Stationary Energy Storage India (SESI)
The government of India has come up with an ambitious plan of 175 GW by 2022 which later increased to 450 GW of renewables by 2030, committing to generate 40% power from clean energy sources by 2032. In 2021 Union budget, the government decided to infuse additional capital of `10 billion (~$137 million) in Solar Energy Corporation of India (SECI) and `15 billion (~$205.6 million) in the Indian Renewable Energy Development Agency (IREDA). Last year SECI tender for RE+ storage has shown that hybrid RE projects can compete with thermal plants for providing reliable peak power. In addition, government is also working on 24*7 power for all and there is a growing realization of need for microgrids in achieving this goal in a cost effective and timely manner. High deployment of renewable energy and its use requires technical as well as commercial solutions and a variety of policy decisions around minimizing the impact of intermittency and enabling grid integration of renewable energy.
India Energy Storage Alliance (IESA) estimates the market for energy storage in India to be US $2.8 billion in 2018 and forecasts it to grow at a CAGR of 6.1% by 2026. The total annual MWh addition in 2018 hit 24.4 GWh and is expected to grow to 64.5 GWh by 2026. It also estimates the energy storage market in India to be US $2.1 billion in 2019 and forecasts a CAGR of 8% by 2027. In 2019, the market size shrunk to 21 GWh from 24GWh last year, primarily due to lower sales in the larger markets such as telecom and inverter batteries in 2018.
The top growing markets for ESS in India are renewable integration into the grid, diesel optimization, solar rooftop, and distribution utility scales storage. Renewable integration into the grid is slated to grow at CAGR of 32% by 2027 due to the focus on solarwind hybrid tenders by Solar Energy Corporation of India (SECI) and other government agencies. Diesel optimization is a key sector on account of for diesel genset usage for more than 3-4 hours a day and is slated to grow at CAGR of 59% in short term till 2023, with a slower growth in long term at 30% till 2030 accounting for a more reliable national grid which may leave less scope for growth of backup market. For the rooftop solar market, a dip in GST from 28% to 5% has been a driver for the market, with analyses additionally showing that for solar resource-rich states like Maharashtra, Tamil Nadu, Karnataka, West Bengal, Assam, cost of rooftop solar with 50% storage system could meet grid parity by end of 2023.
Another top market for energy storage is Distribution Utility market, with top private DISCOMs such as BSES and TPDDL in Delhi already in different stages of Battery Energy Storage System (BESS) installations. The strain on DISCOM’s due to a higher penetration of solar rooftop, EV charging stations, and ever-increasing C&I loads can be supported by energy storage technologies. This fact is likely to become more apparent in the long term with the market size potentially increasing to about 6 GWh in 2027.
The COVID 19 impact although will be visible on the rooftop solar, inverters, and diesel optimization markets, the markets are likely to recover after 2021, with all estimates for 2027 made in the report still holding good. Other markets such as telecom markets and UPS will have a medium impact due to COVID 19, owing to an increased use of electronic communication devices such as smart phones, laptops, and change in lifestyle owing to remote work.
The most popular battery technologies used for energy storage are flooded lead-acid batteries, valve regulated lead acid batteries (VRLA), lithium-ion batteries and other technologies such as flow batteries, thermal storage etc. We expect that the contribution of lead-acid batteries will reduce over the forecasted period with flooded lead-acid battery share going from 52% to 19%, and for valve-regulated lead-acid batteries reducing from 44% to 31%. At the same time, the penetration of lithium-ion batteries is projected to increase rapidly from 4% in 2019 to 45% in 2027 primarily due to the decreasing prices of lithium-ion battery systems. The share of other battery technologies, although still small, could also increase from less than 1% in 2019 to 5% in 2027.
Several policies supporting the growth of energy storage in grid-scale application are in the draft or proposal stage, and likely to get approved in the short term and expected to drive the market. Currently, Central government is working on Draft provisions in the Unified Guidelines on Standalone Energy Storage Systems procurement in India. Presently, forecasting, scheduling and DSM are the only drivers for wind integration application. Central Electricity Regulatory Commission (CERC) plans to introduce market mechanism for ancillary services market.
IESA’s suggestion to CERC was to introduce ESS for secondary and fast tertiary regulation ancillary services as it provides faster response and more regulation per MW. In 2019, the first large grid-scale ESS project was commissioned at Tata Power Delhi Distribution Ltd (TPDDL), Rohini Substation in New Delhi for 10 MW – 10 MWh for application such as peak load management, frequency regulation and Energy shifting. Distribution deferral becomes a key application for ESS in metros where grid expansion becomes difficult. Presently, India has already installed 20+ MWh of large-scale storage for grid and renewable integration though pilot and demonstration projects at different locations. Apart from these commissioned projects, 200+ MWh of energy storage projects in India are on the verge of tender allocation or at construction stage.
IESA is hopeful, that this time the government will prioritize energy storage projects and see them through to implementation. We are also seeing strong leadership from private commercial and industrial consumer to develop storage projects for behind the meter applications for different commercial and industrial hubs to create private projects. With the same intent, we are delighted to announce the Stationary Energy Storage in India (SESI) Conference on 11 March 2021 focused on the roadmap and outlook for stationary energy storage in India. This is a unique platform to interact, network and learn about market landscape, government policies, new projects & tender updates, Insights from national and international storage projects, current and future technology outlook for stationary storage.
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