Energy storage: Generating global interest

Energy storage solutions, whether applied to the power grid or EVs, make systems more flexible and are suitable for meeting low cost, low carbon electricity demands. Following is a glimpse into the energy storage development and deployment scenario around the world, put together by Team ETN.

Energy Storage has been around since a long time, if you consider pumped-storage hydro (PSH) power as a form of energy storage. In fact, as of 2018, PSH accounted for almost 95 percent of the energy storage capacity in the US. In India, PHS is ideally suited to play a leading role in the country’s ambitious plans for new lowcost, domestic renewable energy.

The Indian government’s initiatives look promising in this regard, like the recently amended ‘hybrid wind-solar with storage’ policy that states that any form of storage – not just batteries – could be used in hybrid projects, including PHS, compressed air and flywheels. Last year, India’s Ministry of Power proposed electricity rule changes to incentivize electricity supply at times of peak demand, that supports the cause of storage projects.

Storage to balance increasing RE input

The increasing share of intermittent RE sources like solar and wind in conventional energy mix, will make balancing the system more difficult. Now, since the RE resources function only during certain time of the day, having both traditional as well as renewable systems running simultaneously does not make much sense. The purpose of the RE integration is to reduce fossil fuel generated electricity. Here, using energy storage becomes imperative to be able to provide stable, uninterrupted power supply at all times.

Use of energy storage makes the complexity of a power grid more flexible, and also makes efficient use of electricity. There are typically three types of storage projects: behind-the-meter (BTM) commercial applications, utility-scale battery storage that replaces gas peaker plants, and storage systems deployed at large solar PV or wind generation facilities. Solar or wind projects coupled with affordable battery storage seem to work as well as traditional coal-fired electricity generation, in dispatching power to the grid whenever required.

Li-ion favoured storage technology

In battery storage, Li-ion is the fastgrowing technology that, according to research analysts, is expected to account for 85 percent of newly installed energy capacity in the world, with annual growth expected to reach more than 28GW by 2028. Batteries are also effectively used in electric vehicles. The push towards e-mobility to reduce harmful tailpipe emissions, has seen the growth of batteries for EVs world over.

China, Europe and the US are leading markets for EVs, which is essentially the driver for growth of batteries in the power sector. Countries that lead in battery manufacturing include China (over 60 percent) followed by the US, Korea, Europe and Japan (less than 10 percent each).

Overall, energy storage improves grid flexibility, reliability, and resiliency. It stabilizes power quality and reduces RE limitations; and end-users experience reliable, quality and low-cost power benefits.

Analysts like Navigant Research estimate that energy storage will be a $50 billion global industry in the next few years, with an installed capacity of over 21GW.

Europe, Russia, UK, Middle East and North Africa (MENA)

EUROPE Europe is investing billions of dollars into research in an attempt to overturn Asia’s dominance of the battery market. In 2019, the European Commission approved €3.2 billion of State funding under its ‘important project of common European interest’ (IPCEI) rules. The investment will support battery research and innovation across Belgium, Finland, France, Germany, Italy, Poland, and Sweden.

From 2020 to 2024, Europe aims the installation of at least 6GW of renewable hydrogen electrolyzers in the European Union, and the production of up to one million tons of renewable hydrogen. Then from 2025 to 2030, hydrogen will become an intrinsic part of the EU’s integrated energy system, with at least 40GW of renewable hydrogen electrolyzers and the production of up to ten million tons of renewable hydrogen in the EU. Finally, from 2030 to 2050, renewable hydrogen technologies should reach maturity and be deployed on a large scale across all hard-to-decarbonize sectors.

Europe's energy storage capacity across all segments is projected to grow from 3GW (exclusive of pumped hydro) to 26GW in 2030 and 89GW by 2040.

RUSSIA Energy storage is a top priority for everyone active in RE, and Russia is no exception. The Kremlin has plans to derive 4.5 percent of electricity from renewable sources by 2024, which means 5.5GW of renewables capacity and ESS to offset the intermittency of wind and solar energy generation.

The combined effect of today’s low-cost electricity generation via photovoltaic modules, water, and

wind turbines and similarly lowcost storage in Li-ion battery and solar hydrogen obtained via water electrolysis will have a profound impact on Russia’s energy and automotive industries. In early June, Russia issued its Energy Strategy to 2035, which brings attention to the development of hydrogen energy.

