Energy Storage Key to India’s RE Future, Assert Experts at REconnect Summit, Nagpur
Panellists discussed the current overview of the energy storage infrastructure, making battery energy storage systems (BESS) lucrative for the C&I segment, emerging technologies and repurposing used batteries, at the 2nd edition of the REconnect Summit in Nagpur.
December 10, 2024. By Mrinmoy Dey
The third panel discussion at the recently concluded second edition of the REconnect Summit, organised by Energetica India magazine in Nagpur, dwelled on the issue of ‘Energy Storage Infrastructure for India's RE Future’.
Setting the tone of the discussion, Alexander Hogeveen Rutter, Electricity Sector Lead and Research Manager, Third Derivative, who was the moderator of the session, stated that India has come a long way in terms of power infrastructure in the past 20 years. “For instance, back then, stabilizers at home were a common necessity due to grid instability. Today, national grid frequency has significantly improved. However, challenges persist, particularly at the distribution level in rural areas, where reliability remains an issue,” he said.
He further emphasised that for industrial plants, a stable and dependable power supply is critical, and battery energy storage can play a transformative role in bridging this gap.
But can they store the excess solar energy and trade it in the peak demand hours to benefit from higher tariffs? “We have some customers who have tried to achieve that. We have seen that ROI is workable in the peak hours but doesn’t make sense in the non-peak hours,” commented Brinder Gandhi, CEO, Impulse Green Energy Pvt. Ltd.
Customers with excess generation are feeding it to the grid at zero cost. While storing and selling to a third party might not make economic sense, there are regulations in banking that don’t allow to fully capitalise on this through battery storage. In some states, the banking limit is set at as low as 30 percent.
Ramesh T.N., Head - Technical Solar and ESS, POM Systems and Services Pvt. Ltd. said, “While a robust energy storage system can offer a tariff advantage. But more importantly, it offers reliability. For an industrial unit, a loss of production hours can be a huge hit on the operation of the company. We have installed an energy storage system that works in a mechanism similar to this in Pune which is working efficiently and we are now installing a similar system in another factory near Pune.”
Talking about the financing options, Rutter stated that nowadays, there are multiple options as far as financing for solar projects is concerned. However, banks and NBFCs are still hesitant to finance energy storage projects.
Gandhi opined, “In the C&I segment, the OPEX model for energy storage is still not evolving. In the large-scale utility, there is a lot of activity with 70 GW having already been tendered and another 30 GW in the pipeline. In the next 18 months, we will have about 20 GW of BESS in India. The demand in the C&I segment is rather slow. Now the price has come down and with solar energy gaining momentum, battery storage is also seeing an uptick.”
Panellists also discussed about alternative technologies and solutions like green hydrogen and pumped storage. “In hydrogen, RTE is always going to be lower than batteries. With the Lithium-ion system, we have reached about 90 percent RTE. Theoretically, hydrogen has a limit of around 60-65 percent. So, even if the electrolyser and fuel cells get cheaper, it’s highly unlikely to challenge the battery storage. However, I am very bullish about hydrogen in industrial decarbonisation and the hard-to-abate sector,” stated Rutter.
Ramesh added that pumped hydro can emerge as a potential challenger in the utility-scale storage segment.
Gandhi, however, was sceptical about the impact of pumped storage for the C&I segment. “It’s an unproven technology. Right now, the only viable option for the C&I segment is the battery storage,” he said further adding that Lithium-ion cycles have now reached 10,000–12,000. “Newer technologies are trying to push this to 30,000 cycles giving a life of 30 years which will be on par with the solar system.”
The panellists also discussed circularity in batteries and prolonging their usage. Talking about the second life use of electric vehicles (EV) batteries, Rutter opined, “Batteries that may have reached the end of life for EVs can still have 70-75 percent state of charge remaining and can be repurposed to be used as stationery storages like for example in C&I projects.”
Gandhi added, “Right now, the penetration of EVs in India is low but down the line, as the EV ecosystem matures, the second-life use of EV batteries will definitely prove to be beneficial for the C&I segment as it will bring the cost of energy storage down. I think this will become very attractive a couple of years down the line.”
Talking about repurposing EV batteries, Ramesh shared, “Some UPS companies are using these batteries by integrating them with UPS systems and selling them at a much lower cost, with a warranty of 2–3 years.”
He further informed, “A Bengaluru-based company specialising in second-life batteries approached us for inclusion in our off-grid and hybrid inverter solutions. Testing for the same is ongoing.”
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