INDIA ENERGY SCENARIOS 2047 DOCUMENTS PREPARED BY ISGF FOR PLANNING COMMISSION

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Table of Contents

Introduction to India Energy Scenarios (IES) 2047 ..........................................................3

T&D Losses and Smart Grids .................................................................................................................................4

1. Context ...................................................................................................................................................................5

2. Drivers ....................................................................................................................................................................5

2.1 Policy Environment in the Country ..................................................................................................5

2.2 Technology Development and other Initiatives .........................................................................6

3. T&D Losses Overview and Assumptions ...............................................................................................7

3.1 Classification of T&D Losses.................................................................................................................7

3.2 Classification of Technical Losses ......................................................................................................7

3.3 Classification of Commercial Losses.................................................................................................8

3.4 Policy Assumptions ..................................................................................................................................8

3.5 Cost Assumption ........................................................................................................................................9

4. T&D Scenarios ................................................................................................................................................. 10

4.1 One Pager ................................................................................................................................................... 10

Carbon Capture and Sequestration (CCS) ...................................................................................................... 12

1. Context ................................................................................................................................................................ 13

2. Drivers: ............................................................................................................................................................... 13

2.1 Factors Influencing CCS in the Country ....................................................................................... 13

3. CCS Overview and Assumptions ............................................................................................................. 14

3.1 Technology Options ............................................................................................................................... 14

3.1.1 Capture ........................................................................................................................... 14

Post Combustion Process ......................................................................................................... 14

Pre Combustion Process .......................................................................................................... 15

Oxy Fuel Combustion System ................................................................................................... 15

3.1.2 Transport ........................................................................................................................ 16

3.1.3 Storage ........................................................................................................................... 16

3.2 Policy Assumptions ............................................................................................................................... 17

3.3 Technology Assumptions.................................................................................................................... 17

2.3.1 Solid Hydrocarbons ......................................................................................................... 17

2.3.2 Gaseous Hydrocarbons.................................................................................................... 17

4. CCS Scenarios ................................................................................................................................................... 18

4.1 Background Information..................................................................................................................... 18

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4.2 One Pager ................................................................................................................................................... 19

Electrical Energy Storage (EES) .......................................................................................................................... 20

1. Context ................................................................................................................................................................ 21

2. Drivers: ............................................................................................................................................................... 22

2.1 Factors Influencing Storage in the Country ............................................................................... 22

3. EES Overview and Assumptions ............................................................................................................. 24

3.1 Technology Assumptions.................................................................................................................... 24

3.1.1 Mechanical ..................................................................................................................... 24

3.1.2 Electro-Chemical ............................................................................................................. 25

3.1.3 Chemical ......................................................................................................................... 25

3.1.4 Electrical ......................................................................................................................... 25

3.1.5 Thermal .......................................................................................................................... 25

3.2 Basic Assumptions ................................................................................................................................. 26

3.3 Cost Assumptions ................................................................................................................................... 26

4. EES Scenarios ................................................................................................................................................... 27

4.1 Background Information..................................................................................................................... 27

4.2 One Pager ................................................................................................................................................... 28

Annexure ................................................................................................................................................................. 30

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Introduction to India Energy Scenarios (IES) 2047

• Planning Commission is modelling energy scenario by putting all relevant

numbers together into a calculator called the India Energy Scenarios (IES) 2047,

for which India Smart Grid Forum (ISGF) is the knowledge partner for following

areas:

1. T&D Losses & Smart Grids

2. Carbon Capture & Sequestration (CCS)

3. Electrical Energy Storage (EES) for base load

The forecasting will have four likely scenarios:

