Integrating renewables with battery storage in India

The following discussion examines our growing stationary energy storage market, valued at $2.8B in 2018 with a projected 6.1 percent CAGR till 2026. Applications include renewable integration and challenges like technology and policy support are discussed. The role of government programs and the transformative impact of renewable-energy-battery integration are highlighted.

The fifth edition of IESA’s India Stationary Energy Storage Market Report estimates the market for energy storage in India to be US $2.8 billion in 2018. It predicts it to expand at a CAGR of 6.1 percent by 2026. The total annual MWh contribution in 2018 was 24.4 GWh and is predicted to increase to 64.5 GWh by 2026. The report delves deeply into various applications of advanced storage technologies, such as renewable energy integration, transmission and distribution (T&D) deferral, ancillary services, railways, microgrids, telecom, and behind-the-meter applications such as inverters, UPS, solar rooftops, and so on. The study’s base year is 2018, and the projected term is 2019-2026.

Current market size and trends for stationary battery power systems in India

The application of battery storage systems in industrial settings is undergoing robust expansion. This growth is particularly evident in sectors such as telecom and the power industry, indicating a promising trajectory for the future. According to forecasts from a government think tank, the demand for batteries in stationary energy storage systems (ESS) is projected to reach around 180 GWh by 2030.

To facilitate the integration of solar and wind energy into the grid, the government’s Energy Storage Obligation (ESO) outlines a gradual increase in the proportion of energy sourced from these renewable sources, aiming for a 4 percent contribution by 2029–2030.

The burgeoning Indian market for stationary battery storage systems encompasses several critical industrial segments, including telecom, UPS, motive, power, and solar. Data centres have recently gained significant prominence due to the rapid growth in digitalisation requirements. According to Venkata Krishna M. M., Chief Marketing Officer of ISBU at Amara Raja Batteries, though quantifying the scope of the battery storage systems market lacks well-established resources, their internal assessments and extensive experience suggest a market size ranging from $0.8 billion to $1 billion.

Bhushan Khade, manager of the India Energy Storage Alliance (IESA), emphasises that India has made ambitious international commitments. These commitments include achieving 500 GW of non-fossil fuel-based energy capacity by 2030 and raising the renewable share of installed capacity generation to 50 percent. Despite wind and solar energy being cost-effective renewable sources, their variability and intermittency pose challenges to maintaining grid stability when integrating substantial amounts of these sources. To address this, an energy storage system is necessary to mitigate the fluctuations of these sources and ensure grid stability.

Adding capacities to batteries to match the RE storage 

Integrating renewable energy into energy storage systems is rapidly becoming a significant and evolving field. When evaluating storage capacities, it’s crucial to consider both lead-acid batteries and lithium-ion battery systems. Venkata Krishna highlights that while lead-acid battery manufacturers are equipped to meet future demands, transitioning to Li-ion technology necessitates capacity expansion to meet upcoming needs, especially in segments like data centres.

The National Electricity Plan outlines a requirement of 8.68 GW/34.72 GWh BESS-based storage capacity by 2026–27 and 47.24 GW/236.22 GWh by 2031-32. MNRE plans to invite bids for 50 GW of renewable energy capacity annually for the next five years, aiding power procurers to manage their renewable procurement strategy. Ongoing projects by central and state government agencies are driving energy storage integration with renewables, with 2 to 6 hours system durations in current tenders. As renewable penetration deepens, the demand for projects lasting over four hours is expected to rise post-2026.

Regarding power electronics, Pranjal Pande of Statcon Energiaa emphasises the need for increased risk appetite among Indian manufacturers for basic R&D. He suggests that collaborations with academic institutions can enhance local power electronics capabilities, reducing foreign dependence and benefit from schemes like the PLI scheme for advanced chemicals.

Challenges and opportunities for battery manufacturers, suppliers and users 

Venkata Krishna M. M., Chief Marketing Officer at Amara Raja Batteries Ltd., highlighted a crucial challenge faced by manufacturers and suppliers in the industry—dealing with the widespread unorganised activities surrounding used lead acid battery collection. Although battery waste management rules are a positive step, retrieving old batteries from suppliers has become a significant obstacle for manufacturers. Conversely, suppliers face difficulties due to the lack of a suitable legislative framework for collecting used batteries.

Pranjal Pande, Director of Statcon Energiaa, identified two key challenges for manufacturers: technology and workforce. Battery R&D involves high expenses and risks due to changing technologies and long research periods, favouring larger companies. Additionally, the turnover of skilled R&D personnel affects stability. Pande suggested industry-academic tie-ups, funding postgraduate projects, and offering positions to reduce these risks.

He also acknowledged suppliers, referring to them as peace-loving due to their vulnerability to conflicts. Disruptions from events like COVID and conflicts like Ukraine-Russia impact supply chains. On a positive note, Indian manufacturers are addressing these gaps with emerging plans. 

