The power sector in India is undergoing a major transition owing to significant renewable energy integration. The government’s ambitious renewable energy target will further drive the deployment of energy storage systems (ESSs) in the country. The growing share of variable renewable energy sources, such as solar and wind, calls for a more flexible energy system to ensure that these sources are integrated in an efficient and reliable manner. Battery storage systems are emerging as one of the potential solutions to increase system flexibility, owing to their unique capability of quickly absorbing, holding and then reinjecting electricity. Unlike conventional storage systems such as pumped hydro storage, batteries have the advantage of geographical and sizing flexibility and can, therefore, be deployed close to the location where additional flexibility is needed and can be easily scaled.
Energy storage market
The deployment of ESSs is increasing day by day. The US, China, Korea and Japan are leading the world in terms of ESS deployment. The cost of batteries has reduced considerably over the years and stood at about $176 in 2018. In India too, companies such as Suzuki, Exide and Tata Chemicals have announced their plans to set up battery manufacturing plants.
Tata Power Delhi Distribution Limited (TPDDL) has installed a 10 MWh grid-scale battery energy storage system (BESS) and another 600 kWh community-level storage project in Delhi. The 10 MWh BESS was commissioned in February 2019 and has been providing grid support to the utility. It features a lithium-ion (Li-ion)-based battery supplied by LG and a battery management system by Fluentgrid. The BESS is interconnected with supervisory control and data acquisition (SCADA), isolation transformers, and switchgear and protection systems. The applications of the BESS include emergency power supply to select consumers, peak load management, deviation settlement and frequency regulation. The system also helped the utility to manage the load curve during the recent solar eclipse. With the commissioning of the BESS, TPDDL has been able to achieve savings worth Rs 21 million, by avoiding penalties that were earlier accrued due to power overdrawal from the grid.
BSES Yamuna Power Limited (BYPL) has been focusing on energy storage and mobility over the past two years. The utility is also undertaking pilot projects in the areas of blockchain peer-to-peer trading in collaboration with the Indian Institute of Management, Ahmedabad, and smart electric vehicle (EV) charging, auto demand response and microgrids. The key factors for implementing ESSs include application (behind the meter or in front of the meter), choice of grid-scale versus distributed technology, battery chemistry, project location (indoor or outdoor), space constraints, network congestion, deviation settlement and renewable energy integration. BYPL is undertaking various projects in the energy storage space. The utility has implemented grid-tied ESSs, with solar microgrids at four of its office locations. These storage systems have helped reduce the utility’s dependence on diesel gensets as well as helped reduce deviation settlement mechanism (DSM) charges. BYPL has also issued a purchase order from a 1 MWh ESS project at the 11 kV substation level, aimed at decongesting the low tension distribution network and maintaining the load curve. Further, the utility is undertaking a feasibility study for a grid-scale ESS project.
Battery storage technologies
For selecting appropriate battery storage technologies, six parameters need to be considered such as energy, power, life cycle, safety, environment and cost. Some other additional parameters include operating temperature and fast charging ability. Various battery technologies have been developed at the global level, suitable for both stationary applications and transportation markets. Different battery storage technologies, such as Li-ion, sodium sulphur and lead acid batteries, can be used for grid applications. However, in recent years, most of the market growth has been seen in Li-ion batteries. The increasing share of Li-ion batteries in storage capacity additions has been largely driven by declining costs of Li-ion technology, which has, in turn, been driven by the ramp-up in production to meet the growing demand for EVs. Li-ion batteries have high power and energy density, along with a competitive cycle and calendar life, which justifies their use and consideration for a wide variety of applications from electric mobility to off-grid solutions. However, the limitations of battery storage systems include low life cycle and high conversion cost.
Batteries for renewable energy integration
There is a change in India’s energy dynamics in light of renewable energy penetration, mainly as solar and wind energy sources are intermittent in nature, and their integration into the grid poses problems. Hence, balancing renewable energy involves issues such as frequency and voltage fluctuations, besides the cost involved.
