Recording and presentations: The battery opportunity in India
13 November 2019
Automated transcription (it may contain errors)
Good afternoon Good morning ladies and gentlemen, depending where you are joining us from today, I just wanted to let you know that we’re going to allow one more minute a couple of more minutes. people to come into the room. Okay. And then we will begin but you are in the right place, we’re going to be discussing the battery opportunity in India. As you know, this is one of the largest markets in the world for energy. So it’s going to be really interesting and also a really large opportunity. I would like to invite you all to introduce yourselves using the chat and, and just say your name your company where you’re joining us from, we would like to see you know, how international usually our webinars are. The one thing that I would ask us you make sure to tag all panelists and all attendees in your reply so that we can all see it. Thank you very much and we will begin in one minute.
Okay, good morning ladies and gentlemen and welcome. I said good morning but I should say good afternoon really because most of you are on the afternoon here it’s still actually no that’s not true is after afternoon so yes, they’ll be for sure some people’s in the morning somewhere depending where you’re joining from. But welcome. So today this is one of the largest markets is one of the largest markets that is still requires a lot of demand for electricity as you know. And over the last few years, India has done a great job to get really affordable solar energy into the grid. And now the next step is of course to make all of this energy dispatchers that we can go toward some more and more renewable metrics over time. So this is what we’re talking about today. How and how did the battery market is going to develop in India, what has been done and what is expected for the future. With us today to experts in the topic, you know, working for many years in this industry, they’re going to give us a little bit of an idea of what’s working has been a pan out. I’d like to ask Rahul to introduce himself. First of all, welcome Rahul, can you tell us a little bit about you and your experience? And please unmute your microphone.
Thanks, Berlin. Hi, everyone. This is Robin Walker and president and founder of India energy storage Alex. I’m also currently Chair of global energy storage Alliance and have been working on energy storage space for now almost 15 years with customized energy solutions where I lead our global emerging technology practice.
That is greater who Thank you very much. And I actually met in a In an energy storage conference by the World Bank, you know, so there is a lot of work happening internationally as well. And I’d like to invite the details. So for to introduce yourself, please. You’ve also been working a few years on this.
Thanks, Berlin. Hi, everyone. I’m mother through the I am from ASL. I don’t share great experience like travel. I just want to be very clear. But as I’ve been working on the past sector for almost over a decade now, and I’ve been focused on energy storage for last few years, and our whole has been really instrumental in what they’ve been doing in India. We are very much focused on India. And as as we build India’s first and largest grid scale energy storage product. So going forward, I’ll be sharing some of our experiences there. What do you believe,
and as has been as everywhere, it’s not only in India, but I mean, it would be really interesting to hear what you guys are doing that suggests this is a truly internal national webinar. Usually we have someone from Germany, a few people from Germany, a jury, I see South Africa here. What are the Indians? You know, I hope there’s some Indians in the house. I’m sure there are. Don’t be shy, introduce yourselves, use the chat. Without further ado, LS. Rahul, if you can unmute yourself, share your screen and we’ll start with your presentation. That’d be great. And then we can take it from there. So let me just tell you guys how this is going to go. So at the beginning, we’re going to have a presentation, but our whole than that we’re going to have a presentation by idea. And then after that, we will take questions from the audience. So send your questions for the q&a, not the chat, you know, the chat is for other kinds of the q&a at the bottom in the little box, and then we try and take as many of those as we can. But for now, go ahead and tell us how it’s going to pan out them.
