Interview: Cancelling Energy Storage Tenders Sends a Wrong Signal to the World

India’s energy storage industry is not yet at the same level as more advanced global players, but the pricing, efficiency, scale, and technology of the country’s domestic manufacturers is undergoing a paradigm shift that is improving their competitiveness. Likewise, these manufacturers are also benefitting from well-intentioned, supportive programs announced by government agencies, even if some of these programs have hit implementation snags.

Hiren Shah, the senior director of energy storage provider Delta Energy, expects 2020 will be a game changing year that will bring exponential growth for India’s Storage sector. In a conversation with Mercom’s news team, Shah shed some light on the ongoing evolution of India’s energy storage market and its probable trajectory in the coming years. Below are excerpts from that interview:

When do you think this sector will emerge from its nascent stage?

These days a lot of energy storage players are coming up with pilot projects and demonstrating their keenness and readiness to work with policy makers and the government. We are also showing a similar interest, letting them know that we are ready with the required energy storage solutions. A lot of us are demonstrating that we have the products and technologies that the country needs. Now, the turning point in the evolution of India’s energy storage industry will only come when these products and technologies become available to consumers on a larger scale at an attractive price point. This would cause the market to start accelerating. Now, there is a push from the policy and initiatives, and  we are waiting for a pull from the market once it reaches the acceptable price point. When we arrive at that level, I think the sector will evolve from its nascent stage in India. I see it happening soon, perhaps it may be within six months or a year. It will definitely happen before the year 2020.



What do you think should be the market strategy for companies looking to grow in India?

Right now, the country is in the investment phase as far as the energy storage sector is concerned, especially for those who are promoting new technologies like lithium ion batteries. The market is of course huge, with plenty of opportunities. Those with deep pockets who can make big investments will have the ability to sustain themselves in this industry for a long time. There will of course be plenty of players in the market, but whoever has the right technology, quality products, and financial power to scale up capacities will eventually emerge as the winner.

SECI recently cancelled a few Battery Energy Storage System tenders. What are your thoughts on that?

Obviously, it gave the wrong impression to the industry, not just in the domestic market but from a larger, global perspective too. When we float tenders that global players get involved in and then cancel them, it does not send the correct signal to the world at large. Firstly, it gives the impression that India as country is not yet ready for a surge in the energy storage market. Secondly, it implies that the government is not very clear about its policies. Thirdly, it also alludes to the fact that companies in the country are not yet ready to adapt to newer technologies being developed. The government should allocate some of its budget to a few of these projects. Even if they burn their fingers, the government should execute its plans and move them forward to their conclusion.

What should the government do to provide an impetus to the energy storage sector?

I feel that the government is making appropriate policies and has the right intentions. But the problem is that while the government is showing good intent, it is not really doing anything to execute its plans. When a government shows good intent, it raises market expectations and various players come in to participate. However, when there is no execution on the part of the government, these players are left empty-handed and disappointed. This in turn leaves a bad mark for India on the global stage. So, the government needs to work on the execution of its plans and ensure that they come to fruition. Whether it’s a good initiative or a bad one, the government should pursue all of its initiatives until a conclusion is achieved. The best way is to allocate some budget, say ₹500 crore (~$5 billion) at least for the next two years to see how it helps in adopting new technologies and also to see if it really helps clear the pain points of the system.

What are your thoughts on the recent proposal to impose a 70 percent safeguard duty on imported solar cells and the ongoing anti-dumping investigation?

The intentions behind the Make in India program are good and it is important to safeguard our own interests. But I don’t think we are prepared for it. As of now, it is hard to compare India’s domestic manufacturers with global players in terms of technological innovations, prices, the scale of production, and other things. Therefore, I think the government should be the equalizing force for some time. An anti-dumping duty should be imposed until we arrive on a level playing field with global players and our own industry gears up. Right now, the imposition of an anti-dumping duty would act like a hand brake for the industry. The government needs to perform a balancing act to scale up the domestic manufacturing and promote the improvement of the quality and efficiency of domestic manufacturers.

What is Delta Electronics’ market strategy for India?

We are creating an entire ecosystem to conserve, convert, and control energy. We are building products and solutions to effectively and efficiently manage energy right from the generation to the consumption. One unique feature that differentiates us from the rest is the fact that we manufacture, design, and develop our products locally in India and we are constantly trying to promote the Make in India initiative. We want to convey to customers, industry, and the government that we are ready to contribute and make a significant difference for the country. Once that is done, we will be ready to make our presence felt on the international front and expand overseas by bringing the made in India products to the global frontiers.

What companies are your closest competitors in the industry?

There are a few global players like ABB and Siemens which we consider to be our competitors. These two companies have been in India since a very long time and have a strong foothold. We are more of a challenger brand and these are like stalwarts and champions. We would like to be a champion someday soon.

Where do you see the energy storage market in the next five years?

Growth in energy storage is inevitable. Energy storage is something that will be required from various corners like for the stability of grid, renewable integration, and electric vehicles. It is just a matter of time and right now I am looking at 2020 as the turning point year when things will gain momentum and we will have adapted to the latest technologies. Even today, the lead battery energy storage business is huge in India. The equation will change only when the gap between the predominant lead batteries and newer technologies decreases.