Stabilize renewable power supplies
In the process of energy transformation, increasing the proportion of renewable energy supplying power to the grid means that the amount of generated power will be affected by weather, making it difficult to control. To improve grid stability and renewable energy utilization, smart grids must be developed and paired with energy storage systems to regulate and dispatch electricity efficiently. This can largely be achieved by storing surplus wind and solar energy in an energy storage system. For industrial and corporate users, such systems serve multiple purposes, including peak shaving, optimizing contract capacity, and providing backup power. This approach energy management is widely considered the most versatile green energy strategy.
Energy storage is largely assumed to support renewable energy in achieving its set target of succeeding 40% of installed capacity based on renewable sources by 2030. There are various underlying issues when it comes to the dependence on renewable energy and enhanced integration of renewable energy with the grid. The intermittent nature of renewable energy and the limitations on its ability to fluctuate according to demand lead to the waste of a certain amount of capacity. Energy banking has already been adopted to tackle this setback. Although, this has led to numerous regulatory issues springing up such as banking directly impacts the financial viability of distribution companies, which have lately begun restricting banking facilities. Energy storage has the wherewithal to address several such constraints.
Who should own energy storage and why?
There are various entities which own energy storage systems, some of them are generating companies, distribution licensees, transmission utilities, merchant power plants, bulk power consumers, or unrelated third parties. With regard to this, there is another adversity posed to them which is the dependence of regulatory treatment on the ownership of energy storage assets which further includes market entry fee, cost recovery structures/mechanisms (pricing), grid integration, use of licensee’s assets, and revenue sharing.
Case in point, when the transmission or distribution licensee own storage facilities, it can be utilised to properly stabilise grids and relieve any underlying congestion in them along with moving conventional generation to satisfy peak demand. In these scenarios profit does not act as the motivating and pushing factor. Whereas, a distinct contradiction would be when storage assets are utilised by generating companies wherein profit would certainly pose as a crucial prerequisite. Energy storage is capable of effectively minimising bulk/industrial consumer’s dependency on distribution companies as a backup option. However, the repercussions of this would be distribution companies raising the tariff for retail and domestic consumers, which will influence their operations considerably.
Notes to cost evaluation
As per the ownership structure, coupled with the objective behind the storage assets, the cost recovery mechanisms differ. It should be specified that when it comes to committed application of the energy storage systems by the generating company or the transmission licensee, the storage system’s cost together with energy storage’s service cost can be included in the tariff determination of the generating company or the transmission licensee. The reducing cost of storage solutions, together with rooftop solar solutions, is about to bring a great transformation to the Indian power sector. A number of countries around the world has already adopted solar power with battery storage.
There is increased feasibility of storing solar power using batteries and utilising it during peak hours owing to dwindling prices of battery. As of now, commercial and industrial consumers in India bear exorbitant electricity costs combined with recurring disruptions in the power supply. Issues such as these can be effectively resolved with the aid of installing a solar plus storage system which also leads to lowering of the company’s electricity bills. Rooftop solar with storage system is a profitable choice for both end consumers as well as discoms. Consumers can avail the perks of dependent and affordable backup power. Their demand can be managed using a storage system supported with a reduction in demand charges. A recent ban on diesel generator sets in certain parts of India (Delhi/ NCR) has brought about the need for new energy sources. Consumers can thereby save the cost of alternate energy from diesel generator sets (due to power cuts). For environmentally conscious consumers too it is a great alternative.
With regard to Discoms, it vastly assists in the minimization of transmission and distribution losses and further cuts down on the investments in transmission and distribution infrastructure. It is projected that solar-plus-storage systems will undergo a prominent boost in the renewable energy market. The government is focused towards solar-plus-storage systems which is deeply highlighted through the hybrid policy in place and the recent award of the renewable project-cum-storage capacity.
In the upcoming months there will be a transition to grid-independent systems in the renewable energy sector and as per industry executives, storage systems like solar-plus-storage will certainly see a significant thrust in the market. Solar-plus-storage, either battery or pumped-storage hydro system, brings its own benefits primarily bringing down the intermittency in generation pattern while permitting it to meet the peak load as well. Although, a defined structure for an assured supply of clean energy guides towards a necessity for a refined policy and regulatory framework for energy storage, akin to India’s policy on renewable energy, combined with investment incentives, upgraded storage technology, and reasonable targets for building storage capacity.
Innovative energy storage technologies play a vital and an important role in renewable integration, energy access, emobility and the smart cities projects as strategized by the Indian Government. In India, we are also at a critical stage in building a manufacturing ecosystem for advanced energy storage technologies. These will oblige shifting requirements of electronic and auto industry for both short term and long term altering energy storage requirements in supply grids and as well as renewable energies. With these key developments in renewable energies and energy storage, the world should be significantly free of dependence on fossil fuels in near future.
Having questions? Talk to a Delta renewable energy expert