Energy Storage System: The next big thing in Indian Power Sector

Indian power sector is the most diversified power sector in the world, where thermal power plants hold the major share, and wind energy plays a dominating role among other renewable energy sources. However, India still has the lowest per capita electricity consumption among the BRICS nations and has 1/3rd of the global average electricity consumption. In order to achieve power for all and increase the per capita electricity power consumption, the current government has set an ambitious target of capacity addition of renewable energy of 175 GW by 2022. According to CARE rating, India’s untapped potential for the wind and solar energy are 77% and 96% which again creates huge potential for the renewable energy market. Hence it is planned by the present government that, 60,000 MW wind power and 1,00,000 MW solar power will be added by 2022.

The government has also initiated the $11 billion rural electrification program under Deen Dayal Upadhyaya Gram Jyoti Yojana, which aims in electrifying around 18,452 villages. It is estimated that around 14,204 villages can be electrified by grid extension, while the electrification of remaining villages (around 3,449) creates an opportunity for microgrid market in India. The government has planned to develop 10,000 renewable microgrid and mini-grids to electrify the houses of around 237 million people in energy poverty region, which will further achieve the present Government's commitment for 100% rural electrification by 1st May 2018. The Government also provides provision to include the installation cost of rooftop solar system in house loan.

The Indian government has also taken steps in the automotive sector because balancing infrastructure growth with sustainability is its prime focus. The decrease in CO2 emission and dependency on oil has become the main agenda in the present era. It is estimated that India will be the third major auto market in the world without having the domestic reserves capable enough to fill the tanks. This creates the opportunity for electric vehicle market in India. According to Society of Manufacturers of Electric Vehicles (SMEV), the sales of the electric vehicle in the country grew by 37.5% from 2014-15. The Government has aimed at making India, 100% electric vehicle nation by 2030. National Electric Mobility Mission 2020 (NEMM 2020) and the Faster Adoption and Manufacturing of Electric Vehicles (FAME) program are the two major programs launched by the government of India for driving the market of the electric vehicle in India. Under the scheme, the government plans to sell 6 million electric vehicles by 2020. The implementation of electric vehicle will further increase the demand for power, which can be fulfilled by the mentioned renewable energy addition.

All these new schemes by the government are basically for the rural India, urbanization (Smart cities), automotive, manufacturing, industrial, etc. Hence this further leads to a question for the successful reliable power supply with less aggregate technical and commercial losses to the end-user industry with the help of low PLF renewable energy (PLF of solar in India is 20%, PLF of the wind in India is 25%.). 

With the effective implementation of the above programs by the government, the Indian power sector has slowly started witnessing its positive impact on the country’s economy. But on the other side, India has also started facing the problem that the European nations are facing these days, i.e. Curtailment of power. In 2016, the variation in wind and solar energy has already wasted around 15-20% of renewable energy in the country. Even the grids in the country are not that efficient to manage the fluctuation in renewable power.

This creates the jackpot scenario for energy storage system (ESS) manufacturers to get into the Indian power market because installation of renewable power projects and extracting power from it will not solve the problem. It needs efficient energy storage system to provide the above-mentioned benefits from the renewable energy. ESS will also help the urban and rural areas to generate revenue and pay back their loans for renewable energy installation by supplying energy to other communities or grid at the time of power shortage Indian Energy Storage Alliance (IESA), estimated that by 2022, of about 70 GW and 200 GWh of energy storage system will be required in the country and which will also be the highest in the world. Applications like wind and solar energy integration, frequency regulation, peak management, T&D deferral, diesel usage optimization and electric vehicles will share around 50% to the ESS market in India by 2022.
There are already 31 projects of ESS of different types, such as thermal storage, electrochemical storage, and pumped hydro system. Some of the major players like AMCO, Artheon Electronics Limited, Arise India Ltd., Base Batteries, Eastman Auto & Power Ltd, ExideIndustries Ltd, Southern Batteries Pvt. Ltd, Sukam Power Systems Limited, andPanasonic Energy India Co.Ltd. are already present in the Indian ESS market.

Today is 2017, and if we take an optimistic view for all the targets set by the government, then this is the perfect time for various other energy storage manufacturers (both domestic and foreign players) to invest in this sector and grab the maximum market share by fulfilling the demand for reliable power in the nation.


Article by Binayak Ransingh, Senior Business Analyst- Power & Utilities

Follow him on LinkedIn for more content.

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