(This story was originally published in . on 17th April 2022)
India is setting up a first of its kind standalone renewable battery power bank, which envisages an investment of Rs 2,000 crore to provide green energy on tap for discoms and grid operators during peak demand, but with lithium prices rising. The surge — a key component to making batteries — and supply chain disruptions caused by the Russia-Ukraine conflict could weigh on the industry’s response.
According to a tender issued by SECI (formerly Solar Energy Corporation of India Ltd), the government body that implements India’s solar and wind power plans, earlier this week, the project will produce 500MW, or 1,000MWh (mega) for two hours. storage capacity to supply watt hour), the Ministry of Renewable Energy said in a statement on Saturday.
Discoms can rent the storage capacity, which will be charged using renewable energy, and power will be obtained to manage peak demand. The project is to be located around the Fatehgarh-III substation of the interstate transmission system in Rajasthan. The project will be set up on a build-own-operate basis, with the developer responsible for connectivity and obtaining necessary permissions. The land will be provided by the Central Transmission Utility on the basis of right of use. The developer has to provide storage capacity for two operating cycles per day or for two complete charge-discharge cycles in a day.
SECI will acquire 60% of the capacity for third-party leasing, while 30% will be earmarked by northern and national grid operators for their ancillary services. But industry representatives said the project’s success would depend on feasibility gap funding from the Centre, especially since a 500% increase in lithium prices has made batteries expensive and would make electricity tariffs unviable for entities leasing capacity. .
But the ministry statement said the project is aimed at providing assistance to develop a market in the energy storage sector. Currently, India is considered a low priority market by global battery makers, who are focusing on the US and Europe which are focused on storage-based renewable energy projects.
However, industry representatives said the timing may not be ideal due to the uncertain geopolitical situation in Eastern Europe, which has affected global trade and pushed up commodity prices.
The government has set a target of 4,000MWh of battery storage capacity as part of a plan to increase access to renewable energy in the national grid. The Central Electricity Authority’s report on the optimum generation capacity mix envisages a battery storage capacity of 27,000MW, or 108,000MWh – essentially four hours of storage, by 2029-30.
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