"We are seeing tremendous interest from various segments of customers on advanced energy storage technologies," observes Debi Prasad Dash, Executive Director, India Energy Storage Alliance (IESA). That said, there is a growing awareness as industry leaders notice the various announcements coming from across the world on new technology introductions as well as successful demonstration projects.
What is your outlook for the storage segment in the near term?
Currently, India has installed 14 MWh of large-scale storage for grid and renewable integration though pilot and demonstration projects at different locations. Apart from these commissioned projects, 48 MWh of energy storage projects in India are on the verge of tender allocation or at construction stages. Due to global competition and economies of scale, it is recommended that the minimum capacity of a Li-Ion cell manufacturing unit is 1 GWh production per year. As per estimates, for cell manufacturing, 1 GWh capacity would need an investment of up to $300 million.
Looking at the potential, India has to create a 10 GWh capacity by 2020; the country could attract investments to the tune of $3 billion within the next three or four years. And, as this happens, ancillary development, including module development, containers, transformers, and inverters might need an equal amount of investment, taking the total potential to $6 billion.
How important is it for India to develop a robust energy storage industry?
According to the IESA estimates, India has the potential to integrate over 300 GWh of energy storage between 2018-25. This includes existing applications, such as backup power, and newer applications like wind and solar integration, frequency regulation, peak management, transmission and distribution deferral, diesel replacement, and electric vehicles.The Government of India has released its roadmap to achieve 175 GW capacity in renewable energy by 2022, which includes 100 GW of solar power and 60 GW of wind power. With the rapid reduction of solar and wind energy costs, Indian grid now needs solutions for renewable integration. This transition is supported by the significant push for giga factories for advanced energy storage technologies such as Li-ion that is driving down the cost of energy storage at a pace even faster than the solar PV cost reductions witnessed in the past decade.
In your opinion which sectors will drive the expansion of the storage market?
Electric vehicles, behind the meter, and grid-scale energy storage, are key applications that would help the Indian government meet its wind and solar targets as well as energy access goals. We are already seeing the inflection point for deployment of energy storage in commercial EVs such as e-autos and distributed applications to displace diesel usage. The EV market would be driven by three wheelers and commercial transport vehicles during the next five years.
What is the general feedback that you receive during your various interactions with potential customers for storage solutions?
We are seeing tremendous interest from various segments of customers on advanced energy storage technologies. There is a growing awareness, as industry leaders are noticing the different announcements coming from across the world on new technology introductions as well as successful demonstration projects. Most of the customers are trying to understand which technologies are best fits the best, and if this is the right time to invest in storage projects. For some, there is a temptation to wait for price reductions, while some realise that by waiting longer, they are leaving money on the table due to higher O&M costs of current systems.
For RE-integrated solar,various rooftop solar facilities like toll booths in highways, petrol pumps, and commercial buildings have already started integrating lead acid and Li-ion batteries. Similarly, for EV adaptation, the consumer is happy with this transition. Various utilities and central PSU are willing to go ahead with pilot projects for energy storage EVs in India. Similar to other industries, there might be mixed feedback on the initial stages of adoption. But at IESA, we are confident that early adopters will drive this market and India will be one of the largest markets for energy storage and EV adoption in the coming decade.
Are things on track as far as provisioning of trained manpower and setting up of manufacturing facilities for storage solutions are concerned?
India has a talent pool, but lacks the R&D facilities for battery and cell manufacturing. On a good note, Indian national labs like CECRI, VSSC, CMET, and ARCI are actively working in this area. In comparison to the global standards, there is a great scope to enhance India's R&D space.
There is a need for the supply chain strategy. In the past three years, India has witnessed the creation of hundreds of accelerators/incubators focusing on information technology/healthcare areas. There is a need for a special incubator to nurture energy storage technology start-ups and provide them with suitable facilities for accelerating their progress from lab to commercialisation. IESA has been working on the creation of such incubators for the energy storage sector in line with Atal Innovation Mission (AIM). We are also working with the Skill India initiative and various academic partners to identify skill and training gaps in this area.
What are some of the main challenges facing the manufacturers of storage solutions?
Various Indian companies have already entered the cell-to-pack assembling arena. But there is a huge opportunity in India for Li-ion cell manufacturing. There is some discussion happening in the industry on the availability of raw materials. The government should also take an active step to encourage bilateral agreements with lithium- and cobalt-rich nations like Bolivia, Chile, and Australia or to quicken the R&D and exploration of raw material mines in India. Apart from Li-ion technology, India should look into other technologies like flow batteries, sodium-based batteries, zinc air, aluminium air, and other emerging technologies.
We need a concrete energy storage and EV manufacturing policy to attract investments. Hence, we urge the government to take swift action in launching the National Energy Storage Mission (NESM) to support the development of an R&D and manufacturing ecosystem for energy storage and EVs.
Does the country have the potential to become an important manufacturing hub for energy storage solutions?
Manufacturing of new technology batteries is at a nascent stage in India. There are no Li-ion cell manufactures in the country, but several companies like Exciom, ACME, Coslight, and Future hi-tech batteries have established Li-ion assembly plants here. At least five major industrial groups in India are waiting for clarity in policy to foray into cell manufacturing. States such as Telangana, Andhra Pradesh, Tamil Nadu, Maharashtra, and Gujarat are showing interest in attracting investments from companies to set up units in this space.
In March 2018, the Minister for Power and New and Renewable Energy, RK Singh chaired a meeting with battery-based energy storage manufacturers to set up manufacturing units in India. The meeting not only focused on the Government's push on EVs and its expected surge in the coming years, but also on future tenders that cover hybrid solar and wind projects to be coupled with energy storage.
Under the proposed NESM, the Government would soon release policy with focus on "Make in India" and is planning to take all possible measures to incentivise advanced energy storage manufacturing in India. NESM also addresses issues related to the availability of raw materials for manufacturing, and the government has started discussions with resource-rich countries such as Bolivia and Australia.
- RAHUL KAMAT