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Batteries: The Only Missing Link in India’s Solar Energy Story

By Vineet Mittal, Vice Chairman of Welspun Renewables

The renewable energy industry is registering an unprecedented, sharp growth in India. The total renewable energy installed capacity in India at the end of FY 2014–15 stood at 35.77 GW. The Indian government plans to increase this capacity to 175 GW by the end of 2022. India’s renewable energy market is growing sharply — the installed capacity jumped by 12.9% during the 12 months to March 31, 2015. India added over 4 GW renewable energy capacity in 2014–15, a capacity addition of 8.5% more than the targeted figure of 3.7 GW. All three leading sub-sectors in the renewable energy (solar, wind and hydro) overachieved on the allocated targets. Solar power registered a sharp growth and now has a share of 10.5%, up from 8.3% at the end of FY 2013–14. India is poised to break into the global top five of solar power producers in 2015.

The central and state governments have made policies easy and friendly to encourage generation of renewable energy at all levels. Under the Make in India initiative, the government is offering easy financing and exemption from excise duty on various solar components, and state governments are drafting new net metering laws to encourage investments in the sector.

At such a crucial juncture, when all seems to be going well with the renewable energy story in India, the only missing link is a robust storage technology.

For a long time, solar power has suffered the myth that it is only useful during the day. We are on the brink of busting this myth. With the prevalent technologies, at average irradiance, utility-scale solar plants silently power grids during the day and turn obsolete in the night. But as battery storage technologies evolve, the solar energy landscape is poised for a quantum leap to light homes throughout the day. Once cost-effective and high capacity batteries become a reality, India would not be far from achieving its 100 GW solar power target (40 GW of which is rooftop solar, for which batteries are critical). This will also finally eliminate terminologies like erratic, irregular, intermittent, and weather-dependent from common renewable energy rhetoric. Batteries will allow the grid to power streets even when the sun has turned its face around or when wind has stopped blowing. A few years ago, even such a thought was inconceivable.

According to a study by the US government’s Lawrence Livermore National Laboratory, more than 60% of the energy we generate is lost between the time it is generated and the time it is consumed.

What solar energy, backed with storage technology, can do must not be underestimated. A number of small and large developed and developing nations are today demonstrating that solar grid parity and a sustainable green future are not ideas of the past. Despite ordinary irradiance levels, Australia added a rooftop solar system every 2.8 minutes in 2014, rooftop capacity in Germany crossed the 8.5 GW mark in 2015 and has achieved grid parity. Israel is working towards solar power since the country is strategically vulnerable and an attack could demolish its grid infrastructure. Saudi Arabia (where a new record-low solar price was just bid) has announced an investment of $16 billion into solar and wind power. Many developed economies, including the USA, are looking at a 20% or more renewable energy target in their energy mix, which could be difficult to achieve without a strong battery technology.

It would be appropriate to draw a parallel between India’s mobile phone revolution with the work-in-progress solar battery revolution. An outgoing call from a mobile phone cost a whopping USD $0.25 to $0.40 in the early 1990s, and therefore remained the luxury of a few. But public-private partnerships in the telecom sector, competitive market policies, and technological advancements brought the costs significantly down. The mobile revolution not only facilitated inexpensive communication, but subsequently empowered communities across economic sections in profound ways. This revolution was possible because mobile technology did not require telephone connectivity with towers (enabling wireless connectivity) and users could customize the phone according to their personal calling, messaging, and data needs.

Solar battery technology has a similar advantage over the utility-scale plants, but on a much larger scale and towards an all-encompassing goal. Solar battery storage is the quickest energy remedy for over 100 million Indian households who continue to remain alien to the grid infrastructure. Over 300 million Indians are deprived of regular electricity supply. Moreover, India’s vast rural landscape has abundant rooftop space. Many Indian states have already passed net metering laws which would allow rooftop solar consumers to sell surplus power to the state distribution companies. Studies by the US Western Electricity Coordinating Council have found that finding better ways to store energy could cut total transmission and distribution losses by about 18% and boost the efficiency of electricity use by up to 11%.

What is stopping a battery revolution is not a technological breakthrough, but a technological advancement. A solar battery costs around $450 for each kW hour of storage. More than $3 trillion has already been invested in small-scale solar and battery storage worldwide. Today, the solar battery market — estimated at $50 billion annually — is poised to increase 10-fold in just three years to 2,400 MW. Even without any special effort, lithium-ion batteries would be cost-effective to be deployed on a large scale within five years as a result of a yearly cost reduction of 20% to 30%. Battery costs have seen substantial decline every decade since inception in the early 1990s.

At least five major technology companies are working towards making batteries last longer and making them affordable to enhance storage efficiency. Tesla in partnership with Panasonic has already offered an open market battery price of $250 per kilowatt-hour. While developed economies are gradually accepting this cost model, for most developing countries, it is unaffordable. But that should not be disappointing, because the battery costs are declining fast.

Tesla is investing $5 billion near a lithium mine in Nevada (US) with an aim to produce batteries that will cost 30% less. The company has planned a 35-GWh annual production capacity, which is more than the total worldwide production of lithium-ion batteries in 2013. US-based Aquion Energy which manufactures sodium-ion battery systems, has installed a battery system in Hawaii which can store electricity generated by 512 solar panels.

Batteries come at a cost which will soon be affordable and finally end the cyclical argument that solar power is not intermittent or cost competitive with fossil fuels. Solar’s time has come and the only foreseeable solution to the decade-long stumbling block that power consumption in India peaks in the evening is to store the clean solar energy.

Vineet_Mittal_ViceChairman_WREPLAbout the Author: Vineet Mittal is Vice Chairman of Welspun Renewables, India’s largest solar power generator.  His strengths lie in envisioning and implementing large-sized complex projects and building up global organizations, with a strong emphasis on generating sustainable clean energy.  Alumnus of Harvard Business School, Vineet is a significant contributor in developing strategies and policies for emerging economies. As industry advisor to two of the largest Indian states he has been crusading for balanced sustainable growth. Vineet is the President of the Solar Power Developer’s Association. He is the Co-Chair of the renewable energy committee and the Chairman of the solar task force at ASSOCHAM. Vineet is on B20’s Infrastructure & Investment Taskforce and World Economic Forum’s (WEF) Steering Committee on Infrastructure and Urban Development.  He was felicitated twice as ‘The Solar Power Man of the Year’ in 2014 & 2012 and as “Entrepreneur of the Year” at The Madhavrao Scindia Leadership Awards 2009. Vineet has also been recognized with the ‘Global Excellence Award in Renewable Energy 2013’ at the 4th World Renewable Energy Technology Congress (WRETC). He has been invited as expert in forum series – IHS Energy’s CERA Week, Danish Embassy’s ‘Global Green Growth Forum’ in Copenhagen, WEF’s sessions in Davos, India & Myanmar on innovation – low carbon finance – growth through sustainable energy; presented white papers on sustainable energy, incentivizing efforts of forestation and public-private-participation for rural community development.

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