1. Level One is the most pessimistic situation, with business as usual

2. Level Two is slightly less pessimistic and takes into account some

technological improvements

3. Level Three is more optimistic, and considers government policy

intervention towards a better future

4. Level Four is the most optimistic; it is an ideal situation that is drawn from

whatever is physically possible from today

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User guide for

T&D Losses and Smart Grids

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1. Context

Transmission and Distribution (T&D) losses is the percentage of energy lost in the power

grid in the process of transporting from generating station to point of consumption. The

concept of Aggregate Technical & Commercial (AT&C) losses was introduced in India in

past decade. The advantage of the parameter is that it provides a realistic picture of

energy & revenue loss situation at distribution level. While almost all transmission losses

are technical, the AT&C Losses comprise of two elements namely:

Technical Losses

Commercial Losses

High technical losses in the system are primarily due to inadequate investments over the years for system improvement works, which has resulted in unplanned extensions of the distribution lines, overloading of the system elements like transformers and conductors, and lack of adequate reactive power support.

The commercial losses are mainly due to low metering efficiency, theft and pilferages. This may be eliminated by improving metering efficiency, proper energy accounting and auditing and improved billing and collection efficiency. Fixing of accountability of the personnel / feeder managers may help considerably in reduction of AT&C loss.

Level One is the most pessimistic situation, with business as usual. Level Two is slightly

less pessimistic and takes into account some technological improvements. Level Three is

more optimistic, and considers government policy intervention towards a better future.

Level Four is the most optimistic; it is an ideal situation that is drawn from whatever is

physically possible from today.

2. Drivers 2.1 Policy Environment in the Country There are various policy framework in country which support development of new

technologies which will help in reduction of AT&C losses.

Some of the policy framework available in India are:

2.1.1 Electricity Act 2003 (EA 2003)

Electricity act provides various provisions to reduce AT&C losses in the

country. Some of the provisions provided in EA 2003 are as follows:

1. Provides legal frame work for making theft of electricity a

cognizable offence

2. States to set up special courts & special police stations

3. To provide special powers to utility personnel for checking the

installations

4. Regulatory framework provides for franchising of power

distribution related activities in part or full

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2.1.2 IEGC, 2010

India Electricity Grid Code 2010, lays down the rules, guidelines and standards to be

followed by various persons and participants in the system to plan, develop, maintain

and operate the power system, in the most secure, reliable, economic and efficient

manner, while facilitating healthy competition in the generation and supply of

electricity

2.1.3 India Smart Grid Roadmap

Smart Grid Vision & Roadmap for India aims to transform the Indian power sector

into a secure, adaptive, sustainable and digitally enabled ecosystem that provides

reliable and quality energy for all with active participation of stakeholders

2.2 Technology Development and other Initiatives Technology advancement is necessary in order to bring down the AT&C losses, some

of these include:

2.2.1 R-APDRP

GoI has launched the Restructured-Accelerated Power Development and

Reforms Programme (R-APDRP) with the aim to reduce AT&C losses in the

country and to improve the power distribution sector of state utilities, during

11th plan period

R-APDRP Part A: Preparation of base-line data for the project area covering

consumer indexing, asset mapping on GIS maps, automatic metering and data

logging for all distribution transformers and feeders and SCADA / DMS system.

It will also include adoption of IT applications for meter reading, billing & collection;

energy accounting & auditing; MIS; redressal of consumer grievances; establishment

of IT enabled consumer service centres etc

R-APDRP Part B: Renovation, modernization and strengthening of 11 kV level

substations, re-conductoring of lines at 11kV level and below, load bifurcation,

feeder separation, load balancing, HVDS (11kV). Aerial bunched conductoring

in densly populated areas, replacement of electromagnetic energy meters with

tamper proof electronics meters, installation of capacitor banks and mobile

service centres etc. In exceptional cases, where sub-transmission system is

weak, strengthening at 33 kV or 66 kV levels are also being undertaken

2.2.2 Smart Grid Projects

Smart Grid technologies which will help in real time monitoring of power flows

and thereby help in loss reduction can be stated as follows:

SCADA/DMS

AMI (Advanced Metering Infrastructure)

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3. T&D Losses Overview and Assumptions

There are various levels at which losses occur. If T&D losses are assumed to be 33% then

33 units out of 100 units are been lost and this will result in huge revenue losses to the

distribution utilities. T&D Losses can be classified as transmission losses and distribution

losses which is further explained below:

3.1 Classification of T&D Losses

In T&D losses, these technical losses are inherent in a system and can be reduced to an

optimum level. The losses can be further sub grouped depending upon the stage of power

transformation & transmission system as Transmission Losses

(400kV/220kV/132kV/66kV), as distribution losses (33kV and below).