Yeah. Hi, everyone. Once again, this is Robin and I’m going to provide a quick overview about the energy storage opportunity. India. So, to start with, as most of you are familiar, India is growing very fast. India currently has a grid, which has a total installed capacity of around 350 360 gigawatt. and India has set a very ambitious roadmap for increasing the renewable penetration under the leadership of honorable Prime Minister strainer into the movie. So one of the key component of this is solar. India has set a very ambitious roadmap for deploying more than 100 gigawatts of solar by 2022. And in fact, most recently, Prime Minister Modi has also increased the scale where by 2030, India is targeting now, or 450 gigawatt of renewables, a majority of that is expected to come from solar. So it is not just the next two or three years but India is expected. sustain this growth of solar deployments for next decade to come. And there was a lot of skepticism when originally in 2013, India had launched national solar mission with a target of 20 gigawatts for 2022. Because that time, India had hardly maybe one gigawatt or not even one gigawatt, actually less than hundred megawatt of solar deployed. So, most of the experts were skeptic if India will be able to reach this 20 gigawatt, but in 2014, Prime Minister Modi increased the target and already in 2018, India across the 20 gigabyte which was the original target for 2022. So, right now, most of the experts do feel that India will easily meet the hundred our target it may be plus minus one or two years depending on if you’re talking to the government expert or industry experts. But India is definitely looking at scaling up renewable develop deployment particularly solar, where the prices of solar have come down very rapidly. The first options are the initial projects, which are done back in 2013 2014. The cost of solar energy was somewhere around 17 rupees, which at that time looking at the currency conversion rate would be similar to around 35 cents per kilowatt hour. Whereas, most recent auctions it has come down to around two rupees 50 per se or two and a half rupees per kilowatt hour. So, we have seen a tremendous decline in the cost of school solar with the rapid deployment of solar technologies. At the same time, India has a much longer history for deploying when India started deploying when in early 1990s, and India has all A very robust manufacturing base for when devotee were a number of companies including Sue’s long, which is an Indian company as well as region politic and other global giants including GE Cammisa VISTAs all of them have manufacturing capacity in India. And it is expected that by 2022, India would reach around 60 gigawatt of when deployment and going to 2025 26 we are expecting India will cross hundred gigawatt of wind deployments, most recently seminary which is ministry for new and renewable energy, they’re also giving support for hybrid projects. Whereas most of you are familiar. The wind and solar energy have slightly different availability patterns where, when is available more during evenings or early morning hours and solar energy obviously is available during the So India has a push for a hybrid policy where they’re looking at integrating wind and solar codecs jointly, and also now enabling addition of storage to this.
you’re familiar with the probably the california.com, which was originally made famous by California, so when in 2013, they did some simulations and showed that 2020 requirement of net load on the California electric grid, where with all the new solar coming in, the effective net load, which is procured from the grid is very low during the afternoon. And that creates a significant issue where one is the baseload generation requirement is low during the afternoon, so you may have to shut down some of the plants and in the evening, still, beyond 5pm 6pm when the sun is not shining, you still have to meet the evening people and that creates a significant increase in the ramping lexical generation required. Now in case of India we are expecting similar phenomenon. We are calling it Indian camel curve because of the UL ham both in the morning and in the evening. But this was the production which we had done few years back looking at hundred gigawatts solar penetration in 2022, and how it would create a challenge for India. But apart from the system level issues when you’re looking at integrating large wind and solar farms, you also need to take care of grid discipline at individual wind farm or solar farm level or at a state level. And this is area where energy storage is expected to play a very critical role. The left hand side chart shows how adding a very small amount of storage so in this case, we’re done the simulation for a smaller wind farm with 18 megawatt wind with four megawatt one megawatt hour of pieces without power batteries such as lithium titanate or UTM NMC type batteries where we showed that by using this small amount of storage you can actually stabilize the wind energy output into five minute step curve which is represented in the pinko on the left hand side. And this is very important right now for India, because Indian Government has the regulators have pushed for what is called as deviation settlement mechanism where all the renewable energy generators how to provide a day ahead schedule in terms of the forecast and they can divide it up to eight times during the day if there is change in the forecast, but ultimately within a 15 minute block, they have to be within the certain band of the forecasted energy. And that’s where this is going to be very important, where rather than just hoping for forecasting to solve all the problems, by adding a small amount of storage can actually provide a Significant flexibility and hedge against potential fines which will be levied against renewable developers. Similarly, the right hand side chart is giving the example of solar
solar project where we looked at
City of Portland, which is part of the Andaman Nicobar Islands in India, where right now the entire grid is powered by diesel generators and you how to actually ship this diesel almost 1200 kilometres on a diesel five boats and then use it for generating electricity on this and because of the cloud cover and if you add solar, it does not completely eliminate diesel generation but in fact because you are seeing significant wrapping which is represented by the blue CO in the back on the backside, on the right hand side chart, you actually may need to Keep certain diesel generators on standby mode just for meeting the wrapping requirement. And what we demonstrated that by adding again a small amount of storage, you can significantly cut down the diesel usage also the application where even with this one megawatt hour energy storage, it can support a five megawatt solar farm and it can eliminate almost more than 90% of the diesel usage required for the standby operation. So, these type of cases are generating a strong interest and fueled by some of the policy changes, we expect tremendous growth in this. The other area in India is our till maybe a couple of years back. We used to always quote that India has almost 300 million people who are not connected to the grid, officially. Now, all the villages in India are electrified, but still there are challenges related to the power quality and reliability. Right now most of these regions do not get 24 by seven power. Or even when they’re getting power there are significant issues in power quality in terms of the voltage fluctuations. So, we believe that micro grids is a concept going to be very important for India and specially grid enabled micro grids can play a key role in economic development of remote areas. At the same time, these micro grids are not only limited for rural areas, we are seeing more than 300 townships like the one which you are seeing on the bottom lip image and it is not just a graphical image it is