User Guide for India s 2047 Energy Calculator Electrical Energy Storage (EES) 1
Table of Contents I. Overview of the Sector... 3 I.a Technology Overview... 5 Mechanical... 5 Chemical... 6 Electrical... 6 Thermal... 6 I.b Applications of Energy Storage... 7 II. Existing legal/regulatory and policy framework... 8 II.a National Electric Mobility Mission (NEMM)... 8 II.b Net Metering Policy... 8 III. Drivers... 9 IV Assumptions... 11 V. Methodology... 12 VI Scenarios... 13 VII Cost... 15 VII.a Assumptions... 15 Annexure... 16 References... 18 2
I. Overview of the Sector Government of India has set up aggressive renewable energy (RE) capacity addition target of 175 GW by 2022. The primary focus of Government is on the promotion and scaling up of electricity generation from the renewable energy. High intermittency of renewable energy make it difficult to forecast and schedule for dispatches. Higher penetration of RE resources will ultimately (with rapid deployment) result in a stage where the grid will become unstable. One of the most effective solutions for addressing this high intermittency while allowing scale up of these technologies is the use of energy storage technologies as energy storage can act as a capacity in the entire energy value chain i.e. - generation, transmission, distribution and loads. Large-scale storage facilities can arbitrage base load generation by storing electricity during non-peak hours and providing power in long-duration discharges and also provide low-cost ancillary services such as load following and spinning reserves. Large scale energy storage helps on both the supply and demand side of the wholesale generation market. Although they do help offset the need for additional peaking capacity, large-scale storage facilities are focused more as system optimizers rather than generation replacement. Electricity storage is a three-step process that consists of drawing electricity from the grid, storing it and returning it at a later stage. It consists of two dimensions: the power capacity of the charging and discharging phases, which defines the efficiency of the storage system to withdraw or inject electricity instantaneously from or into the grid; and the energy capacity of the storing phase, which measures how much energy can be stored and for how long. As a consequence, electricity storage has very different uses, depending on the combination of the power rating and discharge time of a device, its location within the grid and its response time. Globally Energy Storage Technologies are expected to play a crucial role in shifting to large scale renewable energy. They can help manage the problems of fluctuating generation and regulating generation to match demand. All major economies have specialized focus on this area. Mckinsey has identified storage technologies as one of the 12 most important technologies for future. India s energy systems face multiple challenges such as Constrained transmission and distribution capacity Large unmet energy demand Low energy access in rural areas Continuing dependence on coal based generation adding rigidity to the system. India has aggressive targets for shifting to renewable energy, which at present is unscheduled, and stresses the grid operations.. One of the important means to meet these challenges is use of energy storage technologies. With launch of Smart Grids and Electric Vehicles missions, and new programs for on-site solar energy and rural micro-grids, energy storage has become a crucial component of energy strategy for India. 3
Energy storage provides several benefits such as Time shift Grid stabilization Peak shaving of demand Improved generation efficiency Reduction in carbon emissions Improved transmission capacity utilization etc. Other applications for electrical energy storage systems such as Market Price arbitrage Reserves Frequency regulation Ancillary Services (CERC has already issued regulations to this effect) System Renewable integration System capacity Distribution Investment deferral Transmission Voltage compensation End-User Power reliability These application are shown in annexures by their installed capacity in 2013. These benefits and applications, when modelled for various stakeholders and applications, can guide the creation of appropriate policy, regulation and business models. 4