UNITED KINGDOM Energy storage capacity is snowballing in the UK. Around 33 percent of UK’s electricity came from renewable sources in 2019. That figure is increasing as new solar and wind farms come online. Large battery storage stations will allow for the storage of electricity during peak generation times and its release when supply levels drop.

UK Battery Storage Project Database report discloses that approximately 300MW of utilityscale battery storage was deployed in 2019, bringing cumulative installations to over 900 MW at the end of last year. The UK government has announced that it will relax planning legislation, to make it easier to construct large batteries to store renewable energy from solar and wind farms across the country.

MENA Region Though long considered for their fossil fuel reserves, the countries of MENA are fast establishing themselves as global producers of clean, renewable energy. As the use of RE grows in scale in the future, demand for energy storage as a method of alleviating wind and solar generation in the grid will increase.

Battery storage systems are already being deployed at multiple levels of the electricity value chain in the MENA region, including at the transmission, distribution, and consumer levels. Energy storage deployment in emerging markets is expected to increase by over 40 percent each year until 2025

UAE Major renewable energy projects are still underway and on track in the UAE including the major Al Dhafra Solar Plant in Abu Dhabi and the Mohammed bin Rashid Al Maktoum Solar Park in Dubai. Saudi Arabia is said to have 60 renewables projects in the pipeline, which are intended to generate 9.5GW of electricity a year from renewable sources by 2023.

AFRICA Energy storage technologies are viewed as a potential game-changer for the widespread adoption of RE generation throughout Africa. They have the unique ability to provide a buffer between supply and demand, enabling energy systems to rebalance during and after a disturbance. Moreover, storage can charge and discharge energy as required on-demand, making it a key piece of the stable energy infrastructure needed to improve grid reliability and security in Africa. The continent is rapidly moving to harness the potential of RE.

RE will be at the heart of any significant energy transformation in Africa, bringing the economic and environmental potential to the continent’s consumers and communities. Energy storage and flexible power plants will be their key enablers.

India and SAARC countries

Energy storage is emerging as a necessity in all the South Asian nations with renewable energy capacities being rapidly scaled up, costs of solar PV and wind-based power are dropping significantly, and RE price parity with fossil fuel power is challenging the operational philosophy of the grid.

Countries in SAARC have taken a multi-pronged approach to energy storage through policy intervention in key focus areas such as RE integration, faster adoption of EVs, improving reliability of rural microgrids and efficiently meeting the energy needs of smart cities.

According to the India Energy Storage Alliance (IESA) report, the total annual MWh addition in 2018 hit 24.4GWh and is expected to grow to 64.5GWh by 2026. IESA estimates the market for energy storage would grow to over 300GWh during 2018-25.

INDIA The government of India has set a target of installing 175GW of renewable energy capacity by the year 2022 - penetration of RE in the grid necessitates energy storage systems for grid balancing. Further, the Ministry of New and Renewable Energy has indicated that it is considering all future renewable tenders with inclusion of energy storage.

Some notable developments India in the BESS segment include India’s first grid-scale battery storage system commissioned in early 2019 by the Tata Power Delhi Distribution with a 10MW advanced energy storage array jointly built by Mitsubishi and AES. The project is designed for peak load management. More recently, the electricity department of Andaman and Nicobar administration confirmed the commissioning of a 20MW solar power project integrated with 8MWh battery energy storage system - India’s first largest utilityscale BESS system till date - L&T was awarded the contract by Neyveli Lignite Corporation (NLC) India.

In March 2019, the National Mission for Transformative Mobility with Phased Manufacturing Program for Li-ion battery manufacturing was launched in India by the NITI Aayog. India is also focusing on domestic manufacturing for all types of energy storage technologies including advanced lead-acid, thermal storage and ultra-capacitors apart from Li-ion batteries. Ministry of Science and Technology is also keen to accelerate domestic R&D capabilities to support this growing industry through Mission Innovation.

In May 2020, as a part of the selfreliant India (Atmanirbhar Bharat) initiative, the government recognized advanced cell battery storage as a ‘champion sector’. The government is planning to invest around $4 billion to set up Tesla-style giga factories for battery production with the emphasis of the scheme being on promoting cell manufacturing in India and reducing reliance on the import of battery cells. These large factories would be set up with a total capacity of 50GWh, over 10 years.

BANGLADESH The estimated installed capacity in Bangladesh for battery storage has been estimated 200MW of

deep-cycle lead-acid type. A policy has been implemented wherein it is the battery providers that are responsible for the end-oflife recycling of the batteries. This has resulted in a very significant incentive for battery manufacturers to create higher quality storage batteries and develop local supply chains, giving way to higher sustainability of storage.