actually a real Township. In fact, I live in the building right in the center of it so, I know it is real. So, there are almost more than 300 such private townships getting built all over India, which So, maybe a few thousand residents along with schools or small commercial and industrial state with the people who are up maybe around five megawatt some of these bigger townships which have industries also built around it. Could our peak load up around 50 mega and there is a growing interest in looking at distributed solar or similar applications because in India, these commercial industrial townships end up producing very significantly higher electricity talent from the distribution companies. So, integrating renewables and storage is a very cost effective solution for these townships. So, the India energy storage Alliance we have initiative called micro micro grid initiative for campus and rural opportunities, which is trying to address some of the policy barriers in this area and also bring together various stakeholders to try to accelerate deployment of micro budgets in India. On the policy side, sometimes it feels that oh India is suddenly woken up to the need for energy storage. But we have been working on this for almost last seven years. In 2013 ministry Power and center electricity agency they created a task force for evaluating integration of large scale renewables in India, where first time we were invited and we were able to highlight need for energy storage. And since then, there was energy storage roadmap develop, there was a policy paper developed for looking at role of energy storage for improving our quality and reliability back in 2014. And since then, we have seen number of steps taken to try to remove barriers for energy storage in India. And this year, imaginary Ministry of new and renewable energy, finalize the national energy storage mission, as well as the TIO which is a central policy Think Tank created a national mission for transformative mobility. And on the EV side, again, it has taken around by six years were from the original launch of the national electric mobility mission planning 2013 Indian government as well as states have taken the various steps to try to create a enabling environment for adoption of PBS. And also there is now growing focus on EV manufacturing in India. And we’ll talk more about that towards the end of the presentation.
So looking at both these opportunities in terms of the stage study and EV So first I’ll talk more about stage study market and one thing which sometimes international audience or experts miss out about India is in India actually there is already a very strong existing market for energy storage. India is one of the largest markets for lead acid batteries which are primarily used for home or small commercial backup, which is in India is called as inverters. Basically converting the DC power from the batteries into a see for using in the homes and small commercial in installations. Also India has a very strong Telecom, telecom industry with more than 600,000 telecom towers and majority of these telecom towers use diesel generators as a backup and also as a result almost every telecom tower has around 10 to 15 kilowatt hour of batteries included. So, considering these existing applications as well as the growing need for renewable integration, power quality micro grids, we expect that the Indian market between the base year of 2018 going to 2026 will be somewhere between 250 to 360 Giga hour out of which majority of the market maybe around 70 75% of the market will be behind the meter. And this is the area where we are super excited about India because although as I say we are working a lot on trying to address policies at a government level majority of the business cases for the Behind the meter applications already exists and as soon as better technologies are available and they can be financed, this market can be tapped in in a relatively fast fashion, no one has to wait for any approvals from any government officials. At the same time, if the national storage mission and related policies are implemented, then we can see when our pastor growth for the grid scale storage deployments in India. Similarly, on the electric vehicle side, our projection suggests that India would be somewhere between 110 250 gigawatt hours of demand for batteries for these vehicles. Within these again there are some segments such as electric two wheelers and low speed three wheelers which are currently relying on lead acid batteries. But we see along with the trend happening around the world in India, majority of the market for the transportation sector will rely on various types of you Demand batteries, and already between telecom and EV is India has actually deployed more than four gigawatt hour lithium ion batteries in the last three, four years. So, this is something which people miss out. Because of the great skill side as a DJ will explain the 10 Mega 10 mega project done by ES is the largest. But at the same time there is a large deployment taking place on a distributed scale, which is cumulatively given the size of India is adding up significant numbers. And again, don’t you don’t have to take my word for it. This was a announcement done by honorable prime minister or in the movie himself last year, where during the inauguration of the first assembly of the International solar Alliance, he himself mentioned that India is working on the national storage mission and government is focusing on the demand creation as well as indigenous manufacturing and innovation for energy storage. Now, this brings us to One of the biggest policy announcements which will lie here shortly, where Indian Government is about to launch a very ambitious Giga scale battery manufacturing initiative, where Indian Government is targeting at least 50 gigawatt our of cell manufacturing by 2024 under this and the reason for this is one is all of us here in India and policymakers have realized that this batteries is going to be the next big market. Over the last 20 years India has missed number of times the manufacturing opportunities beat in terms of semiconductor manufacturing laptops, cell phones or solar panels. But in terms of this next opportunity coming up, Indian government would like to have at least some
manufacturing in India, right now in terms of areas like solar or semiconductors, India imports more than 95 97% sent off the evaluation from other countries, whereas here India would like to get at least 20 25% local land. So, and this is also very important from the National Energy Security point and that’s where we as a industry Alliance are very confident that this time government will step up with their promises. And if industry also agrees to that, we can have a robust ecosystem for both r&d as well as manufacturing of energy storage in India and next four years. So, to end our just like to give a small plug for India energy storage Alliance, which was created in 2012 by customized energy solutions is a could be your gateway for understanding energy storage and you markets in India is a has grown from this five members, which launched the alliance in 2012 to over 94 members. So here are the members which comprise of battery manufacturers, our electronic companies, companies working on EV and EV charging infrastructure, companies in ward in transmission distribution utilities, research and development agencies. So we have a very wide ecosystem of members for GSA. And also they come from why geography, majority of the members do have presence in India. So around 65 plus members have presence in India. But we have representation from US, Europe, as well as APAC region, who are actively part participating in various is activities. So with that, I would like to hand it back to Berlin, and I’ll be happy to take any questions. You can type those in the question and answer box. And after this presentation, both of us we can answer them jointly.