Government initiatives and policies help manufacturers and the industry innovate

In the energy innovation landscape, industry leaders’ voices resonate with the call for strategic collaboration and policy reinforcement. Pranjal stresses the potential of government R&D schemes, urging Indian manufacturers to delve into the manifold opportunities offered by initiatives such as PACE, TIH, and TDF. With the privatisation of R&D funds, these schemes are gateways to fostering dynamic partnerships between educational institutes and industries. Pande also presses for reinstating the R&D expense tax write-off scheme, which once held a place under DSIR approval. Its revival could be pivotal in rejuvenating research endeavours by providing financial support. 

Shifting the lens, Bhushan underscores the fundamental role of robust policy support in successfully integrating storage technology. Formulating regulations, establishing standards, and seamlessly integrating storage with renewable energy projects require a strong policy framework. Khade highlights the introduction of Viability Gap Funding (VGF) for 4000 MWh Battery Energy Storage Systems (BESS) projects, a draft stage initiative aimed at enhancing the viability of these projects. Additionally, he underscores the significance of lowering the Goods and Services Tax (GST) rate on batteries and their components. This measure is critical to curbing the overall cost of BESS, rendering it competitive against other energy storage technologies.

While navigating the diverse spectrum of challenges encompassing technology, raw materials, manufacturing, skilled workforce, land acquisition, and more, the Make in India initiative, coupled with a suite of governmental programmes, is poised to unravel these complexities. These programmes systematically resolve issues ranging from standardisation to the cost of technology, positioning the industry for growth and transformation.

The far-reaching impact of the Production-Linked Incentive (PLI) scheme resonates powerfully in the industry, as underscored by Venkata Krishna M. M., Chief Marketing Officer at Amara Raja Batteries. This strategic intervention has reframed perspectives on battery storage systems and enabled manufacturers to craft cost-effective solutions. These solutions, in turn, empower broader accessibility and adoption. With a steadfast commitment to cleaner and more sustainable energy sources, the government’s vision is a pivotal driver propelling the ascent of energy storage systems, especially battery storage systems. This momentum, characterised by the favourable environment, fuels manufacturers like Amara Raja, providing the impetus to escalate battery storage system production and thereby contributing to the realisation of a greener energy landscape.

Revolutionising India’s energy landscape  

In the discourse on the impacts of integrating renewable energy, Pranjal highlights an underlying bias. Integrating renewables with proper battery storage systems holds enormous potential, driving the evolution towards 100 percent smart grids. These grids incorporate smart inverters with Battery Energy Storage Systems (BESS), ensuring instant distributed power with minimal transmission loss. Pragmatically, this curtails transmission loss, boosting DISCOMs’ profitability. With environmental regulations in place, the government should expedite projects, primarily facing land acquisition and clearance hurdles, as the engineering aspects are well-mastered.

The intensified fusion of renewable energy and stationary battery storage systems promises heightened grid stability, reliability, and peak demand management. Noteworthy economic benefits encompass reduced energy costs, deferred transmission and distribution expenses, and revenue streams via diverse business models. Simultaneously, environmental gains manifest in lowered greenhouse gas emissions and improved air quality, as elucidated by Bhushan Khade, Manager of the India Energy Storage Alliance (IESA).

In this context, Venkata Krishna M. M., Chief Marketing Officer at Amara Raja Batteries Ltd.’s ISBU, underscores the synergy of renewable energy and battery storage surpasses mere mitigation of generation fluctuations. It acts as a catalyst, amplifying the utilisation of self-generated renewable energy by consumers, consequently diminishing the need to feed excess electricity into the grid. This transformation not only reshapes energy storage design but also heralds an era of operational versatility.

India’s stationary battery storage systems market is witnessing significant growth and transformation driven by the increasing demand for renewable energy integration, grid stability, and energy independence. The industry is navigating challenges related to technology innovation, supply chain disruptions, and regulatory frameworks. Government initiatives and policies, including the Production-Linked Incentive (PLI) scheme and other incentives, are pivotal in fostering innovation, manufacturing, and deployment of energy storage systems. Integrating renewable energy sources, such as solar and wind, with battery storage systems is reshaping the energy landscape, offering economic benefits, improved grid stability, and reduced environmental impact. 

Spokesperson & Quotes – 

“Academic partnerships boost local power electronics capabilities, reducing foreign reliance.” – Pranjal Pande, Director, Statcon Energiaa

“Lowering GST on batteries is key for cost-effective storage solutions.” – Bhushan Khade, Manager, India Energy Storage Alliance (IESA)

“Government initiatives empower us to offer accessible energy storage solutions.” – Venkata Krishna M. M., CMO, Amara Raja Batteries