Storage Need

Regulatory viewpoint on the requirement for ESS

With the rapid growth of renewable energy, its integration with the grid is throwing up challenges for system operators, planners and regulators. Of the total installed capacity of about 365 GW, 86 GW is currently contributed by renewable energy sources, which account for a significant share of 23 per cent. The renewables-rich states have already started facing difficulties in managing the grid as grid operations are becoming more complex day by day because of intermittency and variability of renewables. We cannot have a power system wherein renewable energy can be directly used, it either needs to be connected to the grid or integrated with battery storage. However, integrating battery storage with renewable energy systems increases the cost of the system and integrating with the grid leads to balancing issues.

It must be noted that balancing has a cost too. Although the tariffs of renewable energy projects, especially solar, have dropped to below Rs 3 per unit, this is not the real cost at which solar power is delivered to consumers. As per the Central Electricity Authority (CEA), the balancing cost of renewables works out to around Rs 1.10 per unit. The high growth in renewables has resulted in another challenge of stranded thermal power capacity. The stranded capacity also has a cost; it is estimated at Re 1 per unit at the all-India level. In Uttar Pradesh alone, discoms are paying Rs 60 billion annually as fixed capacity charges.

Further, there are state-specific challenges associated with load profile. For instance, Uttar Pradesh experiences peak demand in the morning and evening as domestic consumers account for 75 per cent of the state’s consumer base, while the rest is accounted for by agriculture and industry. Since the state has relatively less industrial consumers, the demand during the daytime is limited. However, solar power availability is abundant during the daytime. This leads to challenges in frequency and voltage regulation. The central and state regulators have tried to address these challenges through various regulations including the grid code, the deviation settlement mechanism, and forecasting and scheduling.

Amidst these challenges, the only way out is to manage the load curve by introducing solutions which ensure that power system assets are not loaded unevenly and more generation capacity is not added to meet the peak load. The Uttar Pradesh Electricity Regulatory Commission (UPERC) has already advised the state discoms to not go in for long-term PPAs to meet peak demand and instead work out alternative solutions.

Energy storage systems (ESSs) can play a crucial role in the current scenario. ESSs can be used to cater to peak demand, address the variability and intermittency in generation, as well as provide grid support for balancing. Batteries are the most talked about ESS in recent years although there are other forms of storage systems too including flywheels, compressed air storage, hydrogen fuel cells and pumped storage plants (PSPs). Globally, PSPs account for 90 per cent of the energy storage capacity. But PSPs have lost their attractiveness as a viable energy storage option owing to geographical limitations, environmental concerns, displacement issues, etc.

Battery storage is emerging as a promising option. Batteries can help in arbitrage and reducing renewable energy curtailment at the generation level while regulating frequency and voltage at the transmission level. At the distribution level, battery storage can aid in peak shaving and deviation settlement as it can be utilised in both peak and off-peak hours. During peak hours batteries can be discharged to meet the high energy demand while during off-peak hours batteries can be charged to mop up excess capacity by charging.

Batteries have significant potential but there are certain disadvantages too. These include issues in disposal, limited lifetime (4,000-5,000 charging/discharging cycles for lithium-ion battery) and a high conversion cost. Depending on the technology, over 10-15 per cent of energy is lost in conversion in batteries. The high cost of batteries is another challenge although it is gradually coming down. At present, the cost of battery storage is about $250 per kWh but as it nears $100 per kWh, it is likely to become commercially viable for the power sector.  Further, a new technology is emerging in the ESS segment – thermal electricity storage system. Thermal electricity storage systems are based on the conventional thermodynamic cycle. When electricity is surplus, it is converted into heat and stored in insulated tanks and when it is required, the heat is converted to electricity using heat engines. These conversions are carried out using conventional equipment such as heat exchangers, turbines and electric generators. Some of the advantages of thermal electricity storage systems are shorter installation time and higher energy density vis-à-vis PSPs.

Net, net, ESSs are crucial for balancing and renewable energy integration. Hence, ESS capacities need to be scaled up in the country in the long term.

Based on remarks by R.P. Singh, Chairman, UPERC, during the session on “Energy Storage Technologies for Grid Support and EVs” at the India Smart Utility Week, held in March 2020

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