Excellent. Thank you very much for hola thank you very much for this very interesting presentation and the context as well. I would ask you please to stop sharing your screen so that we can ask Aditya to prepare his And it’s been really interesting. We already have a few questions we’ll get to them, you know, after they both them. And I also have my own questions, you know, the whole about numbers and costs. You know, this is like a little bit of a light to ask, you know, just put in the fine detail on things. But, again, if you can, please remember to unmute your microphone and keep sending the questions guys. Just use the q&a box. Okay, we’ll get to them at the end. Okay, I can see the screens fine. You ready to go?
Thanks. Thanks for that great introduction about the market. And I can only second whatever all I said and India is a very dynamic market. And one thing which is very important, and the biggest driver in the Indian market is the commitment by the government, which is now taking shape. The market is started picking up wine. I’ll take a stab back and you know, just briefly talk about as what we’ve been doing and then I’ll talk about our daily project. So quickly, so yes, we are a global power company headquartered in the US, Arlington, Virginia. And we are basically operators of large grid connected power plants. We are close to 32,000 megawatts and another 5000 megawatts under construction. We have been in India for quite some time now, since 1992. Primarily, we’ve been on the generation side but globally we are into both generation and distribution of energies
coming straight away to storage,
storage, you know, I will take some time here and just briefly talk about what is batteries from Origin what is that we are going to talk about here battery storage is nothing but you know, on a great scale we are using batteries they along with ancillary infrastructure to perform some grid management services as a ESV broadly defined divide it into three categories which is network related generation related and uses related and network is the in optimizing the transmission and distribution network. When it comes to a generation we have you know we look at how we can manage the frequency, how we can manage the peak in countries where they have spinning reserves, we can enhance generation there. When it comes to usage we have you know Black Star and the GR retreads and deviation settlement which is very specific to India. What cuts across is renewable integration and micro grids as routes. Because these are much wider applications and they cut across the network, the generation and the usage as well. As has been working on storage since early 2000. We build our first energy storage project a two megawatt system way back in 2007. And since then we have built more than 500 megawatts of the latest one is the project in Delhi, which is what I’m going to talk about more. So, the 10 megawatt 10 megawatt one hour system and this project has been developed at a power station owned by Tata power, which is a distribution company in Delhi. Tata power Delhi distribution company owns part of the distribution system and network in Delhi. They’re serving a load of around 2000 megawatts this project has been jointly developed by a Vishy the technology that we have used is provided by a fluent fluent is a company which is been to RT owned by us and Siemens. YA he is develop its own technological grid scale technological advances over the last decade, Siemens had their own solution. So, in early 2018 as and Siemens joined hand and form a company called Fluence and now the technology is prohibited by alias and Siemens they house in this company. And they are more like a product company as continues to be a developer. So we build own and operate these assets throw into the solution provider. This project has been under discussion for long but we actually broke the ground in April 2018. And it took just about 10 months to complete. And why 10 months because, you know, it was house in a building, wherein we started from ground, we’re building the base for the building and then the actual battery installation was done just a couple of months. been inaugurated the project in March 2019. And it has since then been in operation. So, when we were actually looking at this project, right, we had certain issues, we are billing discussion with Tata power, they being an operator of the system. They identified certain challenges that they were facing. The whole idea of this project was to see that you know whether we can actually help start up our deli and design of the solution was built around these parameters which is managing sustained deviation penalty, disposal of surplus power, power quality issues. peak load management capex difference. This is more for the transmission system and the frequency management. I’ll talk a little bit in detail about all of those applications that we’re trying to showcase here. Typically, as Rahul also mentioned, there is a deviation certain mechanism in India, wherein did the system operators the developers have to work collectively to maintain the
whatever forecast they’ve given.
