Council on Energy, Environment and Water Integrated | International | Independent
Battery energy storage systems (BESS) allow for energy storage in batteries for later use. India has committed to achieve 50 per cent of installed capacity from non-fossil-fuel-based sources by 2030. While planning for the increase in the share of renewable energy (RE) in the energy mix, it is critical to consider the impact of the intermittent nature of RE and its impact on the grid. Having BESS along with RE ensures that excess power generated is stored and used later, thus making RE reliable and mitigating the impact of its intermittent nature. Odisha should plan for RE along with BESS to ensure grid stability, reduced curtailment of RE, etc.
At the national level, various initiatives have been undertaken to ensure BESS deployment. These include the publishing of the National Framework for the Promotion of Energy Storage Systems 2023, which clearly identifies quantum of need for BESS and provides viability gap funding of 40 per cent, guidelines for competitive bidding for renewable and BESS projects, BESS obligation targets for states, etc. At the state level, apart from highlighting the importance of BESS in the RE policy, GRIDCO put out a tender for 500 MW of Energy Storage Capacity in March’24, connected to the Central Transmission or state transmission utility (Singh 2024). This notes covers the deployment of BESS and battery manufacturing required for BESS deployment.
Jobs overview
● If Odisha deploys BESS in proportion to the Energy Storage Obligation of 4 per cent by 2030, it would generate employment for approximately 16,000 people in 2030 for activities across business development, design, construction, commissioning and O&M. Business development includes activities such as DPR preparation, viability assessment, etc. The design stage includes battery sizing and configuration, BoS, etc. Construction and commissioning includes installation, testing, completing grid connections, etc. and O&M includes maintenance of battery and HVAC system, electrical wiring, etc (Tyagi et al. 2022).
● If Odisha attracts manufacturers to supply batteries to BESS requirement as per the required Energy Store Obligation (ESO), approximately 200 jobs would be created in battery manufacturing. These jobs would cover R&D, testing, engineering, production, product engineering, maintenance, marketing & sales and services.
● The total employment in BESS would be approximately 16,000 FTE.
Market opportunity
● Total annual revenue in 2030 is estimated to be $42 Million (Assuming $3.3 kWh, Deorah et al. 2020).
● For battery manufacturing, the total investment required would be $60 million (based on estimates adapted from Warrior et al. 2023). The market opportunity in 2030 would be $60 million assuming the price of batteries to be $80 per Kwh (Bloomberg NEF, 2023).
● The total market opportunity is INR 600 crore (USD 80 million).
Investment opportunity
● The total investment required to deploy BESS including manufacturing of batteries required is approximately INR 4000 crore (USD 500 million).
1. Through the use of BESS, the intermittency and variability of renewable power is solved by ensuring backup of power for use during non-generating hours, thus enabling and accelerating the deployment of RE to reach targets. Similarly, RE that would have been curtailed (when power generated is limited) would now be stored and used later, thus reducing curtailment.
2. During peak hours, reliance on coal can be reduced and energy stored in batteries can be relied upon, thus ensuring lower greenhouse gas emissions from the power sector as a whole.
3. Benefits to DISCOMs and customers:
a. Peak shaving/valley filling: By lowering the power usage from the grid through reliance on stored power in batteries, BESS systems help in peak shaving. Supplying power from BESS during peak times when the power purchase costs are high results in lower tariffs for end consumers. Charging the BESS during low load duration flattens the load curve, thus aiding in load shifting or valley filling.
b. Distribution Transformer (DT) Augmentation deferral - DTs are overloaded only for a few instances due to seasonality of load, while during other times of the year they remain underutilised. By using BESS, investments in upgrading transformers and other ancillary infrastructure of the distribution system can be deferred.
c. Benefits to consumers: BESS can release the system congestion by supporting the DT during peak hours, thus avoiding outages and providing better reliability and quality power to consumers.
Tata AutoComp Gotion Green Energy Solutions Pvt. Ltd. in 2023 inaugurated a 9 GWh BESS manufacturing plant spread over 22,227 sq. feet in Pune. With the move towards electric vehicles and renewable energy, Tata Comp partnered with Chinese battery manufacturer Gotion to set up li-ion energy storage manufacturing (Colthorpe, 2023). The joint venture would target EV as well as BESS markets. Through partnerships with organisations such as ISRO, CSIR-CECRI, CMET, the company is working to strengthen R&D capabilities in activities, cells and recycling (Tata Chemicals).
