Developing Energy Storage Key for India’s Decarbonisation, finds Study

In order to achieve its target of 450 GW of wind and solar by 2030, India’s wind and solar capacity must grow 20% year-over-year between 2022 and 2030. Developing energy storage is a key avenue for increasing India’s power system flexibility and the share of renewables and ultimately enabling India’s decarbonisation, finds a new study by the National Renewable Energy Laboratory (NREL).

To date, there has been no comprehensive assessment of cost-effective opportunities for bulk grid storage in South Asia. The new study, entitled “Energy Storage in South Asia: Understanding the Role of Grid- Connected Energy Storage in South Asia’s Power Sector Transformation,” provides a first-of-its-kind assessment of cost-effective opportunities for grid-scale energy storage in South Asia, especially in India.

Under All Scenarios, Major Opportunities for Energy Storage Through 2030 and Beyond

The study team, composed of Ilya Chernyakhovskiy, Mohit Joshi, David Palchak, and Amy Rose, evaluated storage growth under various technology cost, policy, and regulatory scenarios, resulting in a range of trajectories for storage growth over the next three decades.

By 2030, energy storage capacity from these scenarios in India ranges from 50 to 120 GW, or 160 to 800 gigawatt hours (GWh), and continues climbing to between 180 to 800 GW (750–4,800 GWh) by 2050. Based on this modeling, 50 GW of energy storage by 2030 is a lower-bound estimate for the total storage market size in India, with most of this capacity expected to come from battery storage projects.

Storage Projects Are Most Cost-Effective When Providing Multiple Value Streams

The team evaluated multiple value streams from energy storage and the potential contributions of storage to grid flexibility at different timescales are:

• Energy time-shifting throughout the day to reduce curtailment of renewable energy and reduce the cost of electricity during peak demand.
• Provision of reliable capacity for long-term system reliability, helping offset the need for new coal-fired power plants.
• Provision of on-call operating reserves needed to manage grid frequency.

Understanding multiple value streams in the study’s modeling was key, because energy storage projects are typically most cost effective when they provide multiple services, and cost-effective projects are more likely to get built when developers have access to multiple revenue streams. Additionally, as energy storage becomes a greater share of the overall capacity of the system, its ability to serve multiple roles will greatly impact the growth of the system.

For example, the study shows that when energy storage is barred from providing operating reserves, overall storage deployment in India is 24% lower compared to the reference case. In place of energy storage, new conventional resources, such coal- and gas-fired power plants, are built to meet the operating reserve requirement in that scenario. This leads to a 4% increase in overall system costs and a 15% increase in carbon emissions over the planning horizon.

Operational Benefits Extend Across the South Asia Region

For the South Asia grid including India, Bangladesh, Bhutan, and Nepal, energy storage can play a major role in future system operations. Modeling results found that energy storage supports the regional system by providing balancing services, which helps to avoid renewable energy curtailment and balance renewable energy forecast errors. It does this by bolstering ramping capabilities and shifting the timing of energy supply.

Opportunities for storage to improve grid operations and reduce costs individually in Bangladesh, Bhutan, and Nepal were also assessed. Bangladesh currently relies on expensive, high-polluting diesel- and fuel-oil-fired power plants to manage demand and provide peaking power. This study finds that energy storage could displace fuel oil consumption in Bangladesh, reducing the carbon intensity and the costs of grid operations. Storage in Bangladesh can charge during daytime hours and discharge during the evening peak, reducing the need to start up fuel oil generators.

Bhutan and Nepal, on the other hand, rely primarily on hydropower resources to meet domestic demand and to provide electricity exports to India. In both countries, adding energy storage helped optimize the use of domestic hydropower resources and reduce daytime renewable energy curtailment in India by shifting exports more to the evening hours.

“This study shows how a level playing field for energy storage to compete with conventional technologies can lead to an increase in renewable energy deployment, reduced air emissions from the power sector, and lower costs for electricity,” Chernyakhovskiy said.

“While we didn’t evaluate energy storage versus other emerging technologies, such as demand response, electric vehicles, or distributed energy resources, the results of this study make clear that cost-effective energy storage in South Asia is right around the corner.”