In India, it is quite unpredictable. And all the system operators the utilities face a tough time and actually managing it and sticking to the forecast that has been given In case they don’t follow the forecast the huge penalties data power has been facing lot of those challenges. One of the application and which has been mostly used until now by that about has been to manage this deviation settlement. The way it works is, you know, as for the guidelines there, they are supposed to follow the forecast. And then there is a bandwidth given to them for a deviation in terms of hours case it is 38 megawatts. So this is always a percentage of the total area that they’re serving for the capacity that they’re serving. For them that 38 megawatt is the deviation that they are allowed the penalties even higher, so the penalties decided every time they breach that 31 megawatt deviation and the penalties quite high. When the deviation is coupled with the frequency. So in this case, what we are actually, what you see the arrows here, the charging the upward arrows of charging and downward for discharging, what happens is where this is, the red lines are where they’re supposed to actually go down or go up. The best system has been helping them in managing these deviations every time they’re reaching the capacity. The 10 megawatt energy system is always online, it is helping them in a warning those violations. This has been so far successful data power has been able to have some savings by deploying this best asset
coming to the next.
This is a very typical challenge. So Danny has extreme weathers. We have Very hot summers and very cold winters and in between we have like you know, very sultry weather. So, if you look at Delhi as a whole right that between summers and winters the gap between the peak demand is as high as 1500 Mike ordinary talking about daily not just part of our daily. So, you can see the curves they vary a lot It is it makes their job very difficult as I said, just similar to the DSM. They have to fork they have to tire for powerful changes, there’s always a deviation and at times they are they have excess power, sometimes they have less power. So in order to manage that, they are using this asset to bridge those gaps wherein you know, whenever there’s an access the use this asset to charge the system and when they are in deficit They actually use the energy which is available. By doing this they are actually awarding using the energy in this part market. So, when they are actually there in deficit, they end up buying expensive power from spot. They have been able to award some of those expenses here. One another great application which is very typical to all the distribution companies. It’s the reactive power because of all these fluctuations, there’s a deviation in the reactive power on the grid. And the regulator’s also has a penalty for every time that comes. The distribution company doesn’t balance the reactive power. So when we say batteries and a destroyed, pilot can provide power it also provides you with reactive power are both active and reactive power. So what we are seeing here is a graph of typically what data power has been the amount of penalties that they’ve been spent being paid the last three years. It is 1.3, crows 2.2 crows. And last year it was 5.4 growth. This year Tata power is now using this best asset to manage some of those reactive power issues. And the way the system works is default 10 megawatt capacity can be actually used as reactive power so that 10 megawatt of reactive power can be actually injected onto the grid. And so it’s not just energy, it is both active and reactive power that can be managed. That’s another application which data power is testing in this acid. The results are elevated and we’ll share some experiences in future Another use case that Tata power did identify in this case was this system has been deployed at the substation they have two transformers and typically the loads each transformer has a separate load and separate segment to cater to many times it does happen that one of the Transformers gets overloaded because of the market segment it is serving we have identified that energy storage can actually help in better managing that those transformers and splitting the load. So, that you know when whenever a portable Transformers overloaded that power can be actually taken out and use it for the best and accordingly you know putting it back whenever needed.
These are the key applications which data power is testing
for this asset in Delhi, but, and I’m coming to the frequency which is the very basic application that battery based and when I say batteries, lithium ion battery bays are very good at which is managing the frequency. While frequency is not so critical for Tata power because they don’t get penalized for it. But if the free if they’re able to manage the frequency as well, they will be able to manage the penalties which is associated because of the frequency variation. And what I’m showing you here right now is this Delhi asset is actually on the grid. And this is now this is connected in India as upon single grid. It’s a very large grid, and it actually responds to the frequency. So, what I’m showing you here is an instance from third April which was just after inauguration of this asset. They didn’t there was a huge sag in the frequency and you can see the frequency started at 130 At around 130, the frequencies started dropping from 15 49.95 hertz, it went down, down, down and it went all the way down to 49.7. And what you can see is the best acid which was collected online, it was an automated mode, every time there was a deviation, the frequency, the acid was actually trying to respond to the frequency and it was doing that instantaneously. What we are trying to prove here is batteries are fast and they can you respond instantaneously. Because this is a very small asset. It’s just 10 megawatt on a huge credit. It was not actually showing any results to the frequency, but had it been sufficient capacity on the grid. This issue would have not been there and the batteries would have been able to address it at the very beginning and we would have had a much flatter frequency another Which is very important to note that this instance lasted from 132 all the way up to four, which is like three and two and a half hours more than two and a half hours. And while it is said that you know we have ancillary services available in the market, and which should be able to manage the grid, but it did not happen, and the result is in front of you a frequency deviation which lasted four hours onto the grid. The point that I’m trying to make here is batteries can do this job much efficiently. And while we have other services to be supplemented, batteries can take precedence.