I.a Technology Overview There are various technologies used for electrical energy storage, some of them are assumed below: Figure 1: Electrical Energy Storage Technologies Source: IEC Mechanical a. Pumped Hydro Storage Conventionally, two water reservoirs at different elevations are used to pump water during off peak hours from the lower to the upper reservoir (charging) and the water flows back to move a turbine and generate electricity (discharging) when required. Their long lifetimes and stability are what makes them ideal storage systems. However technical and commercial issues have prevented their large scale adoption. b. Compressed Air Energy Storage (CAES) This technology is based on the conventional gas turbines and stores energy by compressing air in an underground storage cavern. Electricity is used to compress air and when needed the compressed air is mixed with natural gas, burned and expanded in a modified gas turbine. c. Flywheel Rotational energy is stored in a large rotational cylinder where the energy is maintained by keeping its speed constant. When the speed is increased higher amounts of energy are stored. A vacuum chamber is used to reduce friction, and the rotors are made of carbon fibre composites suspended by magnetic bearings. Flywheels are extensively used for space applications. Latest generation flywheels are reported to be suitable for grid applications. 5
Electro-Chemical a. Batteries Chemical Different technologies can and will co-exist in battery technologies. However all of them need to mature to higher efficiencies and capacities. The various battery technologies available are: i. NaS (Sodium Sulphur Batteries) ii. LIB (Lithium Ion Bromide) iii. Lead Acid iv. Vanadium Redox flow batteries a. Fuel Cell Electrical A fuel cell is a device that converts the chemical energy from a fuel into electricity through a chemical reaction with oxygen or another oxidizing agent. Fuel cells are different from batteries in that they require a constant source of fuel and oxygen/air to sustain the chemical reaction, they can however produce electricity continually for as long as these inputs are supplied. a. Double Layer Capacitor An electric double-layer capacitor, or super capacitor, is capable of charging and storing energy at an exponentially higher density than standard capacitors. Super capacitors stop charging when their capacity limit is reached, eliminating the need for detection units to prevent overcharging. b. Super Conducting Magnetic Coil Very much in its infancy stage, it has a superconducting coil and a cryogenically cooled refrigeration system that once charged stores the energy in the magnetic field created in the coil for an indefinite period of time. 1MWh systems used for grid applications, 20 MWh systems than can provide 40MW for 30 mins or 10MW for 2 hrs are under development. Thermal Systems use cold water, hot water or ice storage to store the heat and use for later. The efficiencies vary with the material. They are important for integrating large scale renewable energy as concentrated solar thermal technology can be used as a reliable and despatchable source of energy to balance the supply and demand. 6
I.b Applications of Energy Storage The value of energy storage technologies is found in the services that they provide at different locations in the energy system. These technologies can be used throughout the electricity grid, in dedicated heating and cooling networks, and in distributed system and off-grid applications. Furthermore, they can provide infrastructure support services across supply, transmission and distribution, and demand portions of the energy system. Energy storage technologies can be used for power applications as well as energy applications: Power applications: Power applications refer to those requiring a high power output for a relatively short period of time (typically 15 minutes or lower). Energy Applications: Energy applications require discharge of many minutes to several hours at or near the storage system s nominal power rating. Source: IEA 7
II. Existing legal/regulatory and policy framework II.a National Electric Mobility Mission (NEMM) The Govt. of India has recognised the fact that at present the barriers to the greater adoption of electric vehicles (EV) are immense and given the importance of the initiative, the GoI launched NEMM in April 2015 with a target of 6-7 million Electric Vehicles by 2022. II.b Net Metering Policy Net energy metering is a type of Distributed Generation that allows customers with an eligible power generator to offset the cost of their electric usage with energy they export to the grid. So far, around 14 States have released net metering policies which gives consumer a provision to install Rooftop PV at their premises. Most systems will involve inverters with batteries. II.c Renewable Energy Targets Government of India has already set aggressive targets of 175 GW of renewable energy with 100 GW coming from solar, 60 GW by wind, 10 GW by biomass and 5 GW by small hydro. Integration of renewable energy will require energy storage technologies. II.d National Smart Grid Mission Ministry of Power has approved National Smart Grid Mission (NSGM) which has set aggressive targets for Microgrids which will require energy storage technologies. 8
