What Lies Ahead: A decade of energy storage and tremendous opportunity

A decade of energy storage and tremendous opportunity

By Dr Rahul Walawalkar, President and Managing Director, Customized Energy Solutions India Private Limited; President, India Energy Storage Alliance

Every year, September 22 is observ­ed as World Energy Storage Day globally. Over the years, energy sto­rage has been deemed as the Holy Grail for reducing greenhouse gas emissions as we rally towards electrifying vehicles and decarbonising our energy grid. In fact, energy sto­rage is increasingly being recogni­sed as a diverse asset class of diff­er­­ent technologies and applicatio­ns. Whether on the generation transmission and distribution, or customer side, there are different value propositions that can be captured by different stakeholders in the industry. We strongly believe that this decade (2021-30) is the decade of energy storage, with tremendous opportunities.

World over, supportive policies have played an important role in adv­­a­ncing the manufacturing and market for energy storage te­c­h­no­logies, thereby addressing the technology risk and the barr­i­ers to market development. In fact, in countries around the globe, apart from central/federal government policies, several state governments are actively taking the lead in drafting policies that promote giga-factories, and provide investments, tax credits and incentives to consumers. All these measures are critical for the development of battery manufacturing hubs.

Improving energy security through the domestic supply chain

Internationally, the Covid-19 pandemic has brought to the fore the challenge that lies ahead if countries rely only on one supply chain partner/region. As a result, several regions have now started to think of energy security as a key factor and have started promoting regional manufacturing hubs. Of the global regions, the most prominent expansion is under way in Eu­rope, where more than 600 GWh of advanced chemistry cell (ACC) storage manufacturing is expected to come up in the next five years – followed by the US, where 300 GWh of manufacturing capacity is expected to come up.

In India, the union cabinet has approved the ACC programme for 50 GWh of battery storage manufacturing. This has democratised the entire supply chain drastically from what it was only a few years back, and also created opportunities for India to emerge as an alternative market for the supply of components or other materials. Last month, as a part of the US-India strategic partnership on energy, the climate action and finance mobilisation dialogue was launched. The focus of the dialogue is on finance mobilisation, clean energy development and climate adaptation measures. The next two to three months are going to be critical for India, especially in terms of building investor confidence, as they will show if India leaps at the opportunities or ends up playing the catch-up game yet again.

Investment opportunities

Tremendous investments are taking place in advanced energy storage manufacturing in the US and Europe. Indian companies are also showing interest in obtaining a piece of the pie. Recently, Amara Raja Batteries invested in Log9 Technologies and Reliance Industries announced investments in Ambri th­rou­gh Breakthrough Energy Ventures. Apart from this, over 10 corporate groups are interested in bidding for giga factories as part of the ACC battery manufacturing production-linked in­cen­tive scheme that is anticipated this month.

Globally, next-generation technology investments are driven by the automobile industry, given the role of advanced batteries in electric vehicles. Several companies like Tesla, Volks­wa­gen, Ford and General Motors are looking at next-generation battery technologies. At the same time, the competition for longer-duration energy storage technologies is heating up with the US Department of Energy announcing its Earth­Shot initiative to bring down the cost of longer-duration energy storage technologies by 10x in the next 10 years.

Beyond batteries, green hydrogen is an area of tremendous opportunity for renewable energy and energy storage to come together. Green hydrogen and advanced energy storage technologies are not competing, but can work together for faster decarbonisation of the grid, and the transportation and industrial sectors. Once this generation has been achieved, the opportunities are endless – refining, steel, fertiliser, methanol blending with natural gas. Further, India is looking at opportunities in electrolyser manufacturing, as part of the recently announced Green Hydrogen Mission.

What we are starting to see is that a range of energy storage technologies are poised to play a key role in decarbonising the electric grid, mobility as well as other industrial sectors.