With that I would like to stop and
go back to my the land
Sure, thank you very much again. And thank you very much for stopping sharing right away. So most of you have realized the rules been like this and it’s been answer a lot of your questions. You’ve done a great job. So why don’t you start telling us basically what people are asking and, you know, get into their reply because I’ve seen that you’ve gotten through a lot of them. Just as you give us a little bit of context on what people are asking you is a lot about technology, right?
We got here Yes, yes. Okay.
Yeah, sure. So, yeah, there are some questions in terms of what other technology is being used in India particularly within the latest battery chemistry where again as since in India, there are a number of different applications. So we have seen people still using flooded lead acid batteries, but also for a number of commercial industrial applications that we are LA Auto vault regulated lead acid batteries are being used for some of the solar applications where people are Now trying to use batteries more often people are also going for your type of batteries such as the jail batteries which can provide better life. And also recently we have seen most of the existing leadership battery companies also trying to explore opportunities in advance lead acid batteries, where people are looking at different applications such as red carpet or bipolar batteries. And these are mainly done for improving either the see rate which is a charge discharge rate, because typically a lead acid battery is meant to be charged over 10 hours period. Whereas people are looking at batteries which can be charging two hours or less. So that’s one of the goals for advanced lead acid batteries. But these are the again some of the applications where lithium ion batteries are now very well suited. Traditionally, people who are worried about the price point of the lithium ion batteries but as a DJ can elaborate actually to the prices have come down by more than almost eight to nine x in last 10 years so maybe I’ll hand it over to a bit there to maybe talk about some the price reduction for lithium ion batteries.
Gone. Aditya is living through the hard questions, you know?
Sorry we can hear you. Can you just unmute
your microphone, please? Yeah, I have
to just show I’ll just put it up front, which I’m sure sure sure. Go ahead you must have seen in the past, but just to reiterate sorry for the screen.
Yeah. So I think this is the just to second to what has been saying. This is a report which was published by BNEF. And this clearly shows the decline in the battery prices. We completely second that because we have been there in the industry trying to build assets were in the battery process. And now they are young they are now in the range of somewhere around 202 This is a curve which is actually the battery basically lithium ion batteries are actually following our senses This is very likely to follow this price and may go even further down given that the way the battery demand of batteries is going up. Well this specifically talks about lithium ion the whole you can help me in answering that within lithium and there are a lot of other technologies which have been coming up my senses and this is purely you know, coming from our previous experiences that lithium ion batteries is going to be there in the market for now. Given that they have already reached to a stable market, there is a sufficient the supply chain which is being developed. So lithium mine will the model and continue there is enough supply and we expect the prices to follow this curve.
Sure, yeah, I agree with it. So, there are also question about particularly in terms of the environmental issues or we should be considering some of the newer battery chemistry which are still under development and I agree with Aditya that as a India energy storage lands our expectation is that both later certainly C’mon batteries will continue to dominate the industry for next at least 10 years. Because both of them have now built a huge amount of manufacturing capacity there is a sufficient supply chain network which is there people are trying to maintain and manage these technologies and depending on the application like if you’re using it for backup applications, emergency applications then lead acid battery still are do meet the needs. Even lead acid batteries are used as a starter batteries. For all the vehicles not just for me, so, leadership batteries are number of applications where they will continue to be seen, but all the emerging applications such as electric vehicles renewable integrations, we are seeing a very strong preference for lithium ion batteries within lithium ion batteries there are different type of chemistry is like nickel cobalt Almunia, nickel manganese, cobalt, lithium iron phosphate, lithium titanate oxide. So, depending on the application different chemistry is can be applied and number of times people focus only on cost but are there are other parameters were also there have been significant improvement particularly in terms of energy density, I think when, as deployed their first energy grid scale energy storage project back in 2008 2009. They had a around 250 kilowatt hour in a 20 foot container. So, around 500 kilowatts In a 40 foot container, it has grown steadily over the last 10 years and now we are seeing projects where people are deploying somewhere between four to six megawatt hour in a 40 foot container. So, that itself as a huge benefit, particularly when you’re looking at Space constrained application such as for distribution utilities, where they want to, they cannot upgrade a distribution transformer and they are seeing a significant growth of the load in certain areas. So, the lot of these type of applications are coming in where one thing I would like to highlight is that always when we see like a cost reduction code, like what does it is shown? People like to say, okay, should I wait for another two years or three years for before deploying my application, but from leaders like ES what they have done? It is probably the every price point what you saw on that cost reduction curve. They’ve actually successfully built projects at those price points and have made money doing that. So, again you need to understand the applications and requirements and choose the right technology size it rightly and then use it smartly.