III. Drivers The factors which influence the development of the energy storage technologies in India are: III.a Renewable Integration One of the main drivers of energy storage in India is increasing share of grid connected renewable energy resources. India has a huge potential for wind energy and solar energy. With the installation of these infirm renewable energy resources the challenges of their grid integration emerges. Fluctuations and unpredictability of these resources will lead to increased adaption of energy storage for base load. III.b Demand and Supply Gap India being power deficit country experiences both with energy deficit and peak deficit. Energy storage can play huge role in meeting the demand and supply gap as during peak periods when electricity consumption is higher than average, storage could complement the base-load power plants (such as coal-fired and nuclear). During the off-peak period when less electricity is consumed, costly types of generation can be stopped. This is a chance for owners of Electrical Energy Storage System (EESS) to store energy. From the utilities viewpoint there is a huge potential to reduce total generation costs by eliminating the costlier methods, through storage of electricity generated by low-cost power plants during the night being reinserted into the power grid during peak periods. With high PV and wind penetration in some regions, cost-free surplus energy is sometimes available. This surplus can be stored in EES and used to reduce generation costs. Conversely, from the consumers point of view, EESS can lower electricity costs since it can store electricity bought at low off-peak prices and they can use it during peak periods in the place of expensive power. Consumers who charge batteries during off-peak hours may also sell the electricity to utilities or to other consumers during peak hours. III.c Microgrids Microgrids will play an important role in solving energy problems in India. Microgrid can operate in parallel or in island mode to utility power grid. They can meet growing demand of the particular set of consumers whether it is connected through grid or operating in islanded mode.. Microgrids along with storage will allow for fast installation of electricity supply without the need for expensive transmission infrastructure investments and the lengthy development approval and construction process. 9
III.d Electric Vehicles Electric vehicles require storage technology for them to operate. Electric vehicles can also act as virtual power plants and can help in supplying power to the grid during peak hours and can charge during off peak hours. 10
IV Assumptions Some of the basic assumptions which were considered while making the scenarios were as follows: a. Development of low cost and efficient batteries and other energy storage technologies to mature in 5-10 years. b. Commercialization for batteries and other technologies in 5 15 years c. Development of Ancillary Services market offering regulation services in 2-10 years d. Promotion of microgrids all across the Country in 3 10 years e. Large roll out of Electric Vehicles (EV) by 2020 f. Continuous focus on renewable generation and integration to grid g. Energy storage is split into two types of applications: power applications and energy applications. Power applications refer to those requiring a high power output for a relatively short period of time (e.g. seconds or minutes). Energy applications require discharge of many minutes to several hours at or near the storage system s nominal power rating. h. Most of applications will be energy applications (1Hr or more), not considering existing UPS applications that typically provide 30 sec to 10 min backup for DG to start till 2027 (approximately 60% will be used for energy applications) i. It is assumed that ancillary services market will be matured in the near future and with the cost reduction in storage as well as changing the grid situations, energy storage systems will be used more for power applications post 2032. j. PLF considered for Pumped Hydro Power plant is 35% k. Efficiency for batteries and other type of technologies assumed is 80% 11
V. Methodology The main driving force for grid connected storage systems in the Indian power sector, is the increasing share of renewable energy which require storage to handle the supply variability. India will keep on facing power shortage as demand is increasing at much faster rate compared to supply. A hybrid solution of storage and renewable can help India in solving the problem. Level 1 It is assumed that with limited investments in research and development of low cost and efficient battery technologies, the cost of batteries remain high resulting in less commercialization, poor adoption of battery storage. Hence there is not much installation of electrical energy storage. Level 2 It is assumed that V2G (Vehicle to Grid) technologies will be maturing to offer storage solutions as large fleet of connected Electrical Vehicle s(evs) will operate as Virtual Power Plant (VPP) mode. More share of pumped storage will be developed. Various storage technologies on pilot basis will be employed in test beds at various parts in India. Storage technology will emerge but not at a desired pace. Level 3 It is assumed that partnership between India and other countries for smart grids and energy storage technologies will emerge and brings out some new and low cost batteries with higher performance parameters. Application of energy storage batteries on both the utility side and customer side (industrial and commercial) of the meter. Level 4 It is assumed that there will be opportunities for partnering with world class manufacturing and system integration companies that can leverage domestic manufacturing capabilities. 12