The commercial losses are caused by pilferage, defective meters, and errors in meter

reading and in estimating unmetered supply of energy.

NOTE: Commercial losses are considered only for explanation purpose and are not considered in calculating T&D loss in scenarios as they don’t have any impact on energy input/output

3.2 Classification of Technical Losses

There are many reasons for technical losses but these losses are intrinsic to power

transmission system and all the countries report some percentage of technical losses.

Some of the technical losses considered can be seen in figure 1.

T&D Losses

Transmission Loss

(765 kV - 66 kV)

Distribution Loss (AT&C)

(33 kV and Below)

Technical Loss

Commercial Loss

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Commercial Losses

TheftError in Meter Including

Incorrect Multiplying Factor

Low Metering Efficiency (Burnouts, Overloading,

Meter Reading Error etc.)Billing Errors Faulty Bill Distribution

Figure 2: Commercial Losses

Figure 1: Technical Losses

3.3 Classification of Commercial Losses In case of commercial losses the ideal level should be zero i.e., there should be no

commercial losses. In comparison to technical losses, commercial losses are easy to

identify but not easiest to eliminate. Some of the commercial losses considered can be

seen in figure 2.

3.4 Policy Assumptions Some of the assumptions which were considered while making the scenarios were as follows:

Large rollout of AMI across the country

Promotion and deployment of Microgrids and Distributed Generation

across the country

Proper implementation of R-APDRP in all urban areas and its extension to

smaller town

Importance to Renewable Integration

Development of Smart Grid and Smart Cities

Technical Losses

I2R Losses Transformer LossesInsufficient Reactive

CompensationOther ill Maintained

Equipments

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3.5 Cost Assumption

1. AT&C Losses in 2003-04 (National Level) : 34.78%

2. AT&C Losses in 2010-11 (National Level) : 26.15%

3. Technical Losses (Present at National Level) : 7.00%

For this loss reduction of around 9% (AT&C) investment made in electrical

network were:

A. By Govt. of India:

• APDRP : Rs. 20,000 crore approx.

• R-APDRP : Rs 15,000 crore (approx. value of work executed by

March 13)

Total : Rs. 35,000 crore

B. By States/ Utilities : Rs. 35,000 crore (Assuming similar level of

investment)

Total (A+B) : Rs 70,000 crore (Investment in reducing 9% AT&C losses)

Future Investment Envisaged:

• It is assumed that for next 9% (AT&C) reduction from 26.15% to 17% the

investment will be almost double from 70,000 crore to 1,40,000 crore

• Investment made for reduction from 17% to below 10% will again be

double i.e., 2,80,000 crore

• Equal amount will be required to reduce transmission loss to 3% level

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4. T&D Scenarios

T&D losses for India are one of the highest in the world. With the objective to reduce

distribution losses and strengthen the distribution sector, Ministry of Power and GoI has

launched several programmes such as APDRP, R-APDRP, National Smart Grid Mission etc.

4.1 One Pager

Level 1: Only a marginal improvement in T&D losses is assumed, which is currently at

22.69% on all India basis as of May 2013. Owing to financial losses of distribution utilities,

investments towards strengthening the grid are minimal and hence the reduction in T&D

losses would not be significant and will only reduce to 15.94% till 2047 out of which

distribution losses will be 10.94% and transmission loss will reduce to 5% following

business as usual approach.

