Energy Storage Systems: Business Models and Regulations

The Plenary Session-4 was on energy storage systems, and the associated business models and regulations. The session was chaired by P.C. Maithani, Advisor, Ministry of New and Renewable Energy, Government of India, and moderated by Rahul Walawalkar, Chairman, IESA. It included presentations by Patrick Clerens, Secretary General, European Association for Storage of Energy; Amy Rose, Member – Grid Systems Group, NREL; Ramaswamy Murugan, Puducherry University; Mani Khurana, Senior Energy Specialist, World Bank; Jyoti Parekh, Executive Director – IRADe; Nilesh Kane, Additional General Manager, Tata Power Delhi Distribution Limited; Naveen Nagpal, GM Renewables, BSES Rajadhani Power Limited; J.K. Sarin Sundar, Applied Materials; Rashi Gupta, Founder and Chief Executive Officer, Vision Mechatronics; and Kondalarao Bavisetti, Hitachi ABB Power Grids.

P.C. Maithani began by stating that energy storage has come to the centre of action in the renewable energy space. Decarbonisation depends on how fast storage technologies are being developed. In the Indian context, achieving the ambitious targets that have been set for 2022 and 2030 will not be possible without energy storage support. Grid augmentation and storage is expected to play a key role in the growth of renewables.  The government is set on a mission to create an ecosystem for storage. Different tenders for renewable energy with a storage component have also been issued. Storage will be transformed for mobility as well, especially for metros and automobiles. There are three important points that we look to address, where we are and the current technology trends, likely scenario in the coming years for techno-economic progress, and the outlook for India as well as the world.

Clerens pointed out that electricity should be compatible with use, which is where energy storage plays a crucial role. Energy storage offers highly reliable, predictable and accurate flexibility to the grid, independent from external factors. To achieve the ambitious renewable energy targets, new flexibility sources have to be deployed to integrate the variable sources with minimum curtailment and at an optimised system cost. Flexibility plays a crucial role in ensuring secure and cost-effective operation of the network. With higher uptake, the costs for energy storage solutions are expected to reduce. Energy storage provides flexibility to the system at various time-scales, from seconds and hours to weeks and months. While technologies such as batteries can be used for shorter duration storage, hydrogen can be used for longer durations.

Rose, mentioned that there is an increasing interest in energy storage around the world. This interest is driven, in part, by the ability of many storage technologies to play multiple roles in the power system. The technologies can charge and discharge to meet the energy needs. The unique features of energy storage technologies pose new questions for policymakers and regulators regarding the role that storage should play in the system. Enabling energy storage policies and regulations should focus on establishing a level-playing field for energy storage to compete with other technologies to provide grid services. The technical characteristics of the Indian power system are favourable for storage investments, but institutional barriers remain.

Murugan emphasised that we need to think about the requirements of the future battery, whether it is for stationary storage or for use in electric vehicles. When comparing a specific capacity of various anode materials, lithium still continues to dominate. However, lithium is still relatively costly. There is active research going on in developing different technologies based on Li-ion. The biggest challenge has been to find the right electrolyte. Lithium garnets are the most attractive system for solid state batteries. They are stable against metallic lithium, have good lithium-ion conductivity as well as a wide electrochemical window. There are several advantages of solid state batteries such as increased safety, longer life span and larger operating temperature range.

Khurana talked about credit lines being extended by the World Bank for the development of battery storage. The identified demand for energy storage comes from the following: 40 per cent from e-mobility, 30 per cent from stationary and 20 per cent from consumer electronics. Policy, regulatory, technical and financial interventions are required to facilitate financing for battery storage. Beyond the usual advantages, there is a specific advantage of battery storage in the Indian context. Battery storage can be very effective in levelling the outputs of variable renewable energy generators and ensuring that they meet their committed levels of output, thereby avoiding exposure to the costly deviation settlement mechanism.

Jyoti Parekh talked about how achieving net zero emissions by 2050 is a very tough challenge, which only a very few countries can manage. The rise of renewables in a big way is possible only in partnership with storage. Over the past decade, the industry has been working on storage technologies, which have been maturing. Now it is time for storage revolution to join the technologies like solar, which picked up in the past decade. We are looking at many types of storage applications for stand-alone, mini-grid, as well as grid-size storage. For all of these, multiple types of options need to be looked at. To be able to create and service demand, we need to give signals to the industry that we need to move on from petroleum and fossil fuel-based automobiles.

Kane highlighted that decentralisation, decarbonisation and digitalisation are reshaping the power sector, requiring the shift in approach from traditional utility centric to consumer centric. Battery energy storage solutions meet the challenges faced by utilities in managing the peak power demand, decongest and optimise the utilisation of distribution network, and provide resilience to the grid and grid security. Energy storage also helps to integrate renewable energy on the grid and reduce dependency on expensive fossil fuel-based power plants.

Naveen Nagpal talked about the power demand in Delhi. For Delhi’s power demand, there is a large seasonal and diurnal variation in demand. Adding to this, there is some supply-side variation due to increasing renewable energy in the portfolio. Further, the peak load has been increasing at a faster rate than the base load. With new disruptors like electric vehicles and rooftop solar installations, new challenges come in, bringing demand-side as well as supply-side variability. There is a challenge for the power distribution utility to maintain the power drawal schedule as per the deviation settlement mechanism. Energy storage is necessary for flexibility in a scenario with high variable renewable energy. Like RPO targets, procurement from energy storage should also be made mandatory.

Sundar discussed that in terms of battery energy density improvements, higher energy density is very important for all industries. Design changes have also improved in addition to chemistries. The roadmap for anode material is available, but has fundamental challenges such as first cycle loss. Among upcoming technologies, high content Si anode enables increased energy density and fast charge. We need to accelerate the adoption of EV over ICE as well.

Gupta discussed how no single energy storage solution can be used for all kinds of projects. Currently, lithium-ion batteries are the most popular due to their high energy densities and long life. Non-lithium-based batteries such as fuel cells, flow batteries, sodium sulphur batteries are also expected to scale up. Remote monitoring and IoT is also predominantly increasingly being used in energy storage. The life and efficiency of batteries is also being improved with advanced battery management systems. India has advanced battery management systems in place for a utility-scale system as well. Quality control is crucial with the growing need for energy storage. Safety norms and packaging need to be taken care of. Another important use case scenario to evaluate is the second life of batteries. An accurate estimation of the remaining capacities of batteries needs to be done.

Bavisetti highlighted that economic and population growth is expected to lead to increasing demand for power. Further, due to the retirement of coal plants and growth of renewables, there will be a need for storage, which can provide ancillary services and manage the intermittency of renewables. Also, more users of EVs can increase peak loads, placing more strain on the electrical grids. The challenges facing a utility distribution feeder include postponement of grid upgrades and integration of distributed renewables and electric vehicles. Many existing distribution feeders cannot host expected EV demand and solar PV generations. This presents an opportunity for decentralised, non-wires alternatives.

In his closing remarks, Walawalkar noted that over the past five years, the policy framework for energy storage and electric vehicles has evolved. The energy storage sector is showing a similar learning curve for cost reduction as exhibited by the solar industry. Various energy storage technologies are seeing significant performance improvements and cost reduction trends over the past decade and this is expected to continue over the next decade. Apart from electrochemical batteries such as lead acid, li-ion, flow batteries and metal air batteries, research is taking place in thermal and gravity storage. IESA has set a vision to make India not just a market, but a global hub for R&D and manufacturing of advanced energy storage and EV systems by 2022.

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