And just to add to what Raul said, Yes, but it is never the wrong time I would say to invest in batteries, all of our projects in the last decade have been successful. And rather I would say they have been more successful than we actually planned when we actually build those projects. So, it is a misconception that you know, you have to wait for the right time because the way batteries are being used. And we have seen that you know, globally, the cost of providing those services, this will be the cost of batteries have been complimentary. So it should not be seen that you know what the cost of service I’m providing today is expensive, right, because by the time you actually go to the future, you would have already lost a lot of benefits which you would have accumulated during those years. So it is never the wrong time, it is always the right time it is now.
You can’t really wait any longer. I have to point out that of course, all of those projections are based on EV batteries. So, you know slightly is how to know exactly how applicable really this would be to the to the cost of the weapons they will be using. But anyway, we have nine questions, guys, we have about 10 minutes and see if we can get through them in that time. Okay, rapid fire. Okay. One of them. The first question asks you, okay, what kind of battery bank in what capacity and what cost? I think we’ve answered that. So we’re going to move forward, you know, because there is no point really going through the same stuff. There was a question here for you. Never mind. Yeah. You responded to it. Okay. Right that they will move forward from that, guys. I’m glad that we’re moving so quickly. I thought it was here. But as you’ve already responded, the frequency support offered by the valley product is awarded in the form of capacity contract. System rewards is too low to actually Patrick frequency question for you what it is?
Yeah. So this project is currently under no contracts we have not actually the market is not really, that we’re in it is very well accepted as a service contract. So we have the whole idea of this project to actually develop the market for those and develop the framework for those contracts. So currently, we are you know, it’s it’s a service we’re providing to the grid. And the idea is not to really get into a contract at this stage. But to prove that, you know, this really makes sense. Going back to what we were discussing this now, just to clear that misconception that is this the right time. We try to prove the DS This is the right time.
And just to maybe add on that, I think when I think as a country, I think and industry, I think all of us are very grateful to ES for taking this step because while we have been talking about some of these projects and giving examples from projects around the world, it is actually helping some of the policymakers to actually see your project operational land, which where they can visit, and they can easily see that and as has this track record. So again, going back to 2008. When a us build the first project in us, even in us there was no frequency regulation market. In fact, that time we were having debates about should there be a five minute frequency regulation market or should there be a fast pay for performance frequency regulation market, and as understanding the market landscape and how the regulations were going ahead? They actually build the project looking at that, and that was not only project they also found another opportunity in Chile where they actually deployed a project coal plant and as you can go into more detail of that, but this is something where in India we are trying to educate people about is that sometimes people think that oh we already have a coal plant. So, why should we invest in a battery, but actually by integrating these sort of newer technologies, even in the existing projects, we can actually operate the entire system in a more efficient way. And ES has already shown the report this and we are hoping that the project which as as built in India, that would be just a starting point for a lot more codecs built in years to come.
So don’t wait that’s the message don’t wait start your battery products now. Alright, the next question, is there an open frequency respond? Respond to market in India? How does the DSO procure what are the length of contracts in WordPress the prices?
So right now there is no open market although central electricity Regulatory Commission has already provided a roadmap for procurement of ancillary services, they are already started procuring what is called as a fast fast tertiary services where they are procuring spinning results from some of the conventional resources, the fight what we as India energy storage Alliance and other industry players are having with the regulators is somehow there right now limiting participation in providing the services only to existing thermal and hydro generators, and they are not actually opening up this opportunity to storage, thinking that it is going to cost a lot more. Whereas, what we are trying to convince them is that everywhere around the world, wherever they have had deployed such projects, it is not that they had to do this project just for storage as a separate category. But storage has actually competed with existing technologies and how emerged as a lower cost solution or better solution for providing the same services. So, that’s something we already uniting the exploded, we hope will show the benefit of using storage and not just waiting for upgrading coal plants are increasing their flexibility to try to solve the grid problems, we just need less than two gigawatt of resources at a national level to improve grid frequency in India. Right now, the grid frequency in India fluctuates as they showed on one of the charts from almost from 49.85 to 50.05. So, point two hertz frequency deviation which is almost criminal in this day and age, if we are trying to build a strong manufacturing ecosystem, we have to have better power, quality and reliability available to the customers for incentivizing manufacturing and doing it for to go or even let NTPC or other farmer plants compete and if storage can provide it in a better way than let storage be otherwise. We need to actually solve this problem quickly.