BHUTAN Bhutan currently has an ambitious electrification program aiming to achieve 100 percent electrification of the country by 2020. Bhutan’s extensive hydropower potential has been mapped at 30,000MW, of which nearly 80 percent is deemed feasible from a techno-economic perspective.

MALDIVES Given its unique geographical location Maldives does not have access to conventional energy like fossil fuels and hydropower, etc. Its energy needs are met primarily though import of fossil fuels. This situation makes energy security a priority for Maldives. It also puts the country at a greater risk and exposure to the market prices in the world energy market.

The situation in Maldives makes it a potential area for storage application. Together with the natural renewable sources, storage can make a significant impact and help reduce the country’s overall energy import costs.

NEPAL Nepal faces a power deficit problem, in addition to installed capacity issues, that is intensified due to the seasonal nature of the hydroelectric power in the country. During the winter season when the river flows dry up, the power output of the predominantly hydroelectric power system of Nepal falls leading to seasonal load-shedding of up to 12 hours. Storage has been playing a role in the hydroelectric sector, in the context that close to 14 percent of the installed capacity in the power sector is ‘dam-storage’, which essentially allows for storage that can be used in later seasons when water dries up. SRI LANKA The power sector entities in Sri Lanka have limited ability to generate new investments in the generation, transmission and distribution areas, due to insufficient cost recovery mechanisms through the tariffs. The need for demand side management is very significant here, with a nearly 40 percent difference between the peak and off-peak demands of the country. This provides a potential for electricity storage to bridge this gap and level off the peak.

Sri Lanka is also one of the few SAARC countries that has exhibited an active interest in storage. From a policy perspective, the country’s plans were to have up to 20 percent penetration of renewable energy by 2020, and a very ambitious long-term plan to increase this to a 100 percent.

USA, Canada, Brazil and Latin America

Large-scale battery storage systems are increasingly being used across the power grid in the United States and Canada. By the end of 2018, 869MW of power capacity, representing 1,236MWh of energy capacity of large-scale battery storage was in operation in the US. In Canada, the operational ESS capacity was about 202MW as on June 2019. The operational projects combined with proposed ESS projects, account for approximately 4,500MW of ESS capacity projected across the country.

Energy storage is in the early stages of deployment in most parts of Latin America. As the penetration of RE increases in the power mix, and the region diversifies its sources of power generation; the role of batteries in smoothing out intermittent energy generation and in mitigating the costs of peak demand is bound to grow.

Policymakers and several private entities in the region are already preparing for the rise of battery storage with pilot projects and by developing an enabling policy framework.

UNITED STATES OF AMERICA In February 2018, the Federal Energy Regulatory Commission (FERC) issued a landmark Order 841, directing the regional grid operators to remove barriers to the participation of electric storage resources in the capacity, energy, and ancillary service markets operated by Regional Transmission Organizations (RTO) and Independent System Operators (ISO) (RTO/ISO markets). In December 2018, the New York Public Service Commission approved the most ambitious target for energy storage in the US till date, of 1,500MW by 2025 and a longterm goal of 3,000MW by 2030.

Further, in April 2019, the Energy Storage Tax Incentive and Deployment Act was introduced. Its goal is to extend to batteries and other electric storage systems the same 30 percent federal Investment Tax Credit (ITC) offered to solar PV systems. The Public Utilities Commission of Nevada in March 2020 adopted the goal of 1,000MW energy storage deployment by 2030 making it the sixth US State to set such an energy storage goal. Massachusetts announced the launch of Clean Peak Standards to take effect in June 2020 opening new chapter in grid evolution.

Notable US energy storage projects (ongoing and proposed)

• 176MW and 36MW installed in California and Hawaii respectively • Biggest project contracted in 2018: 300MW/1200MWh

Vistara Moss Landing Energy

Storage plant, for PG&E in

California • New use of residential storage for grid services at Green

Mountain Power in Vermont and Liberty Utilities in New

Hampshire • 545MW of microgrids installed, led by the Southeastern US in deployments • Hurricane disaster recovery efforts spur solar+storage microgrid resilience projects in

Puerto Rico and other areas of the US.

CANADA In March 2019, the Ontario Energy Board (OEB) launched an initiative

to identify ways to support the integration and expansion of distributed energy resources (DER) in Ontario, and in May 2019, Energy Storage Canada (ESC) released their presentation – ‘Maximizing Value and Efficiency for Ratepayers through Energy Storage’.