1. Role of departments:
a. GRIDCO/Department of Energy (DoE): GRIDO may include BESS in grid planning keeping in mind national and regional plans and identify the need for BESS co-located with renewable projects, near load centres or integrated with transmission centres. DoE may actively push for safety standards from the Bureau of Indian Standards in order to ensure the deployment of BESS as per the climatic conditions in India.
b. Odisha Skills Development Authority (OSDA): Hiring of skilled manpower is a major barrier in scaling up. While some companies conduct in-house training, OSDA may facilitate courses on current skills shortages, especially in battery manufacturing. OSDA may work closely with the private sector to develop curriculum and with universities to develop centres of excellence in technologies critical to the transition such as batteries.
c. Industries Department: For battery manufacturers, the key reasons for choosing states/locations to set up their plants include business continuity, ease of transportation and doing business and business climate. While ‘green manufacturing’ is a thrust sector, the government may seek to provide ‘plug and play’ facilities to battery manufacturers. For example, the government of Telangana has set up 1,80,000 sq. ft. of ready-to-occupy built-up space for battery manufacturing. Further, the government aims to set up 5 lakh sq. ft (solely government) and an additional 10 lakh sq. ft (in Public Private Partnership model) of plug-and-play space (Department of IT, Electronics and Communication, Telangana).
d. MSME department: MSME department may build awareness and market Odisha as a manufacturing destination along with the Industries Department. The MSME department may also develop programmes to support demonstration of technologies and assist in scaling from lab to market.
e. Science and Technology Department (S&T): The S&T department along with manufacturers may tie up with international and regional R&D centres working on improving processes and innovations in battery technologies.
2. Role of the private sector: The private sector plays a central role in designing, engineering, procuring materials, deployment and O&M of BESS plants. In battery manufacturing, the private sector may work towards strengthening domestic manufacturing of cells in India. Cell chemistries apart from lithium ion such as sodium ion need to be prototyped and eventually commercialised in the long run. The private sector may invest in R&D to make these existing and new cell chemistries cost effective and commercial (Walawalkar 2022).
3. Role of local administration and civil society organisations (CSOs): CSOs may facilitate discussions between various stakeholders, especially regional, national and international research organisations or companies investing heavily in R&D in the sectors.
1. High upfront costs: The average prices for lithium-ion battery packs across various sectors have surged to $151/kWh, marking a 7 per cent increase from 2022 (Bloomberg NEF 2023). Presently, the Levelised Cost of Storage (LCoS) in India varies from approximately Rs 7 ($0.08)/kWh to Rs 8 ($0.09)/kWh (Mercom 2023). Currently, basic custom duty levied is 5 per cent, GST is at 28 per cent on lithium-ion batteries, adding to the cost and making it a barrier to entry.
With the National Framework on Energy Storage Systems, a viability gap funding of 40 per cent of the cost, along with provisions such as allowing developers to offer market-based products, the financial and commercial viability will have greatly improved in the coming years. To supplement this, Odisha should plan to include BESS in grid planning along with other support in ancillary services, signalling and reassuring developers about the active role and seriousness of the state.
2. Dependency on imports for input material and cost fluctuations: The price of batteries fluctuates as commodity prices fluctuate, making manufacturers vulnerable to volatility in markets. Minerals required in batteries are found in countries such as Australia, China and Chile (Tyagi et al. 2023), making imports 12-60 per cent of the battery value chain (Warrior et al. 2023).
Material innovations in battery technologies such as replacement of critical minerals wherever possible may diversify the supply chain (CEEW 2023). Similarly, by recycling and reusing end-of-life products, dependence on imports and the need to mine new minerals may reduce (Warrior et al. 2023).
3. Safety standards tailored to climatic conditions in India: India has adopted standards from the Underwriters Laboratory and the International Electrotechnical Commission along with supplemental standards by Bureau of Indian Standards on battery management systems, electric energy storage and secondary cell and non-acid batteries (Indian Energy Storage Association 2022). There is a lack of technical and safety standards specifically for tropical climates.
The Odisha government may spearhead efforts to institutionalise safety standards for BESS such as ensuring humidity free systems during summers, and other typical weather conditions seen in different parts of Odisha and India.
1. Environment risk: Post use, batteries and their improper disposal pose environment risks. Apart from the Battery Waste Management Rules 2022, various ministries such as Power and MoEFCC may come together to provide guidelines on second use of batteries and to ensure proper implementation of the Battery Waste Management Rules.
The scope of this value chain is limited to the following:
1. battery manufacturing (battery pack assembly).
2. the deployment of BESS including business development, design and pre-construction, construction and commissioning and operations and maintenance (O&M).
Jobs estimation:
Employment figures have been calculated using coefficients from Tyagi et al. 2023. The coefficients used are developed from a case study of a 10 MW/10 mWH plant.
Employment is simply as per the following formula:
Full time Equivalent per unit = Total number of people employed in a full-time basis /
Annual Capacity of facilit
Where,
People employed on a full time baisi = No of people employed in the activity * Duration of the activity (days) /
Total working day
Table 1 Coefficients across various activities in BESS deployment
Source: Tyagi et al. 2023
Trajectory of energy consumption has been obtained from CEA 2022, Page 35. The energy storage obligation for the state is as per Ministry of Power notification mandating 4 per cent storage of total energy consumption. The proportion of BESS required has been calculated using projection from the National Framework for Energy Storage Systems 2023. BESS and PSH are calculated to be 69 per cent and 31 per cent respectively. After proportion of BESS of the total ESO is calculated, the mWh deployment of BESS has been calculated assuming a 90 per cent depth of discharge for 2024 to 2030 (as a similar assumption taken by CEA, 2023, Pg. 10) and a round trip efficiency of 0.85 (Warrior 2023). The total BESS requirement is taken to be 4,717 MWh.
