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Importance Of Energy Storage System For India

Indian power system is undergoing a phase of transformation with the vision of the GOI for integration of 175 GW of renewables by 2022. Renewable energy is characterized by inherent issues like variability, intermittency & fast ramping etc. Thus, commensurate amount of flexible power reserves are necessary to take care of such variations in demand in coming years.

Hence, reliable operation of the synchronous all India Grid in the envisaged RErich scenario calls for availability of adequate reserves & flexibility services in the form of conventional storage system like pumped storage hydro plants and non-conventional energy storage system viz. battery storage etc.

Overview and Types of Energy Storage Technologies

Energy storage is emerging as a viable solution to ensure sustainable grid operations, especially due to the technology improvements

Energy storage is the key component for creating sustainable energy systems. Current technologies, such as solar photovoltaic and wind turbines etc. can generate energy in a sustainable and environmentally friendly manner; yet their intermittent nature poses issues in power quality, dependability and grid stability. The increase in renewable energy generation can cause several issues in power grid. First, in power grid operation, the fluctuation in the output of renewable generation makes system frequency control difficult, and if the frequency deviation becomes too wide system operation can deteriorate. Secondly, renewable energy output is undependable since it is affected by weather conditions. Energy storage technologies have the potential to offset the intermittency problem of renewable energy sources by storing the generated intermittent energy and then making it accessible upon demand.

A widely-used approach for classifying EES systems is the determination according to the form of energy used. The figure below compares several storage technologies as per their commercial maturity. Pumped hydro and compressed air energy storage are the most advanced electricity storage technologies (in terms of commercial and technical maturity and deployment); others bring cost and risk premium due to their lower levels of commercial maturity. As technologies move from demonstration and deployment stage to commercialization, the cost of the technology reduces and the technical characteristics are often enhanced. For example, in certain technologies such as Batteries, technical progress to date has seen the overall improvements in efficiency and lifetime of the storage system. The time in which technologies mature is driven by many factors such as market incentives, installation volumes, technical constraints and geographical restrictions.

At present, world over around 1643 energy storage projects have been installed with an accumulated capacity of 193 GW9 . The vast majority ~ 94% of this capacity is based on pumped storage technology. Others include electrochemical, electro mechanical, thermal storage etc. There are approximately 1000 electro–chemical (batteries) storage projects that have been installed world over with an overall capacity of 3.4 GW10. This is mainly due to falling cost of batteries and improving technology, batteries as a means to store energy is likely to scale up significantly.

In India ~ 16 energy storage projects, using different technological solutions, have been installed of which ~9 are pumped storage projects with an installed capacity of 4.7 GW11. Others include electro-chemical which includes 7 projects12 with an overall capacity of. 125 GW.

Image caption : Types of Energy Storage Technologies

Source: SBC Energy Institute and Deloitte Centre for Energy Solutions

Economics of Energy Storage Technologies

…and due to expected improvements in economics of the storage solutions over the next few years.

Technological improvements are one of the major drivers of falling costs of energy storage system world over. The figure below compares the cost of energy storage across major energy storage technologies – Pumped Storage, Compressed Storage, Lead Acid Batteries, Lithium Ion Batteries, High temperature batteries, Redox flow batteries and Flywheel. The cost of most of the energy storage solutions in today’s context is considered expensive. However, for several storage technologies, there is reason to believe that costs will fall as production volumes increase. This belief is supported by historical cost developments such as the one for Lithium-ion batteries. The prices of lithium ion batteries have fallen by 73%13 between 2010 and 2016 driven mostly by demand form electrical vehicles and improving technology, and are likely to fall by another 72% by 2030, bringing the overall cost of lithium ion batteries down to USD 73-74/KWh14. This correlation, between cost and volume of production can be attributed to economies of scale, as well as manufacturing and engineering improvements that are likely to emerge by 2030. Given this trend, the prices of energy storage technologies are likely to fall between 30-60% range 15, depending upon technology under consideration.  

Thus, the falling cost of storage and improving technology in terms of life and range clearly can enable greater penetration of wind and solar in the grid, especially for India. However, policy and regulatory mechanisms will be required to facilitate integration of energy storage in the Indian Power System. A debate is required around how to incentivize capacity market for grid balancing in the interim period, while continuously promoting Energy Storage as a long term solution for Grid Integration.

Image Caption: Cost Comparison of Various Storage Technologies

Source: IRENA, Battery University and BNEF