In January 2019, the Alberta legislature approved the construction and operation of the Canyon Creek Pumped Hydro Energy Storage Project - first hydro project to be approved by the Alberta legislature in 10 years and the first large-scale energy storage project in Alberta. It has a capacity of 75MW and supplies power for up to 37 hours.

Further, the Alberta Utilities Commission in April 2020 approved a solar and battery storage project combining 13.5MW of solar generation with 8 MW / 8 MWh of batteries in a rural area of the province. This will be one of Alberta’s first major solar-plusstorage projects. The Intelligent Feeder Project launched in 2018 in Elmsdale, Nova Scotia, is testing the viability of Tesla batteries (Powerwalls).

BRAZIL Brazil’s latest 10-year energy expansion plan seeks to maintain hydro generation while increasing the share of non-hydro renewables, particularly solar. In 2016, the Brazilian Electricity Regulatory Agency (ANEEL) launched a R&D program for grid-connected energy storage projects, the first generation of which has already been implemented.

In 2018 AES Tietê commissioned the first energy storage project connected to the Brazilian National Interconnected System. Sodium and lithium sulfur battery storage was used first time, after NEC ES and NGK signed deals to deliver projects to an island archipelago in Brazil in July 2018. In a line-up of trial deployments of battery storage in the region, Engie tested novel zinc batteries from Eos Energy Storage ‘to their operational limit’ in 2017, while in 2018 another novel battery tech, a 50kW/400kWh test unit of ESS Inc’s ‘all-iron’ flow battery was also introduced in the State of Goiás, Brazil. LATIN AMERICA According to World Economic Forum, energy storage will affect the entire electricity value chain across Latin America as it replaces peaking plans, alters future transmission and distribution investments, reduces intermittency of renewables, restructures power markets and helps to digitize the electricity ecosystem.

In Mexico, General Electric announced plans to develop five energy storage projects that will help integrate solar and wind projects into the grid. In the Dominican Republic, two 10MW arrays of batteries, were installed by AES Dominicana in August 2017, which helped the country’s grid remain operational when Hurricane Irma struck a few weeks later. In June 2020, Chilean government awarded development rights for 11 utilityscale renewables projects in the country, totaling more than 2.6GW. Renewables heavyweights including EDF, Engie and Enel won the tender, with projects coming forward with an implied total investment value over $2.5 billion.

Japan, China, South Korea, Australia, New Zealand, Singapore, Indonesia, and Philippines

JAPAN Japan is one of the world’s primary energy and RE markets. It is also the current world leader in smartgrid and energy storage technology. In its Revitalization Strategy, Japan had the specified a goal to capture 50 percent of the global market for storage batteries by 2020.

Today, Japan is widely considered as the biggest market opportunity for new energy innovation. Apart from its future plans for wide-spread implementation of smart-city and smart-grid technology, the country is also making a shift towards a highly-diffuse renewable energy infrastructure.

Stressing on the importance of energy storage in promoting clean energy from renewables, Yoshiro KAKU, Chief Representative (New Delhi Office) of NEDO (New Energy and Industrial Technology Development Organization) said, "Energy Storage – battery, xEVs, and hydrogen - is a game-changer technology that will support the efforts to realize a sustainable energy supply and combat global warming and pollution."

The world's largest energy storage system is slated to be coming up in Japan. It will have a 240-MW output and 720-MWh rated capacity.

CHINA China is set to become the largest energy storage market in the Asia Pacific by 2024. Its cumulative energy storage capacity is expected to skyrocket from 489MW or 843MWh in 2017 to 12.5GW or 32.1GWh in 2024. This signifies an increase in the installed base by 25 times.

According to China’s National Energy Administration, the ancillary services market will transition from a basic compensation mechanism to a market integrated with spot energy prices by 2020. Maturity in technology and ensuing cost reduction, are also key factors that will contribute to the exponential growth in China’s energy storage market through to 2024 (estimated to surpass $6 billion).

SOUTH KOREA South Korea is one of the most developed markets for Energy Storage Systems, with a deployment that accounted for one third of the world’s ESS capacity in 2018 at almost 1GW, as per India Energy Agency (IEA) figures.

