How to ramp up battery storage - A critical gap for tapping solar potential of India
Though India is making serious efforts to tap all available sources to meet the same, solar PV is going to be the main workhorse.
The demand for electricity in India is growing rapidly. Though India is making serious efforts to tap all available sources to meet the same, solar PV is going to be the main workhorse. Even in the best case scenario, there are significant uncertainties and challenges in expanding the capacities based on coal, hydropower or gas in near to medium term. Expansion of nuclear based capacities alone may not suffice to meet the varying and uncertain demand pattern. Available estimates indicate that 60 per cent of the installed capacity in 2047 will be from solar. Solar PV is one of the cheapest sources but its utilisation needs adequate grid level storage capacity. The potential of pumped storage projects is somewhat limited and is taking time to materialise. Hence the critical need to expand grid level battery storage.Achieving the goal of cost effective, reliable and sustainable electricity supply requires optimal system expansion planning to meet the power system requirements in terms of capacity, energy and ancillary services. The National Electricity Plan notified by CEA targets battery storage of 47.24 GW with 236.22 GWH capacity by 2032. In December 2024, we had only 0.11 GW battery energy storage system (BESS) capacity. In the present scenario of rapidly falling capital costs of BESS and the struggle to meet increasing demand for electricity, BESS capacities are being ramped up at a very fast rate globally. Within 2018 to 2023, it increased from 3 GW to 56 GW. In 2025, Texas in the USA is going to add 12 GW of BESS to its present capacity of 9.4 GW. In this context, a high level Roundtable was convened by TLG in Delhi recently to discuss the key issues that need to be addressed for unlocking BESS for India’s renewable energy integration. Results from a modelling exercise for the Madhya Pradesh power system were presented. Key message was that significant saving of about ₹36000 crores in ten years up to 2035 in overall system expansion and operations cost ( approx 6.3 per cent of total costs ) was feasible in just one state if BESS of adequate size was added at the scientifically selected sub stations over the period. In that scenario, coal based capacity needs also reduced from 23.37 GW to 16.50 GW.System level modelling right up to distribution network level will be important to size and site BESS at most beneficial location for driving the maximum advantage in terms of various functions like arbitrage, ancillary services, deferral of network augmentation costs, optimising the variable operating costs of conventional generators , and provision of balancing energy during ramp up blocks when solar is moving out at the end of the day. This calls for capacity building in the discoms. BESS can also resolve the right of way challenges in dense urban pockets where network expansion is extremely difficult.Foremost of all the challenges in adding new BESS capacities would be to ensure financial viability of investments. Data presented by IEX in the Roundtable informed that based on the trend of spot prices on power exchange , adequate arbitrage opportunities existed for two hour duration BESS only. Four hour BESS was not viable only on the basis of arbitrage revenues. On the other hand, CEA projections indicate the need for an average duration of BESS of about five hours in a day. As revealed by the study for Madhya Pradesh, BESS is required largely for system level cost optimisation. This discussion led to a consensus on the need for BESS projects to be supported by utility level contracts guaranteeing the capacity payments to developers based on the BESS being made available as per the contractual obligations. It is good that a number of states have floated such tenders.It was also highlighted by the experts that battery configuration for various services would need to be different keeping in view the present state of BESS technology. For example, ancillary services need very frequent discharging spells interspersed by short intervals. Addressing this challenge will need working closely with technology providers so that BESS modules can be appropriately configured and optimised for various anticipated services with smarter power conditioning systems and energy management systems. Residual limitations will have to be built in as constraints in BESS candidates in the modelling exercise .Another concern emerged about the urgent need for re-design of procurement contracts in respect of use of maximum permissible cycles of BESS over its economic life. Presently, the number of permissible cycles is prescribed on average daily while the battery duty over an year differs significantly across the seasons. This needs close consultation between technology providers and the system modellers. Technology improvements in battery chemistry will further address this aspect going forward.A number of developers raised the issue of uncertainties before them arising out of long delays in signing of PSAs after conclusion of the tendering process , and from a large number of tender cancellations. It was suggested that tendering agencies should work closely with states in aligning the tenders with their requirements. Regulators also need to support by adopting the discovered tariffs quickly.
Last but not the least, the challenge lies in quickly expanding the local manufacturing of battery cells so that our import dependence in the strategic area of energy infrastructure reduces as we ramp up battery storage capacities.
(Alok Kumar is a former Union Power Secretary of India and is currently partner with The Lantau Group. Views are personal. )
