Solar energy storage systems are vital in enhancing grid stability

Energy Storage Systems (ESS) will be the next major technology in the power sector over the coming decade. The latest standalone ESS tenders from  Solar Energy  corporation of India and NTPC will augment capacity manifold and help develop the local ecosystem.

Given that ESS technology is in its infancy in India, the current tenders face several technical, procurement, and regulatory challenges. However, the two tenders will act as pilot projects for policymakers and fast-track the evolution of future tenders. “A comprehensive National ESS Policy, with a time-based target, will significantly address  major  impediments faced by the domestic industry and be an important growth driver,” says Vibhuti Garg, Energy Economist, IEEFA Lead India. In future ESS project tenders, we can expect to see the incorporation of new business models and domestic content requirements.”

The world is moving toward the second phase of renewable energy, and evolution towards ecological Energy storage system (ESS) gains thrust. Traditionally, ESS has helped in grid stability by operating as ancillary support to the grid. In contrast, apart from grid-scale applications, there has been a rise in the need for a variety of other  services such as DG Replacement, voltage and frequency support, short-duration  BESS for critical applications, and peak demand reduction/shaving.

Noting this change, Manish Kumar, CMO- Distributed Energy Business, Jakson Group says, “Jakson Limited has always been a trendsetter in the market in many industries first introduced the “EnerPack” Battery Energy Storage System commences from 5kWa range, can be customised and further scale up to meet applications in C&I, Residential, Defence, Healthcare and is also expandable in MW scale.” EnerPack, a hybrid one-stop  electricity backup solution, can be charged from the grid or solar rooftop photovoltaic systems.

ESS market drivers
Demand for batteries in India is expected to expand between 106 GW to 260 GW by 2030 across the electrical and  electronic value chain, including energy storage. The targeted 500 GW of renewable energy capacity will also come  online by the forecast period. As per IESA Energy Storage Target Projection, RE integration holds 61 per cent of target priority, followed by C&Iand DISCOM, holding 16 per cent and 11 per cent of target priority.

Garg uses this opportunity to discuss the most recent ESS tenders. She goes on to say that ESS technology is still in its infancy in India and that; as a result, the recently announced standalone ESS tenders will most likely face technical, procurement, and regulatory challenges. “For instance, the NTPC tender calls for a 6-hour  ESS solution.” While BESS is ineffective beyond a 4-hour solution, PHS has a significantly longer lead time than the project commissioning timeline. “An additional risk is a  recent increase in battery prices after they had been steadily declining for the past decade,” she explains.

Considering the scale of these projects and that ESS is still in the initial stages of technology development, availing of long-term supply and maintenance contracts from vendors/contractors will be an added challenge. There is also regulatory ambiguity since the Indian Electricity Act 2003 does not consider energy storage as a standalone asset. Thus, taxation of such assets might create a few regulatory hurdles, primarily until formulating a national ESS policy. Policymakers view these projects as potential pilot tests that will advance all stakeholders along the learning curve and streamline regulatory processes for future tenders and projects.

ESS for the commercial and industrial segment
Along with solar installation, the replacement of DG with ESS in the residential and C&I segments is gaining traction. With diesel prices at an all-time high, the use case of ESS is viable to avoid high OPEX and TCO. Kumar emphasises that “customers of C&I in India are concerned about high peak tariffs, which drive up their energy bills.” A viable solution would be a combination of solar and energy storage systems (ESS), which would allow for the storage of solar energy and supply during peak hours by disconnecting from the grid.

Grid stabilisation
The primary concern is  grid stability, resulting in frequency and voltage fluctuations, overloading of existing transmission lines, and mismatched demand and supply. considering this, Kumar suggests enhancing grid stabilisation by allowing ESS to manage utilisation for purposes such as smoothing peak demand, deferring transmission and distribution services, ancillary service uses, and so on.

Challenges and opportunities
We are also focusing on adding ESS in GW capacity to  meet he demand for  our product offerings. The company has already offered 10MW and 40MWh ESS in the Indian market.

We are currently facing a market bottleneck due to the high cost of ESS, and our reliance on imported battery parts is significant. The PLI Scheme was announced to help offset costs and provide incentives.

“C&I and residential customers are already expressing interest in ESS to cut  OPEX expenditures and eliminate their reliance on fossil fuels like diesel for their DGs. Adversely, customers look for financial  support or a subsidiary scheme to own ESS, which influences their purchasing decisions”, says Kumar.

EVs became relatively economical, thanks to the FAME-II subsidiary program. We may see a rise in ESS deployment in C&I and Residential segments if a similar subsidiary scheme is introduced incorporating building by-laws with solar rooftop installation.

Scope of hybrid + solar energy
By 2030, India will have deployed 1000 GW of ESS, according to NITI Aayog. India’s first solar-powered ESS system was inaugurated in Gujarat town in Modhera with a 6MW solar plant and a 15MWh ESS. A project with a 50 MW solar plant and a 60.56 MW ESS is currently being constructed in the Leh district. Due to its operational cost  viability, maximum ESS backup projects will be integrated with solar.

The power industry is undergoing a remarkable shift worldwide by moving away from its dependence on fossil fuels and toward  renewable energy sources. However,  challenges posed by the intermittent and infirm nature of variable renewable energy (VRE) have introduced a new paradigm to energy storage system (ESS) applications.

“Solar and energy storage systems will allow efficient energy supply from the grid even during peak hours.” Manish Kumar,CMO – Distributed Energy Business,  Jakson Group

“The recent increase in battery prices after a decade of steadily declining prices represents an additional risk“. Vibhuti Garg, Energy Economist, IEEFA Lead India