Table 2 Steps used in calculating BESS requirement
Total employment is the jobs in business development, design, construction and commissioning and O&M.
Table 3 Total jobs in BESS deployment
To calculate the proportion of BESS and Pumped Storage Hydropower in the ESS obligation, projections from the National Framework for Energy Storage Systems 2023 were used. Since two data points – one for 2027 and one for 2030 were provided, to estimate the BESS share in ESO between 2027 – 2030, a linear growth is assumed.
Table 4 Proportion of BESS in ESO till 2027
Table 5 Proportion of BESS in ESO in 2030
To calculate the tariff for BESS or yearly revenues from operating a BESS plant, the estimates of tariff added from Deorah et al. 2020, Page 19, Figure 8 have been used.
Investment estimates for a BESS plant (in $/kWh) from Deorah et al. 2020, Page 16, Table 9 have been used to calculate the investment required in Odisha.
Employment coefficient
The employment coefficient is derived based on a survey with key players in battery manufacturing. A total of 3 players were interviewed, of which data from two were used. These two players represent above 1 GWh of battery manufacturing. Based on the data, the FTE is 0.00027 FTE / kWh.
Market opportunity estimation
It is assumed that to deploy 4717 MWh of BESS by 2030, with capacity additions as calculated in Table 2, an average battery manufacturing capacity of at least 707 MWh would be required. Further, to calculate the dollar value of batteries manufactured in 2030, it is assumed the price of lithium-ion batteries in 2030 would drop to $80/ Kwh. This is based on the global estimated price in 2030 by Bloomberg NEF, 2023.
Investment opportunity estimation
Investment estimates to scale up battery manufacturing in India were used to calculate the investment required per Kwh. Warrior et al., 2023 Pg. 17, estimate that to meet 100 GWH of battery capacity, a total of INR 60,000 cr would be required. Using this, the investment required for 707 MWh was calculated.
Central Electricity Authority (CEA). 2022. Report on Twentieth Electric Power Survey of India. New Delhi: Central Electricity Authority
Colthrope, Andy. 2023. “Tata AutoComp-Gotion JV supplies first BESS units to Tata Power project in Pune, India.” Energy Storage News. 20 November 2023. Accessed April 8, 2024.
https://www.energy-storage.news/tata-autocomp-gotion-jv-supplies-first-b...
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GRIDCO. 2024. Invitation for Tender and Reverse Auction for Procurement of Power through ESS. Bhubaneswar: GRIDCO Limited.
Hazarika , Gautamee . 2023. “Industry Hails Viability Gap Funding for Battery Energy Storage Systems.” Mercom, 11 October .
Ministry of Power . 2022. Energy Storage Systems(ESS) Policies and Guidelines. New Delhi: Ministry of Power.
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Ministry of Power. 2023. National Framework for Promoting Energy Storage Systems . New Delhi: Ministry of Power.
Raja, Rupam, and Sanskriti Dubey. n.d. “Self-Integration trap of Battery-based Energy Storage Systems and reasons to avoid it.” Fluence India. Accessed April 8, 2024.
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Singh, Mandvi, Ritwik Ray Chaaudhari, and Arpo Mukherjee . 2023. Odisha Renewable Energy Potentail Reassessment - Focus on Solar, Wind and Biomass. New Delhi: I-Forest.
Singh, Arshreet. 2024. “GRIDCO Invites Bids for 2.5 mwh of Energy Storage Capacity ,”Mercom, March 26, 2024. https://www.mercomindia.com/gridco-bids-energy-storage-capacity
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Tyagi, Akanksha, and Deepak Rai, Arvind Poswal, Charu Lata, Sameer Kwatra, and Praveen Saxena Akanksha Golchha. 2022. India's Expanding Clean Energy Workforce 2022 Update. Council on Energy, Environment and Water, Natural Resources Defense Council, and Skill Council for Green Jobs.
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Energy transition
Battery Energy Storage Systems 
Public Charging Stations for Electric Vehicles
Electric Vehicle and Battery Manufacturing 
Biomass to Power
Green Hydrogen and Electrolyser Manufacturing
Rooftop Solar
Floating Solar Photovoltaic (FSPV)
Solar Mini/Micro Grid
Pumped Storage Hydropower (PSH)
Renewable Energy Equipment Manufacturing
Small Hydropower (SHP)
Utility-Scale Solar Deployment
Wind Deployment
Decentralised Renewable Energy (DRE) Technologies for Livelihoods