Given the increasing share of variable renewable energy in the country’s energy mix, the Indian power system needs to adopt advanced technologies and solutions in order to maintain grid stability. Utility-scale battery energy storage systems (BESS), which capture electricity from different sources, and accumulate and store it for later use, can help in the country’s energy transition.
Key drivers
Generation from renewable energy technologies such as solar and wind energy is dependent on solar/wind availability at any particular point of time. Thus, renewable energy installations have to be complemented using baseload power from firm sources of energy such as thermal power plants based on coal and natural gas. Baseload power is activated in case of a sudden decline in sunlight or wind. From an economic standpoint, it makes the mass adoption of renewable energy technologies less viable given the increased cost of operating both renewables and fossil-fuel based installations. A BESS addresses this conundrum by helping the renewable energy generator store electricity during peak generation and offtake it during non-peak hours. Furthermore, the transmission and distribution utilities will be able to manage and adjust their load to stabilise their frequency when supply from renewables-based gencos declines.
A BESS can also replace a diesel or natural gas generator used by power plants to restore power generation after blackouts by leveraging its black-start capabilities. Based on battery storage, power systems can restart after a total shutdown without using external electricity networks. The fast response time of a BESS helps generation systems recover in the shortest possible time.
As of November 2021, India’s installed renewable energy capacity, excluding large hydroelectric capacity, stands at 104.03 GW, which is equivalent to 26 per cent of the total installed capacity in India. In addition, the renewable energy capacity has registered a CAGR of 13-15 per cent from 2015-16 to 2020-21, with solar and wind driving a substantial portion of the growth in renewable capacity. Recently, at COP26, India announced a target of achieving 50 per cent energy from renewables as well as 500 GW of installed renewable energy capacity by 2030. This makes it important to develop BESS as it will help renewable energy generators to store their energy and retrieve it when renewables-based generation declines. The renewable energy transition essentially hinges on the affordability and wide-spread availability of BESS technologies.
Technology trends
A BESS is a compound system comprising hardware components along with low-level and high-level software. It contains individual battery cells that convert chemical energy into electrical energy. These cells are arranged in modules that form battery packs. An inverter or a power conversion system converts direct current produced by batteries into alternating current supplied to facilities. BESS have bidirectional inverters that allow both charging and discharging. They also have a battery management system and an energy management system (EMS) for energy management and monitoring. These two components allow the generating entity to regulate and modulate the BESS according to its requirements after accounting for the internal conditions.
There are batteries with different electro-chemistries such as lithium-ion batteries, lead acid batteries, nickel cadmium batteries, sodium sulphur batteries and flow-batteries. Battery-based technologies of different electro-chemistries have witnessed an exponential decline in the cost of production over the past decade.
For example, according to Ziegler and Trancik (2021), in the early 1990s, the cost of storage capacity based on conventional battery electro-chemistry, to power a house for a day would have cost about $75,000 on average. The cells alone would have weighed 113 kg (250 lbs), while in 2021, the same amount of power can be delivered at a cost of less than $2,000 from a 40 kg package.
As of 2021, 90 per cent of large-scale BESS in the US utilise lithium-ion batteries. Li-ion battery chemistries have sub-categories such as batteries made of lithium cobalt oxide, lithium manganese oxide, lithium iron phosphate and lithium nickel manganese cobalt oxide (NMC). Li-ion batteries are already used in electronic items such as smartphones and laptops as well as in electric vehicles.
Lead-acid battery is another technology used in BESS. It is also the oldest battery technology and one of the cheapest solutions, given its widespread use in automotive and industrial applications as well as power storage systems. However, these batteries are bulky, slow charging and have low energy intensity.
Nickel-cadmium batteries are inexpensive and have among the highest energy densities as far as batteries are concerned. They are, however, prone to rapid discharging, which makes them less suitable for deployment in BESS. Meanwhile, nickel-metal hybrids, which are another configuration of nickel-cadmium batteries, have greater capacity, better charging rate and even higher energy density than nickel-cadmium batteries.
Sodium-sulphur batteries are a cost-effective technology based on molten salt. The advantages of sodium-sulphur batteries involve high energy and power density, as well as a long lifetime. These batteries are capable of stable operations under extreme ambient conditions. All these characteristics make them suitable for deployment in BESS. There are some BESS projects that already use sodium-sulphur batteries in their operations. For example, BASF installed a 950 kW BESS in Antwerp, Belgium, at one of its own facilities. The technology is suitable for multi-megawatt BESS applications for durations of six to seven hours and is designed to last 4,500 cycles, or 15 years of operational lifetime with about 300 cycles per year.
Intense price competition and price-sensitive consumers have led manufacturers to develop new chemistries and improved processes, resulting in cheaper storage solutions with higher energy densities. It is predicted that by 2030, lithium-ion batteries would be priced at $74-$100 per kWh. Apart from these batteries, there are many other upcoming battery technologies at research stage such as liquid electrolyte batteries, solid state batteries and metal air batteries.
