INTERVIEW
Scaling up India’s storage capacity will be slow: IEEFA India will need 27GW of grid-scale battery, the Central Electric Authority said.
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ndia’s continued pursuit to attain its ambitious 450-gigawatt (GW) renewable source by 2030 gives rise to the need to ramp up its storage capacity to 27GW. In Delhi alone, 600 megawatts (MW) of storage capacity is needed—a drastic increase from 10MW currently. Asian Power sat down with the Institute for Energy Economics and Financial Analysis Energy (IEEFA) Economist Vibhuti Garg to tackle the RE+ approach India should adopt. What does India’s shift to renewable energy mean for the coal sector and how is this affecting coal plants? During the months of mid-August to early November, there has been some coal shortage crisis happening in China, as well as in India. India also witnessed the electricity demand dropping in the financial year 2020 and during the early months of 2021. As a consequence, coal stocks in India hit a new record high of 132 million tonnes at the end of the financial year 2021, exceeding the average of 80 million tonnes in the previous five years. There was an expectation that India might witness another COVID lockdown, and as a result, the power plants were playing safe. They feel that they did not need to increase the coal stockpiles at their end because the plant load factors (PLFs) would go down and they won’t need or there won’t be enough demand to increase the generation. In September and October 2021, India witnessed increased coal shortages with the majority of plans with critical coal supplies. The government realised that and sprang into action. They asked captive mines to ensure maximum use of their mines and supply power to coal-powered plants. Further, the government ramped up production and even uptake of coal by increasing the rate for coal transportation. India witnessed an increased energy demand, but supply was becoming a bottleneck because of the extended monsoons and uptake. By the second-third week of November, the situation has improved and, fortunately, the temperatures have gone down in the northern part of India leading to reduced demand because the air conditioning load has substantially gone down. With all this crisis, few states like Punjab, Delhi, and Maharashtra, agreed that they will buy power from imported coal-based plants to meet the energy deficit in their state and import fuel. Further, there is a push for increasing domestic coal production, but there are limitations given that there is no global financing for funding any new coal mines or coal-fired power plants. If you now compare renewable energy with the cost of coalbased power plants, they are far cheaper, but definitely, there are grid integration costs involved. The batteries are still expensive for Indian consumers and the government has come up with certain production incentives. SECI, the Solar Energy Corporation of India, and NTPC Limited are also coming up with big energy storage projects. We are expecting more players to enter the market and more storage capacities to be developed. We will see a downward trajectory in energy storage prices in India, the same as what we are seeing in other parts of the world. We are hopeful that, in the future, storage or other newer technologies, like green hydrogen industries will have a much bigger role to play. 26 ASIAN POWER
Vibhuti Garg, Economist, Institute for Energy Economics and Financial Analysis Energy (IEEFA)
States like Punjab, Delhi, and Maharashtra, agreed to buy power from imported coalbased plants to meet the energy deficit in their state and import fuel
Can you tell us about the companies that are investing in storage and their plans? So far, we just have a very small-sized battery plant of 10MW from Tata Power in the state of Delhi. The Delhi power minister talked about a plan to create a storage capacity of 600MW daily in the form of power banks. This would be a huge setup from the city’s existing battery storage capacity, which is the only existing capacity in India. Then we also have Tata Power that has bagged another big storage project in the city of Leh, in the newly formed union territory of Ladakh, which comprises 50MW hours of storage capacity. It’s going to be co-located with 50MW of solar capacity and this capacity is likely to be commissioned by 2023. Starting with 50MW hours, Tata Power has planned 13GW hours of gridscale battery storage in Ladakh. We also have large players like Reliance, Adani setting up huge Giga factories in India for battery storage. But it will take some time. It won’t be in the next year itself. Reliance has acquired a lot of companies for both solar module manufacturing, and even battery storage companies, which will help them to access these newer technologies. Till the time domestic manufacturing picks up, we will have the Indian players tying up with companies in China and other parts of Asia for import. It’s gonna be a mix for a while and then maybe, with all these factories becoming operational, we’ll have more domestic solar modules and storage manufacturing happening in India. For the cost of battery storage, I can tell you in rupees per kilowatt-hour (kWh) what is the likely price if you combine solar with four hours of battery storage. So, the tariff turns out to be INR6.8 to INR7 per kWh, which is on the higher side.
