With the increased environmental awareness and climate change initiatives, there has been a transition towards source of energy, i.e., renewable energy. India also is seeing a consistent shift from petroleum derivatives towards renewable energy sources. With a focused goal of accomplishing 40% of installed capacity dependent on renewable sources by 2030, energy storage has all the earmarks of opening the sustainable power sources’ genuine capability and achieving this objective.
It has been noticed that scalability and adoption of renewable source of energy has widely gained popularity. However, the bigger challenge remains of grid integration. The intermittent idea of the sustainable power source and the restrictions on its ability to provide instant demand and supply variability, lead to the loss of a certain amount of capacity. To counter this disadvantage, energy banking has been embraced previously. Distributed energy companies have already been ailing financially and the storage of electricity, coupled with certain applications shall help in power optimization. This shall help to somewhat contain financial issues. Energy storage has the fortitude to address a few such limitations.
Energy storage regularly alludes to the storage of recently produced electric energy for utilization in the future. Energy storage systems differ in terms of form, size and type of energy storage. Depending upon the different characteristic of storage, capacity ranges from KW to MW, pumped storage hydropower ranging from 250-1000 MW, and flywheels ranging from 10-20, pressurized gas storage systems ranging from 0-180 MW. Aside from overcoming any issues among demand and supply of power (and subsequently expanding dependability), energy storage systems help minimize the deflection from the plan. Given below is a brief upon a specific type of energy storage system market, i.e., the Battery Energy storage systems (BESS) market.
Market Overview
The Indian BESS market is expected to achieve a CAGR of around 10% during the conjecture time of 2020-2025. Factors, such as satisfying power necessity in the nation during the pinnacle hours of the day where battery energy storage systems fill in as a reinforcement, will likely drive the Indian battery energy storage systems market. Nonetheless, the high cost of investments in massive scale ventures is kind of a hurdle in the market during the forecasted time frame.
Because of its high energy density, lithium-ion stores a lot of energy for every unit area in the batteries and is probably going to develop at the quickest rate in the Indian BESS market soon. India’s objective to introduce 450 gigawatts (GW) sustainable power sources by 2030 is relied upon to explore several opportunities for India’s BESS market ahead in the future. Increasing energy demand in the nation is expected to drive the Indian BESS market as forecasted.
Key Market Trends
- Lithium-ion batteries are chargeable batteries that are ordinarily utilized in electronic gadgets and energy vehicles. These batteries are additionally being utilized to store energy from renewable power sources, such as solar and wind, acting as a source of affordable and clean energy.
- The densities of such batteries are very high and have a round trip proficiency of 85% to 95%, which implies the proportion of energy yielded/delivered to energy input/stored. The lithium battery is a low support battery, and the cells of the battery cause little trauma to the climate when discarded. India’s regulatory authority also intends to replace lead-corrosive batteries with lithium-ion batteries as they are more affordable and lightweight than the previous ones.
- The significant portion of lithium-ion batteries in India is imported from countries like China, Japan, and South Korea. The nation’s ‘Make in India’ and ‘Aatmanirbhar Bharat’ plots attempt to draw domestic investment in the battery energy storage area.
Hence, inferable from the above comments, the lithium-ion sector will probably develop at the quickest rate in India’s BESS market during the forecasted period.
Shockingly, different disadvantages obstruct the improvement of the energy storage area. The nonattendance of an administrative structure for energy storage systems is one such impediment, as recognized by the Central Electricity Regulatory Commission (CERC) in 2018 in one of its staff research paper. A definitive regulatory framework is fundamental and requisite for drawing in the interests of investors in this sector.
Battery Energy storage systems (BESS) have a broad scope of stakeholders: Generating organizations, dissemination licensees, transmission utilities, merchant energy plants, bulk energy purchasers, or unrelated third parties. In this unique circumstance, another test they face is the reliance of regulatory treatment on energy storage responsibility, which incorporates market entry charge, cost recuperation structures/systems (pricing), grid integration, utilization of licensee’s assets, and income sharing. For example, storage facilities claimed by the transmission or distribution licensee might be utilized to keep up grid stability, stop blockages in the grid, and move traditional and conventional generations to fulfil the demand. In such a case, profits would not be an inspiring component. A striking differentiation will be if storage resources are utilized by generating companies, in which case profit is essential. Energy storage can possibly diminish mass/mechanical purchasers’ dependence on Distribution Companies as a back-up. In any case, such decreased reliance on Distribution Companies would build the tariff for retail and homegrown customers, which will altogether affect the activities of Distribution Companies.
The cost recovery components vary, contingent upon the proprietorship structure and the reason for which storage resources are utilized. If there is an occurrence of dedicated utilization of the energy storage systems by the generating company or the transmission licensee, the expense of such storage framework and energy storage administration can be considered in the tariff assurance of the generating company or transmission licensee.
For traditional power generating companies, the cost of energy storage might be considered as a feature of the yearly fixed charges of the generation station or through supplemental grants for the period during which such frameworks are mandatory to use. Rather than those mentioned above, if energy storage systems are for a non-committed purpose, the designer of such avenues could go into various agreements with the proposed clients to recover the cost.
Another zone of worry concerning energy storage systems is the assurance of the appropriate Commission. A feasible solution is to utilize the proprietorship structure as a reason for selection. For example, if mass storage facilities are treated as an interstate transmission resource, the CERC would be the Appropriate Commission. However, if they are for a particular generating organization, at that point, the State Commissions may have the locale.
One more test confronting India’s energy storage area is the requirement to arrange cost-competitive energy storage innovations. As expressed by CERC, a decrease in costs needs broad designing innovative work for new capacity ideas and the essential materials. Further, ill-defined situations, such as hazard alleviation & risk diversification, controlling vulnerabilities at the early deployment stage, and operational vulnerabilities, also need top-to-bottom examination for an informed grasp of energy storage measures.
Although India has developed battery storage adeptness, at present, it comes up short on a central focal structure to regulate the utilization of energy storage systems. Like Solar Electricity Corporation Limited (SECI), the Haryana Electricity Regulatory Commission has given to set up renewable energy source ventures (solar projects) with an arrangement for battery storage systems in the Haryana Electricity Regulatory Commission Regulations, 2019 (HERC Regulations). The HERC Regulations ordered that the eligible customer accommodates 25% battery storage for any steady limit over 1 MW and up to 2 MW. Likewise, a couple of different states have also welcomed offers to initiate a renewable project with an arrangement for battery storage. However, rules for potential financial investors who might need to take advantage of this region are yet to be outlined.