The ‘next big thing’ in energy

Last fortnight, Solar Energy Corporation of India (SECI), the government-owned company tasked with development of the solar energy sector in the country, issued a tender for 100 MW that the successful bidders would set up in the solar park at Kadapah, Andhra Pradesh.

The tender was unique, because for the first time it brought in ‘storage’. It said that the developer should put up, in addition to the solar plant, a 2.5 MWhr capacity storage unit for every 50 MW of solar. SECI will soon announce similar tenders for 200 MW of solar for Karnataka. The company would therefore cause 15 MWhr of energy storage set up in the country.

This is unprecedented. There was one call for ‘expression of interest’ in March, for setting up a wind-solar hybrid plant with 1 MWhr of storage, but that was only a EoI and for a smaller capacity. The only comparable storage capacity in the country is the 10 MWhr battery array that the American company, AES, is setting up in Haryana for its collaborator, Panasonic.

Storing electricity is nothing new, as anyone who recharges his phone battery knows. People store electricity in inverters at homes and, in the recent years, many telecom towers have discarded their diesel back-up and installed battery packs instead. According to the Indian Energy Storage Alliance (IESA), in the last two years, Lithium-ion batteries worth about $500 million have been bought for use in Indian telecom towers. So what is new about the SECI tenders and AES venture? In one word: size. The MW-scale storage units indicate that India has stepped up into a rarefied field of hoarding up large chunks of electricity.

The advent of large-scale energy storage has been on the cards for some years now. In India, as anywhere in the world, it is inevitable. You can’t engender a solar revolution without storage — otherwise, you will still need grid power after the sun sets. You cannot have distributed energy supply, such as micro-grids, without storage. Energy storage is the heart of electric mobility.

Furthermore, storage is fundamental to balancing demand and supply in a large grid. When you have large capacities of wind and solar pumping fickle electricity into the grid, ‘storage’ is a big friend, for you can store excess energy in it and drain it when generation from wind and solar dips. As such, ‘storage’ has been the ‘next big thing’ in energy for the last half-decade or so.

However, storing vast quantities of energy has been a challenge. Until recently, if you wanted a large back-up energy source, you bought a Cummins or a Powerica diesel generator — the energy lay stored in the fuels. In very few places in the country another trick was employed — they pumped water into a high tank when the demand for power was not much, and ran it down to turn the turbines and produce electricity when the demand rose. But such ‘pumped storage’ facilities can’t be put up everywhere. Storing energy electrochemically in compact battery packs of sizes ranging from as small as television sets to as large as shipping containers has been the subject of intense research globally in the last few years. The efforts are coming to fruition and ‘storage’ is the ‘in-thing’ globally. By symbolising the ‘arrival’ of big-ticket storage in India, the SECI tender shines a light on the vast number of activities in this area that are gathering momentum now.

For instance, our government is working towards bringing a National Energy Storage Mission. On the anvil is the setting up of an Energy Storage Research Institute. The IESA is working with the US-headquartered certifying and validating agency, Underwriters Laboratories, to evolve standards for storage systems. The Alliance is also working towards setting up an ‘energy storage-focused incubator’. IIT Bombay is in the process of setting up a Centre of Excellence for Electrochemical Research—essentially for storage.

Foreign storage companies are keen on tenting up in India. Last year, the US-based Imergy Power System, which makes ‘flow batteries’, said it would provide battery back-up to SunEdison’s solar-powered mini-grids. Another US flow battery company, Vionx Energy wants an India presence. (Flow batteries are large systems that work on the principle of movement of electrons between two sets of electrolytes; they are re-chargeable, last about 20 years and can store enough energy for several hours of discharge.) Panasonic has said it wants to provide battery back-up, albeit of smaller size, to ATMs, so the machines function even if there is a power outage. The Chinese company, BYD, is interested too. For companies such as these, the SECI tender is a positive signal.

India seems to be on the cusp of a ‘storage revolution’. A recent study of the IESA estimated that Indian market for storage in 2015 was 4.4 GW, with home inverters accounting for 60 per cent of it. The study said that between now and 2022, India will set up 70 GW/200 GWhr of storage. Batteries for replacing diesel generator sets and for maintaining grid stability alone will be a 4-6 GW market, says Dr Rahul Walawalkar, Executive Director, IESA, and President of CES India Pvt Ltd.

The anticipated rapid fall in costs will help, he says. Today, Li-ion batteries cost around $ 350 a kWhr, but experts (such as those in General Motors) expect it to decline to $100 by 2022. Incidentally, the conventional lead-acid batteries already cost only that much, but they do not last long – about 1,000 cycles, compared with 3,000-5,000 cycles for Li-ion.

Another (simpler) way of looking at costs is the levelised cost of energy that is taken out of the batteries. Walawalkar says that Li-ion batteries give out kWhr at an average cost of ₹10-12 over their lives; this, he says, will decline to ₹5 in three years. Few can miss the parallel between ‘storage now’ and ‘solar five years back’. Solar power cost ₹17-18 a kWhr in 2010, it is less than ₹5 today, and is expected to go down further.

Against the backdrop of such developments, the AES system of 10 MWhr and SECI’s 15 MWhr mark a milestone. The year 2016 will go down in the energy history of India as the time when large-scale storage systems began to be deployed, which is truly epochal.

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