ESS installations in South Korea have been increasing steadily since 2015, with a drop seen in 2019 to about 600MW installations. Overcoming this setback, the Ministry of Trade, Industry and Energy (MOTIE) and other bodies of the government have paved the way forward for South Korea to be one of the leaders in the Energy Storage Sector due to the aggressive policies and strong stand in favour of Energy Storage.

AUSTRALIA Australia is set to add 1.2GWh of energy storage capacity in 2020, more than double the 499MWh

installed in 2019 (Wood Mackenzie) – increasing the country’s cumulative storage capacity to 2.7GWh this year.

Adoption of energy storage in Australia is largely driven by funding and incentive programs from the Australian Renewable Energy Agency and State governments. Regions with higher penetration of RE generation have witnessed significantly higher growth in the adoption of energy storage technology in comparison to regions with significant coal or gas generation. The adoption of energy storage has been primarily at the utility and residential levels, as well as for the off-grid commercial sector.

Some landmark projects in the region includes the Hornsdale Power Reserve, the world’s largest operating battery developed by French renewables developer Neoen. It is a 100 MW/129 MWh Tesla big battery project in South Australia. Neoen in April 2020, announced plans to develop another massive battery storage system near Australian city of Geelong that will be more expansive than its largest project in South Australia – a 600MW battery storage facility dubbed as ‘Victoria big battery’. General Electric (GE) also won its largest battery deal so far to support the 200MW Solar River Project in South Australia, that will be combined with a 100MW – 300MWh GE Reservoir grid storage system. The project already is slated to start generating power by 2021.

NEW ZEALAND New Zealand relies on renewable energy for 90 percent of its electricity demand; however, solar PV accounts for 1 percent of the nation’s energy mix with around 97MW of installed capacity and the majority of it has been installed in the past five years.

In August 2018, the first gridscale battery energy storage system in New Zealand was inaugurated. The 1MW / 2MWh of powerpacks connected to existing pumped hydro facilities in South Auckland and used by project owner Mercury’s R&D centre as part of a trial of scalable grid-connected batteries.

In December 2018, in a bid to cut emissions further, NZ made two big announcements: the launching of what is said to be the world’s largest virtual power plant (VPP); and the establishment of a NZ$100 million ($69 million) Green Investment Finance facility. To fulfil the first commitment, the New Zealandbased solar company connected 3,000 residential solar-plus-storage systems to the national grid.

SINGAPORE Singapore, though committed to relying on natural gas for the next 50 years, has announced the target of 200MW of energy storage beyond 2025. This announcement is in line with the vision of having a network of energy storage solutions across the entire island to manage the stability and resilience of the grid, as well as offering peak shaving services.

Singapore lacks geothermal, wind and tidal resources, and therefore the energy storage vision is partly driven by the expected push for solar energy installations in the coming years. The island has had roughly 3,000 grid-connected PV installations over the last decade and has set a goal of 2GW of PV by 2030. Further, Singapore government launched the Accelerating Energy Storage for Singapore (ACCESS) to facilitate ESS adoption by promoting use cases and business models.

This region could also witness a new chapter in the history of green power with the Australia-ASEAN Power Link, which was endorsed in July 2020 by the Australian government. The ambitious renewable energy storage project envisions connecting the world's largest solar farm and battery system in Australia's Northern Territory to Singapore and Indonesia via a 3,700km undersea cable.

INDONESIA Indonesia, though it has a small amount of solar PV at present, has a large solar potential given its tropical location. Reports estimate that less than 1 percent of Indonesian land would be required to produce all of the nation’s electricity using solar PV.

Indonesia has a target of reaching 23 percent of renewables share in primary energy mix by 2025 and 31 percent by 2050. However, it has been struggling to meet the targets with renewables accounting for only 8 percent of primary energy mix in the country. Main factors for stunted growth in the renewables sector have largely been - regulatory and policy uncertainty, market barriers, financing barriers, and undeveloped local renewable industry.

PHILIPPINES In Philippines, the government has started taking into consideration the role of regulators in enabling policy framework and in boosting the adoption of energy storage.

In April 2019, with the view to accommodate energy storage as an enabler for the modernization of its electricity networks, the Philippines Department of Energy (DoE) issued a circular – ‘Providing a framework for energy storage system in the electric power industry’. In October 2019, Philippines power utility Meralco and battery supplier Hitachi installed a 2MW / 2MWh battery energy storage system (BESS) on the country's largest island, Luzon. Claimed to be country’s first grid-scale distribution-connected BESS, the project served as a pilot to help Philippines's largest utility understand and further integrate battery storage technologies.

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