The commercial viability and widespread adoption of energy storage solutions have the potential to address key issues in clean energy deployment, including grid safety and intermittency while leveraging the vast potential of various energy storage forms.

Issues surrounding energy storage were discussed during the session titled, “Energy Storage-Enabling Stable Renewables and Resilient Grids” on the second day of the two-day Mercom India Renewables Summit 2024, held in New Delhi.

The session featured Shilpa Urhekar, CEO Solar EPC (India) at Gensol Engineering, Cyriac Loyola, Head of Application Engineering at SMA Solar India, Akash Kaushik, Co-Founder at GoodEnough Energy, and Sivakumar V Vepakomma, Chief General Manager at NTPC Green Energy.

Wendy Prabhu, co-founder of Mercom Capital Group and the President of Mercom Communications, moderated the session.

Urhekar noted that Gensol has won two tenders from GUVNL, with an 18-month timeline for completion. She noted that Gensol is importing cells to set up the capacity, and its battery packs will be manufactured in India. The manufacturing facility is scheduled to be operational by March 2025.

“However, we face significant challenges: no single agency in India can certify battery energy storage systems, which means we need to send the entire package outside India for certification. India currently lacks cell manufacturing capacity, making it crucial for us to have a comprehensive understanding of cell chemistry and technology to ensure that imported cells meet project requirements,” she said.

She added that the country’s lack of experience in cell manufacturing necessitates a careful and dedicated approach when selecting cell suppliers.

Loyola noted that safety is a major concern as India enters the large-scale storage segment. Any fire accidents could potentially halt the entire industry. “We should adopt global safety technologies for storage systems from the early stages of project development,” he said.

He also noted that flexibility is another critical aspect. Battery energy storage systems typically operate for only one to two hours a day. We need systems designed from the beginning to be flexible for power dispatch.

“Cost is a major focus area. For battery projects where safety and flexibility are paramount, it’s crucial to have the right balance of system components, including intelligent inverters and other plant elements.”

Vepakomma detailed NTPC Green’s goal of achieving 60 GW of capacity by 2032 from renewable sources. “The role of energy storage in our model is projected to be between 10 to 25%, depending on the specific model we are building,” he said.

He noted that NTPC Green focuses on round-the-clock renewable energy solutions for the commercial and industrial segment and has issued technology-agnostic tenders, where pumped storage emerged as the most commonly discovered technology. “In the C&I segment, most tender responses come from the pumped storage sector. Storage requirements typically range from one to two hours, widening the gap between off-peak and peak demand. Each technology has its niche.” id.

Kaushik noted that GoodEnough is set to operationalize 7 GWh by October 2024 and 13 GWh by 2026 in Jammu and Kashmir. He added that local storage manufacturing offers the advantage of reduced logistic costs.

Kaushik also said that the Indian market is currently stable. According to the Ministry of Power regulations, a 25% mandatory battery energy storage systems requirement for renewable energy projects is set for October 2024. The requirement is 30 GWh by 2024 and 200 GWh by 2026.

“We should also consider the cost of balance of system components. Lithium has decreased from $36 to $23, altering the cost weightage of cells versus the balance of system from 70:30 a year ago to 60:40 now.”

Kaushik noted that India’s lithium mining capacity is 180,000 tons, while demand is projected to rise to 500,000 tons by 2025 and 600,000 tons by 2026. India is not yet mining lithium, but it will start soon. The global lithium reserves are 30 million tons, and prices are expected to rise.

He cautioned against the risk of India becoming a market for low-cost exports and stressed the importance of focusing on technology development. “The reverse auction approach may not be suitable for battery storage systems. GST for build, own, operate, and transfer models should be rationalized, and manufacturers should be incentivized for technology development or manufacturing localization. Energy storage tenders should include technology criteria.”

He said, “We have seen storage tariffs drop below ₹5 (~$0.060)/kWh, but we ensure we do not reach unviable tariffs, which could challenge project development.”

All the panelists concurred that it is difficult to generalize storage requirements. Battery prices are expected to stabilize in the next three to four years. Policies should focus on technology advancement and GST relief for developers, and they should ensure that reverse options are available only for established technologies. Government support through policy adjustments and incentives is crucial to foster growth and keep pace with global competitors.