In­dia opens mar­ket for so­lar bat­tery mak­ers such as Tesla

The Pak Banker - - 6BUSINESS -

In­dia plans for the first time to in­clude en­ergy stor­age as a re­quire­ment when a so­lar pro­ject is ten­dered this month, open­ing what could be­come a sig­nif­i­cant new mar­ket to bat­tery mak­ers such as Tesla Mo­tors Inc., Sam­sung SDI Co. and Pana­sonic Corp.

The state-owned So­lar En­ergy Corp. of In­dia, which is re­spon­si­ble for im­ple­ment­ing the govern­ment's green tar­gets, will ask bid­ders to in­clude a stor­age com­po­nent in 100 megawatts of the 750 megawatts of so­lar ca­pac­ity ten­dered in the south­ern state of Andhra Pradesh, man­ag­ing di­rec­tor Ashvini Ku­mar said in an in­ter­view.

The in­ten­tion of the pi­lot pro­gramme is to re­duce fluc­tu­a­tions in elec­tric­ity sup­ply in or­der to make pos­si­ble the trans­fer of clean en­ergy be­tween states. Prime Min­is­ter Naren­dra Modi has set a goal of 175 gi­gawatts of clean en­ergy by 2022. The Andhra Pradesh pro­ject in­clude 15 min­utes of stor­age each for two so­lar in­stal­la­tions.

Ware­hous­ing power is con­sid­ered a cru­cial com­po­nent of In­dia's green tar­gets. The re­quire­ment, if more broadly adopted, has the po­ten­tial to in­vig­o­rate the stor­age mar­ket be­cause of In­dia's out­sized am­bi­tions for the in­dus­try. It would give man­u­fac­tur­ers the scale they need to help bring down costs of bat­tery stor­age that are hold­ing back wider adop­tion.

"Once re­new­able ca­pac­ity is large enough to start be­com­ing a ma­jor prob­lem for the grid, stor­age will come in a big way," said Anish De, a part­ner for in­fra­struc­ture and govern­ment ser­vices at con­sult­ing firm KPMG.

Global bat­tery mak­ers are op­ti­mistic about the projects they can put to­gether in In­dia.

Tesla sees an "ex­cit­ing mar­ket op­por­tu­nity" that it looks to ex­pand in 2016, the Palo Alto-based com­pany said in its third-quar­ter share­holder let­ter last year.

Sam­sung SDI "is cur­rently eval­u­at­ing busi­ness op­por­tu­ni­ties for pho­to­voltaic plus en­ergy stor­age ap­pli­ca­tions, along with the mi­cro-grid projects in or­der to sup­ply eco-friendly en­ergy in re­mote ar­eas," it said in an email re­sponse.

Pana­sonic is pre­par­ing suit­able prod­ucts for In­dia, said Hiren Pravin Shah, head of the en­ergy busi­ness at the com­pany's lo­cal arm.

By 2020, about 11.3 gi­gawatts of en­ergy stor­age will be in­stalled glob­ally, equiv­a­lent to less than one per­cent of the to­tal in­stalled ca­pac­ity of in­ter­mit­tent re­new­ables, ac­cord­ing to data from Bloomberg New En­ergy Fi­nance.

Much of the cur­rent fo­cus on en­ergy stor­age is in the US, Korea and Ja­pan, said Lo­gan Goldie-Scot, an en­ergy stor­age an­a­lyst at Lon­don-based BNEF.

"Re­cent ac­tions in the In­dian mar­ket sug­gest that both the govern­ment and the pri­vate sec­tor are ea­ger to take ad­van­tage of re­cent cost re­duc­tions and per­for­mance im­prove­ments across the space," Goldie-Scott said.

The en­ergy stor­age mar­ket in Aus­tralia is fore­cast to dou­ble each year through 2018 as homes turn to the tech­nol­ogy amid in­creas­ing elec­tric­ity prices, ac­cord­ing to a re­port last month from the in­dus­try re­searcher IHS Inc.

At the same time, the re­new­able en­ergy in­dus­try in In­dia is con­cerned that the high cost of stor­age would make projects too ex­pen­sive to de­velop, tip­ping the bal­ance to­ward fos­sil fu­els.

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