Energy storage is an integral component of electricity generation, transmission and distribution systems. Traditionally, energy storage needs have been met by physical storage of fuel for thermal power plants as well as through large-scale pumped hydro storage plants. However, the power landscape has changed with a focus on renewable energy generation, mainly wind and solar photovoltaic (PV). This shift has made delivering reliable power a big challenge. Wind and solar power installations generate power only intermittently and with a highly variable output. Furthermore, unlike a traditional centralised generation plant, these new sources may be located anywhere, including remote locations.
Such fundamental changes in the grid call for smart and efficient power transmission and distribution (T&D) networks. They require energy storage solutions at appropriate locations to balance the gap between generation and consumption and maintain grid stability. Integrating battery energy storage systems (BESS) with smart grids is thus an important requirement for modern power systems.
Advantages of BESS integration with smart grids
The smart grid integrated with BESS can be treated as a single huge resource serving multiple applications. The BESS integrated smart gird can provide benefits such as deferral of T&D equipment upgrades and replacements; avoidance of combustion turbines by providing dispatchable local energy storage sources; reduced ramping impacts (both wear and tear and reduced efficiency) on fossil generators caused by renewable energy intermittency; shift in wind and solar energy generation from primarily off-peak to meet daily peak needs, etc. Some other benefits are provision of arbitrage opportunities by allowing load serving entities or consumers to buy and store low cost energy during off-peak periods to displace much higher cost generation during peak periods; provision of ancillary services such as high-cost frequency regulation, as well as spinning reserve and black start capacity; reduced T&D line congestion and electrical losses by placing batteries at T&D interfaces, on distribution circuits and next to customers.
With the integration of BESS, there will be improvement in power quality and reactive power dispatch, enabled by high speed, flexible power electronic battery-to-grid interfaces; and improvement in voltage recovery as well as possible avoidance of voltage collapse. This technology can also enable rapid charging of electric vehicles (EVs) without expanding the existing distribution system. Apart from this, it will enable islanding of a grid into multiple micro-grids; transient stability support for very weak networks. The integration of BESS will also yield multiple environmental benefits by displacing peaking combustion turbines, enabling renewable generation, and reducing T&D losses.
According to the ISGF, the energy storage market in India witnessed 23 GWh of battery storage demand in 2018, of which 56 per cent came from the inverter segment. The EV industry consumed over 5 GWh of batteries in 2018 in India. This number is likely to reach over 36 GWh by 2025. Further, India is expected to require 9,645 MWh of battery storage by 2022. Of this, 6,000 MWh is expected for the low voltage (LV) grid and 3,645 MWh for the medium voltage (MV) grid. By 2027, this requirement is expected to increase to 24,013 MWh, with 15,220 MWh in the LV grid and 8,793 in the MV grid. In 2032, India is expected to have a BESS requirement of 34,389 MWh – 22,294 MWh in the LV grid and 12,095 MWh in the MV grid.
In October 2021, the government released a public notice to bring out a comprehensive policy on energy storage in the power sector. The policy would broadly focus on regulatory, financial and taxation, demand management and technological aspects to speed up the implementation of ESS and thus absorb the large-scale renewable energy into the system in the coming years. It also plans to set up a 14 GWh grid-scale BESS at the world’s largest renewable energy park at Khavda, Gujarat. Further, bids have been invited for the largest global tender for setting up a 13 GWh grid-scale battery storage system in Ladakh. The government also plans to invite bids for setting up around 4 GWh of grid-scale BESS at the regional load dispatch centres. Last year, NTPC Limited floated a global tender for setting up a 1 GWh grid-scale BESS.
To attract investments in the sector, SECI has awarded key tenders in recent months. In August 2021, Tata Power Solar Systems was awarded a Rs 3.86 billion order to build a 50 MWp solar PV plant with a 50 MWh BESS at Phyang village in Leh. The commercial operation date is set for March 2023 and this project will be India’s first co-located large-scale BESS and the first large-scale solar PV project in the union territory of Ladakh. In December 2021, SECI awarded a contract to Tata power Solar Systems for setting up a 100 MW (AC) solar project with 40 MW/120 MWh BESS at Rajnandgaon, Chhattisgarh.
The way forward
Overall, with India targeting 500 GW of renewables by 2030, BSS deployments are expected to pick up pace in the next few years and policymakers will need to integrate BESS in their energy master plans. There is also need for increased incentives for the development and financing of BESS projects such as loan guarantees for first movers, low interest loans and grants.