I completely agree with what Paul said You know, it is, every in every market we serve, we have always competed against every other technology. And we are quite confident that you know, providing the right support. battery storage can actually provide you much faster and much cheaper rate. So there’s there’s no doubt and we have quite a number.
Okay, we’re not
going to have time for all the questions. We have five of them we’re going to try for two. They are the state of government out of their state of government tenders for solar and storage projects. At the moment, I didn’t think so, right.
tenders which are already there. And you know, you can actually take it on online they are they are on the solar energy cooperation website. They are two live tenders currently. These last two, we know this, so,
market has been quite positive about it. So, in fact, so far there are more Then 10 tenders, which are therefore wearing capacity of it, and in fact, as a India energy storage lines, we maintain a dashboard of all the open tenders available and provide that information to the members. Unfortunately, that is available only for the members. But yes, there are a lot of opportunities there. There are some larger possibilities and like I mentioned, where they’re looking at 1200 megawatts of wind solar hybrid with up to 400 megawatt hour of storage. So it is currently under exploration of interest. But there are multiple other projects waiting from a couple of megawatt or 200 megawatt hour which are also currently in different stages of RFP.
Excellent. And our last question, I’d like to go with the question about the business models because I think it’s important you know, the revenue stacking, so, it says, was the Delhi project finance to as a ES own spam own funded Did you think the financial model for battery storage was The next decade is going to be in what financial products are more desirable for developers in industry wide open? I don’t know who wants to start. Maybe you started it. And then
yeah, I’ll start. So yes, the project has been completely funded by Yes. I would say it’s been partly funded by us and partly by Mitsubishi. The financial model for best for next decade is you know, we are a developer, right? We don’t see it any different from any in the typical project. The challenge that we’re facing right now, which is very difficult to finances, and that’s another reason why, you know, we, in every market we go, we try to do a project first by our own because the challenge with the regulators, the policymakers is similar to what the finances see it. They don’t want to take the risk on the technology. But yes, we are seeing acceptance of the technology globally. We very recently we have now close to You know, getting some financing for standalone best projects, but I feel, you know, for solar plus storage or any renewable plus storage project, this will become a component into the overall project. And they’re, they’re getting financing is easier. But he has the financial products asked him to be developed for this kind of technology. And which will only happen with the deployment. So it’s like a chicken and egg. You know, unless you see really see projects coming up. The finances will not be very keen to take a challenge, but now that that that paradigm is changing now, and we are already seeing large projects, there’s, there’s an there’s a lot of interest from the developers, the development finance, corporations, they are taking a lot of interest. They’re supporting the initial stage wherein these projects are being funded by those funds. And once I am Very confident once raised a stranger to me nothing different but from a normal project finance.
And just to add up the Indiana historical answer we have been also working with saw the international funding agencies such as World Bank and climate investment fund. Both of them have dedicated financing initiatives specially for financing energy storage in developing countries. And in fact, World Bank is also working very closely with Indian Government where they already announced a $1 billion financing package for financing energy storage in India. The details of it are currently getting worked out, but it could be done perhaps somewhat similar way how some of these earlier wideband funding was used to support rooftop solar. So there are a lot of exciting things happening. We are seeing a lot of interest strongly when private equity and other players who want to get involved in the Energy Storage financing sector. So, some of these business models are getting refined and some of them may be slightly unique for India. But a lot of the things innovation on the business model which has happened around the world from like Sophie SMS or what rely on others, is very much applicable to India. So we don’t need to reinvent everything or need to wait for doing something completely new. We can actually use some of the existing models and structures and apply those in India as well.
Wow. 1 billion is specifically for India with the World Bank, which is separate from the SP that they have
sort of 3,000,000,001 billion is getting allocated for India. And also there is some additional separate money which is also being made available for providing conditional financing for the manufacturing plants which are expected to come in under the Giga factory mission. So again, some of these details are still getting worked out. I am gets in the tech $4 billion, but Flipboard me it’s on the last will will go
celebrate. Excellent. Okay, great news. Okay, that’s really interesting. Thank you very much. Thank you very much for your time, you know, we’ve run out of the time allocated. Thank you very much for all our audience. And you know, we will be close, we will keeping a close eye on this and hopefully we’ll be able to talk again in a few months to see how everything has evolved. So thank you very much, both of you. Thank you very much to the audience and see you next time. Thanks.
Thanks. Bye bye. Thank you.
Transcribed by https://otter.ai
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