From Intermittent to “Dispatchable”: The crucial role of BESS in India’s transition to renewable energy

Currently, ~60% of the world’s electricity production comes from burning fossil fuels.? While the share of renewable energy in electricity production has continued to grow rapidly over the past decade, we now face the dual challenge of

i) integrating these large intermittent sources to the grid without causing grid instability, and

ii) meeting the hourly, daily and seasonal electricity demand in a reliable and “dispatchable” manner.

?Successful grid integration of these intermittent sources has already been achieved with existing BESS technologies in many countries, with the US, China, Australia, Japan, and now India installing large grid integrated BESS facilities to provide a range of ancillary and transmission-related services.? Increasingly, these BESS systems are also providing load-levelling and helping meet intra-day peak demand. ?Two projects are worth mentioning here - the Hornsdale Power Reserve in Australia and the Gateway Energy Storage project in the US, are both examples of BESS storage playing a vital role in improving grid stability, facilitating a higher integration of renewables, and delivering cost savings by replacing the need for traditional fossil-fuel based grid services.

?Enabling the second goal of meeting the hourly, daily and seasonal electricity demand in a reliable and “dispatchable” manner, will most likely require a combination of energy storage technologies/solutions.? While BESS can now provide up to 6 hours of storage with current technology and economics, long-duration energy storage options such as Pumped hydro, Compressed Air, and perhaps even Hydrogen, may need to play critical roles going forward.? There is reason for optimism about the role BESS can play even in long duration energy storage.? Over the last decade or so, battery energy densities have kept increasing, and battery costs have kept decreasing (2023 RMI report on X-Change: Electricity).? Similar trends of cost and technology improvements in solar modules and wind turbine generators over the past decade provide optimism that this trend in BESS is very likely to continue, projecting an increasingly important role of BESS in energy storage across all durations.

The inclusion of storage solutions needs to happen not only in large centralized generation assets, but also into distributed energy resources, including micro-grids and rooftop solar (residential and C&I).? Moreover, integrating distributed generation with storage could empower consumers to become prosumers—those who produce and consume electricity—potentially leading to significant reductions in electricity costs. On a larger scale, this integration could support the grid during peak demand times and reduce the need for investment in large CapEx, centralized infrastructure.

The large scale deployment of energy storage is crucial for India's decarbonization pathway. ?Given India’s stated ambition of generating 50% of its electricity demand from renewable energy by 2030, energy storage has to accompany the build-out schedule of wind and solar in the country to meet this aggressive target.?Various policies, incentives, and a supportive regulatory framework have been crafted across the central and state governments to support this transition.? As of December 2023, India had ~5 GW of installed pumped hydro capacity, with a target of achieving 18 GW by 2032. Various states have released tenders for pumped hydro storage including Maharashtra (1 GW), Karnataka (1 GW) and Madhya Pradesh (13.8 GW), along with agencies like NTPC (2 GW).? Both Central and State governments have been very active in recent years in tendering out projects that require BESS integration. These are primarily wind-solar hybrid projects that require battery energy storage to satisfy peak power requirements across specific hours of the day or provide FDRE (Firm, Dispatchable Renewable Energy) that meet specific DISCOM load profiles. Projects like these are specifically targeted at replacing the role that non-renewable energy sources currently play in providing stable and firm power to the grid. An estimated 8 GW of tenders that require energy storage integration have already been awarded in India with ~5 GW awarded in 2023 alone. An additional ~5-6 GW of standalone BESS is expected to be tendered in 2024, complemented by Peak Power / FDRE tenders of ~15-20 GW. The Central Electricity Authority projects a requirement of 42 GW of BESS and 18 GW of pumped hydro capacity in order to meet targeted renewable energy penetration by 2030 at high capacity utilization while maintaining grid stability.

Hero Future Energies has been particularly active in this niche within the RE market in India and has secured multiple wins since April 2023. We have won 460 MW of capacity (AC) across the SECI Tranche-VI,? SJVN (including Greenshoe) and NHPC Peak power tenders, as well as 240 MW of capacity (AC) in the SECI FDRE-II and NTPC FDRE Tranche-II tenders. These projects emphasize our focus on providing “dispatchable” renewable energy to support decarbonization of the grid while ensuring a reliable power supply, and paving the way for a carbon-neutral economy.

As the world forges ahead with its energy transition, energy storage, especially BESS stands out as a pivotal technology enabling this transition. Its ability to make renewable energy sources grid-compatible, and eventually reliable and dispatchable, will make it the key to decarbonizing the electricity sector.