Ramping up Renewables in India: What Lies in Store
Renewable energy is at an all-time high in India, contributing 13.4% of the total power generation in August 2018, and growing. Solar and wind, the two main renewable energy sources, while low-cost, and unlimited, are intermittent by nature. Energy storage solutions provide the ability to save energy for use when the sun is not shining, or the wind is not blowing.
Coupled with adequate storage capacity, renewables can help India reduce its dependence on fuel imports, increase 24x7 clean energy access, and improve stability of the power grid. Moreover, storage makes energy supply more efficient reducing the transmission and distribution losses and obviating the need for curtailment in times of low power demand.
India recognizes the strategic importance of investing in energy storage. The Ministry of New and Renewable Energy (MNRE) has referred to energy storage as “one of the most crucial and critical components of India's energy infrastructure strategy and also for supporting India's sustained thrust to renewables.” An expert committee led by MNRE has been tasked with setting up a National Energy Storage Mission for India. As a part of the effort, NITI Aayog has released a draft report, which focuses exclusively on battery storage with an emphasis on local manufacturing. Batteries, being portable, are excellent for transportation applications. However, in planning a comprehensive storage strategy, India should not rely on a single solution but rather assess various options based on suitability to operating conditions, supply-chain constraints, cost-effectiveness, durability, scalability, and response time.
Leading storage solutions
Globally, there are a diverse set of storage solutions that each offer their own set of benefits. Here’s a summary of leading storage solutions deployed around the world.
Battery storage: Battery technology has improved significantly in recent years driven, in part, by its increasing use in automobiles and electronics. At the same time, battery prices have declined by 79% from 2010, and are expected to fall another 67% by 2030 compared to 2018. Batteries come in several chemical configurations. Lithium-ion batteries have the largest market share although there are some concerns about recycling and mining practices employed in their supply chain. India is one of the largest importers of lithium-ion batteries but will soon begin manufacturing them domestically. Lead-acid batteries, which have been used in automobiles for decades now, and many homes in India have them as a back-up for power cuts, are also being used for utility scale storage as the technology improves. Newer technologies like flow batteries, are another promising option but yet untested at scale.
Pumped hydro: Using excess electricity to pump water into a reservoir to and letting the water flow to generate hydroelectricity in times of demand is the most commonly used utility scale storage solution. The long-term cost of storage is low with pumped hydro, although initial capital expenditure is higher than other solutions. While large-scale hydropower projects are fraught with environmental risks, sometimes subterranean sources such as abandoned mines can provide a good site - like in the 270 MW solar-pumped hydro project being developed around old gold mines in Australia. In India a 2.75 GW solar-wind-pumped hydro integrated project has been approved in Andhra Pradesh. Floating solar projects in which solar arrays are placed on hydro reservoirs, provides a good complement to hydropower. In this arrangement solar electricity is used to pump water, which can be stored in the reservoir and used for load balancing. Solar Energy Corporation of India has already proposed 10 GW of floating solar although some of the tenders have received lukewarm response so far.
Thermal storage: This includes a suite of technologies which use thermal properties of a heat transfer medium to store energy. Molten salt technology represent three quarters of thermal storage in operation worldwide. In times of low demand, excess energy is used to heat and melt a chemical compound which is then stored in insulated tanks to be used later to generate steam for producing electricity. This technology works well with concentrated solar power, also known as solar thermal, which can be co-located with solar PV to provide round the clock power generation. Thermal storage is cost-competitive, and as compared to batteries, operates at larger scales providing bulk storage for longer duration.
Electric vehicles: Electrification of transportation offers new opportunities on how batteries in the vehicles interact with the electric grid. Using incentives such as lower off-peak prices, electric vehicle owners can be encouraged to plug-in during periods of low-demand thereby shifting electricity load on the grid. Such programs, called V1G (one-way charging from grid to vehicle) have already been tried in places such as California in the US. Even more transformative are V2G programs (two-way interoperability between vehicles and grid) where large EV fleets work collectively as battery banks that can store electricity and supply it back to the grid when the demand is high. For an excellent explanation of how V1G and V2G technologies work, check out this blog by my colleagues Pamela MacDougall and Vignesh Gowrishankar. Since India already has ambitious goals of vehicle electrification, leveraging EV batteries could avoid additional capital investment and lead to significant cost reduction for storage.
The list of solutions summarized here is by no means exhaustive. In addition to these leading solutions, there are many other newer technologies being tested such as a gravity-based storage system announced by Tata Power just this month. Energy storage is an exciting market with a good deal of innovation happening in recent years. The key is to create the right conditions to nurture and grow the market to meet the needs of renewable energy integration.
The road ahead
To match its already ambitious renewable energy goals, India needs to scale up the ambition on energy storage. A comprehensive strategy deploying solutions most appropriate to India’s needs, with clear long-term goals and policy support is essentials.
Equally important is the availability of financing at the right terms to spur investment in emerging opportunities such as storage. International financiers are taking note. The World Bank has committed $1 billion for a new global program to accelerate investments in battery storage for energy systems in developing and middle-income countries. In India, catalytic finance solutions such as green windows could attract private capital and further accelerate deployment of energy storage and other emerging technologies that are traditionally perceived to be riskier by financiers.
As one of the biggest energy consumers in the world, with an increasing share of renewable energy, the world is watching India’s progress. By investing in clean energy and storage, India has the unique opportunity to usher in a new energy paradigm not just for millions of Indians, but for people across the world.