked at as multiple revenue streams. EESL is putting up around 1,000 122 kW charging stations in Delhi, resulting in around 120 MW of decentralised storage. If regulations allow energy arbitrage and demand response, then Rs 13-Rs 14 per unit will give enough money to sustain investments in battery storage. In the EV charging and battery storage domain, some of the revenue streams that can be simultaneously explored include arbitrage for charging (Rs 3 per unit) and demand response (Rs 3-Rs 4 per unit). With multiple revenue streams, Rs 12-Rs 13 per unit makes a lot of sense. If EV charging and battery storage is broken down into three-four separate revenue streams, the whole issue of commercial viability ceases. However, in order to operationalise various revenue streams, there is a need for cross-cutting regulations.

Regarding the pricing of ancillary services, the capacity charges could be discovered through the international or domestic bidding process. Meanwhile, the variable charges could be around Rs 6-7 per unit. Overall, there is a primary ancillary service of about 4 GW. Presuming that all 4 GW is taken only for batteries at the current cost and is socialised across entire power generation, the cost will be less than a paise per kilowatt hour. Right now, regardless of time and availability of power, the price of DSM power is Rs 8 per unit. With the share of renewable energy generation growing, every discom would opt for DSM after 6 p.m., which might break down the system.

Conclusion

In sum, there are three to four emerging trends that are expected to shape the power sector in the future. First, renewable energy is expected to come up in extremely large numbers. India has already upped the ante for that. Second, grids are becoming “peakier”, largely because of pooling demand. Third, bigger cars are coming into the market. Even with 30 per cent e-mobility by 2030, the energy demand is expected to grow by 3 per cent while the peak demand is expected to record a 6 per cent growth. Fourth, there is an enormous advantage of using storage batteries. In order to capitalise on the opportunities in the power sector, there is a need for cross-cutting regulations. With the emergence of multiple revenue sources in the EV charging and battery storage space, concerns around commercial viability of these systems will get resolved.

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