Since energy generation from renewable projects depends on day-to-day weather conditions, it is difficult to forecast their output with a high degree of accuracy. The energy produced is highly variable and intermittent in nature, which affects power quality when it is integrated into the grid. This can lead to voltage sags and swells, frequency deviations, flickers and fluctuations, and voltage spikes in the power system, posing a challenge to maintain a balance between the load and generation.
While the cost of renewable energy generation has come down, when we add the balancing cost of Rs 1.10 per unit and the stranded capacity cost of about Re 1 per unit, the overall cost increases. Also, stranded thermal power capacity in the country is creating financial stress in the power sector, as the plant load factor is expected to come down to 55 per cent in 2019-20.
Although solutions such as DSM and renewable energy forecasting and scheduling are evolving, more measures are needed for balancing the grid. Besides, managing the load curve and not enhancing the generation capacity based on peak load are recommended.
Some other solutions to challenges posed by renewable energy integration include the flexibilisation of thermal power plants, automatic generation control, dynamic regulation of solar projects and BESS. BESS can play a pivotal role in maintaining grid stability and managing the variation between demand and supply. The cost of batteries is expected to decline further in the next few years, which could result in increased deployment of BESS. Further, the United States Agency for International Development (USAID), India, is involved in implementing a BESS pilot project at Puducherry in collaboration with Power Grid Corporation of India Limited. The project is equipped with advanced lead acid and Li-ion batteries and is interconnected with SCADA, battery management systems and software logics. So far, the project has demonstrated benefits of frequency regulation and voltage/reactive power support.
Battery recycling and disposal
Battery life cycle management is fast emerging as a lucrative business opportunity. It is driven primarily by the anticipated EV demand, increasing regulatory push, and some useful capacity left in used EV batteries. Industry participants are exploring both repurposing and recycling to derive value over the life cycle of a battery to both lower the upfront EV costs as well as develop new revenue streams.
Recycling refers to the extraction of high-value minerals from existing battery cells after their useful first, second or third life cycles. The rising stockpile of Li-ion batteries from EVs, solar rooftops and other storage applications has necessitated battery recycling, as Li-ion poses the risk of personal injury, property damage and environmental hazard, if not properly recycled or disposed of.
Repurposing of the battery, driven by inventory management technology solutions such as blockchain, can lead to the development of a battery exchange platform, wherein the battery is circulated amongst various stakeholders in different life phases and is controlled through a centrally managed platform. Further, EV batteries have a shelf life of less than 10 years, and after 8-10 years of usage, they are not considered fully functional to power an EV. Also, India does not have any policy framework or mechanism for battery recycling and a second-use market. Although there are many hurdles in the adoption of energy storage in the country, there is an opportunity to foray into a new segment in the energy sector by addressing these challenges and leveraging drivers of energy storage in the country to become an energy manufacturing hub.
Conclusion
Net, net, the deployment of ESSs is increasing day by day and battery storage systems will help reduce the power purchase cost of discoms in the future. Recycling of existing batteries and the need for India to focus on sustainable energy storage technologies is of utmost importance.
Further, utilities will be focusing on the scalability of grid storage solutions along with a cost-benefit analysis, but greater policy and regulatory focus is required for BESS. The government’s facilitation and the regulatory maturity of the market will influence the value and utility of storage systems. Regulatory policies will supersede technological advancements in terms of influencing storage adoption. The Central Electricity Regulatory Commission is currently working on revising the ancillary market mechanism in India to meet various challenges. However, battery storage needs to be an integral part of new regulations to provide frequency control and other services. Going forward, ESS will increasingly compete with other flexible sources, as renewable energy integration increases in the near future. n
Based on remarks by Arumugam Manthiram (via video), UT Austin; R.P. Singh, Chairman, Uttar Pradesh Electricity Regulatory Commission; RakeshTrakru, Senior Manager, Toshiba India; Nilesh Kane, Additional General Manager, TPDDL; MukeshDadhich, Assistant Vice-President, Sustainability, BYPL; and Satish Singh, Grid Interconnection Pilot Coordinator, USAID India Greening the Grid Programme, at the ISUW 2020 held in New Delhi