BESS in India
The Indian government realises the role of battery storage in the country’s energy transition as well as e-mobility programmes. In view of this, it launched the Production Linked Incentive (PLI) scheme under the National Programme on Advanced Chemistry Cell (ACC) Battery Storage in May 2021. The entire demand for ACCs is currently being met through imports in India and the programme aims to reduce the country’s import dependence by creating a manufacturing base for battery storage in the country. The PLI scheme targets an ACC manufacturing capacity of 50 GWh and 5 GWh of niche ACC batteries with an outlay of Rs 181 billion. The request for proposals for the scheme was released in October 2021. Reportedly, the Department of Heavy Industries has received an overwhelming response to the PLI ACC scheme with proposals received for nearly twice the target capacity of 50 GWh. Nearly 20 companies, including Tata Chemicals, Ola Electric and Reliance Industries, have expressed interest in the scheme.
In October 2021, the Solar Energy Corporation of India (SECI) invited expressions of interest from companies for the installation of 1,000 MWh of BESS. The government firmly believes that it is imperative to correspondingly develop BESS capacity in transcos and discoms to complement renewables that are expected to be added by 2030.
SECI also awarded a tender to set up two solar systems with an aggregate capacity of 14 MW and a battery storage capacity worth 42 MWh, in Leh and Kargil, to Tata Power Solar Systems, in August 2021. The total cost of the project awarded including taxes and duties would be around $51.97 million. Of this, the project’s engineering, procurement and construction cost would be around $49.52 million, while its operations and maintenance cost for 10 years is estimated at $2.44 million. Extending reliable transmission and distribution lines to such remote areas by conventional methods may prove to be expensive. Hence, developing off-grid renewable energy projects with BESS capacity will help consumers in this region to avail of electricity at affordable rates all year round. In August 2021, Convergence Energy Services Limited, a wholly owned subsidiary of Energy Efficiency Services Limited, also invited e-bids for setting up a 242 kW solar carport and rooftop solar system with a 762 kWh lithium-based BESS, including five years of operations and maintenance, at Leh.
Meanwhile, BESS deployments at the utility level have been few and far between. In 2019, Tata Power, the AES Corporation and Mitsubishi Corporation inaugurated South Asia’s largest grid-scale BESS in Rohini, Delhi. The battery chemistry used in the plant is lithium-ion-NMC (nickel, manganese and cobalt oxide), which has a faster ramp rate. It was set up to add system flexibility, stabilise the grid, improve peak load management, enhance reliability and protect critical facilities for 1.8 million consumers served by the company. The BESS can be operated remotely without manual intervention.
This installation was preceded by another BESS facility in Puducherry at a substation owned by Power Grid Corporation of India Limited. This BESS was installed with technical cooperation of USAID. On modelling the learnings from this project, installing 1,200 MW of BESS worth Rs 11 billion will accrue yearly savings worth Rs 30 billion. Therefore, the annual estimated savings would be three times the cost of installation.
Issues and challenges
The key issues and challenges in the implementation of BESS are:
Low mineral reserves: India does not have reserves of some of the most critical Li-ion components such as lithium, cobalt and nickel, and not even of copper that is used in conductors, cables and bus bars.
Cost of battery technologies: Consumers in the solar photovoltaic segment are highly cost sensitive. The backup system (batteries) could increase the upfront cost of a solar system by up to 50 per cent along with the additional maintenance and replacement cost associated with batteries.
Lack of cost-effective cell manufacturing knowledge: Cell manufacturing contributes 30-40 per cent to the cost of battery. Thus, international partnerships will be needed in this space.
Maintenance requirements and performance of battery systems: Batteries require regular maintenance and replacement every few years. Also, battery performance is unreliable and largely depends on usage. Poor battery performance is directly blamed on solar companies. To avoid such situations, companies prefer to install grid-integrated solar systems without battery backup.
Lack of coordination among stakeholders: Key stakeholders in the battery manufacturing ecosystem include material suppliers, battery manufacturers, vehicle manufacturers, research institutes and think-tanks. Coordination among these parties is a must to define technology pathways, align investment strategies and timing, and guide policies to help achieve India’s e-mobility target. The absence of this coordination is a key barrier to streamlining efforts by different industries and organisations in building India’s battery manufacturing supply chain.
High technology risk: This is primarily owing to rapid technological changes, demand uncertainty and high investments required in setting up battery manufacturing units.
Recycling for material recovery and second-use life: EV batteries have a shelf life of less than 10 years. After 8-10 years of operation they are not considered fully functional to power an EV. Also, India does not have any policy framework or mechanism for battery recycling and second-use market.
The way forward
The installation of BESS needs to be fast-tracked on a priority basis given the several complementarities offered by these technologies to renewable energy installations and the stability provided by them to the grid. Going forward, the government, battery manufacturers, financial institutions, gencos, transmission and distribution companies, and prosumers need to comprehensively collaborate and design a roadmap that expedites their deployment on a mass scale in the coming years.