VI Scenarios Level 1: Renewable share (capacity) in total energy mix in India is 13.1% of total installed capacity as on March, 2015 and this is expected to increase to 63 GW by 2022 and 140 GW by 2047. With limited investments in research and development of low cost and efficient battery technologies, the cost of batteries remain high resulting in less commercialization, poor adoption of battery storage. Pumped storage hydro power continues to dominate the energy storage in India. Total grid connected storage in India will be 5GW by 2022 of which pump hydro storage is just above 4 GW growing to 8GW by 2032 and 10GW by 2042 and 15GW by 2047 in comparison with 4 GW in 2012. Level 2: Renewable share in total energy mix in India is expected to increase to 96 GW by 2022 and 491 GW by 2047. V2G (Vehicle to Grid) technologies will be maturing to offer storage solutions as large fleet of connected EV s (Electrical Vehicle s) will operate in VPP (Virtual Power Plant) mode. More share of pump storage will be developed. Various storage technologies on pilot basis will be employed in test beds at various parts of India. Hybrid solution of solar and batteries will be employed. Though the development of storage market will be in rising trend but it will be at slower pace. Total grid connected storage in India will be 20GW by 2022, growing to 35GW by 2032, 55GW by 2042 and 75GW by 2047. Level 3: Renewable share in total energy mix in India is expected to increase to 116 GW by 2022 and 823 GW by 2047. In addition to new technologies envisaged for level 2, partnership between India and other countries for smart grids and energy storage technologies will emerge and brings out some new and low cost batteries with higher performance parameters. Wind farms uses CAES (compresses air energy storage) for storage of energy during off peak hours, solar panel uses molten salt batteries. Opportunities for new project development and manufacturing emerges in India. Telecom sector will also take a lead in replacing their diesel generators with hybrid solution of solar and batteries. Total grid connected storage in India will be 25GW by 2022, 40GW by 2032, 80GW by 2042 and 100GW by 2047. Level 4 Renewable share in total energy mix in India is expected to increase to 206 GW by 2022 and 1530 GW by 2047. India will attain its potential of 20 GW by 2020. As per India Smart Grid roadmap, micro grids will be implemented in 10,000 villages and 100 smart cities till 2027, batteries will play a major role in these deployment. Wind mills will be integrated with hydro pump storage systems to operate them. India will follow IEA breakthrough scenario and total grid connected storage in India will be 40GW by 2022, growing to 60GW by 2032, 100GW by 2042 and 130GW by 2047. 13
Storage Capacity (GW) 80 70 60 50 40 30 20 10 0 130 100 75 4 15 0.1 2007 2012 2017 2022 2027 2032 2037 2042 2047 Year Level 1 Level 2 Level 3 Level 4 14
VII Cost VII.a Assumptions Some of the cost assumptions which were considered for the calculation purpose are as follows: a. Capital Cost is considered as per IRENA (International Renewable Energy Agency), India Energy Storage Alliance (IESA) and IEA. b. Other technologies consist of CAES, Molten salt, flywheel, supercapacitors etc. c. O&M cost for pumped hydro (Large Scale Storage) is taken as 2.5% of capital cost as per CERC tariff orders for point charges; 2% for low charges; 3% for high charges. d. O&M cost for batteries is considered as $20/kW, $25/kW, $30/kW for low, point and high estimates respectively as per IRENA, IESA and IEA. e. O&M cost for other storage technologies is considered as $5/kW, $10/kW, $15/kW for low, point and high charges respectively. 15
(GW) Annexure Bloomberg Data on Storage 1. Top 9 applications by total capacity. Projects considered here are either: a. Commissioned b. Financing Secured/under construction c. Announced/planning began d. Partially commissioned e. Permitted 1500 1250 1000 750 500 250 0 Storage Applications Source: Bloomberg New Energy Finance 16
Growth (%) 2. Energy Storage annual market forecast (2013 2030) 35 30 25 20.6 21.6 23.5 24.9 26.6 27.3 28.7 30.1 31.5 32.9 20 18.1 15 11.3 10 5 3.7 4.4 6.2 7.6 0 0.2 0.7 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Year Source: Bloomberg New Energy Finance 17
References Electricity Storage by SBC Energy Institute Report on Assessment of role of energy storage technologies for renewable energy development in India by PACE D IEA Technology Roadmap for Energy Storage 2014 Bloomberg New Energy Finance http://www.cea.nic.in/reports/monthly/executive_rep/apr15.pdf 18