Level 2: Although the 14 Smart Grid pilot projects demonstrate the benefits of Smart Grid

technologies at the pilot scale, a pan India large-scale deployment of Smart Grid

technologies is assumed to happen at a relatively low rate. Projecting based on

conservative estimates of leveraging the Smart Grid technologies T&D losses would

reduce to approximately 11% by 2042 and will further reduce to 10% till 2047 out of

which transmission loss will be 4% and distribution loss will be 6% by 2047.

Level 3: It is assumed that the investments are made as envisaged in the India Smart Grid

Roadmap1, towards achieving the stated goals of reduction in losses, demand response

and integration of renewable energy. Building on the success of the pilot projects, various

technologies are leveraged under a clean energy policy drive to achieve a financially

viable and sustainable Smart Grids. The T&D losses would reduce to below 12% by 2027

out of which distribution losses will be 7% and transmission losses will be 5% and would

reach around the global benchmark of 7% by 2047 of which transmission losses will be

3% and distribution losses will be 4%.

Level 4: An aggressive drive is adopted by the dynamic 21st century India, towards

achieving sustainable economic growth, energy independence and energy security.

Reforms in the transmission and distribution sectors are carried out via elimination of

cross-subsidies, innovative and competitive tariff structures, increased private

participation in electricity business, electric vehicles, real-time energy markets, bi-

directional flow of electricity and prosumer enablement. The global benchmark of 7%

T&D losses is achieved by 2042 of which transmission losses will be 3% and distribution

losses will be 4% and maintained thereafter till 2047.

1 http://indiasmartgrid.org/en/Lists/News/Attachments/154/India%20Smart%20Grid%20Forum%20Booklet.pdf

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0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

2007 2012 2017 2022 2027 2032 2037 2042 2047 2052

Level 1 Level 2 Level 3 Level 4

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User guide for

Carbon Capture and Sequestration (CCS)

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Figure 3: Carbon Capture and Sequestration Flow Diagram

1. Context

Carbon Capture and Sequestration (CCS) (or carbon capture and storage), is the process of capturing waste carbon dioxide (CO2) from large point sources, such as fossil fuel power plants, transporting it to a storage site, and depositing it where it will not enter the atmosphere, normally in underground geological formations. The aim is to prevent the release of large quantities of CO2 into the atmosphere (from fossil fuel use in power generation and other industries). It is a potential means of mitigating the contribution of fossil fuel emissions to global warming and ocean acidification. Although CO2 has been injected into geological formations for several decades for various purposes, including enhanced oil recovery, the long term storage of CO2 is a relatively new concept.

Source: IEA

Majority of India’s emissions come from the power sector, and the development of gigawatt scale power plants in recent years means that the large scale concentrated emission sources that are most suitable for CCS deployment are predominantly in the power sector. Hence, CCS deployment in the power sector will have a significant impact on CO2 emission reductions.

CCS is applicable to both the power sector and the industrial sectors, and will therefore play a vital role in the move to a low-carbon economy. In the power sector, fossil-fuel power with CCS is one of the options which has been identified by the UK Government as a major part of the low-carbon energy mix – alongside nuclear and renewables. Countries that develop CCS early will benefit from the export of skills and technology interna-tionally.

2. Drivers: 2.1 Factors Influencing CCS in the Country The factors which influence the development of the CCS in India are:

Climate Change India has a target of 20-25% reduction in carbon intensity by 2025 under NAPCC (National Action Plan for Climate Change). The use of carbon capture and storage (CCS) technologies to mitigate the risk of climate change has received relatively little attention until recent years. They are,

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however, increasingly being proposed as potentially important contributors in global action on climate change.

Energy Security India is endowed with substantial coal reserves and resources and coal will continue to be a major contributor for generation of electricity in India. Higher share of coal based generation in the energy mix would warrant systems for reducing carbon emission.

3. CCS Overview and Assumptions

Some of the assumptions considered for Carbon Capture & Sequestration (CCS) are as

follows:

3.1 Technology Options There are various technologies used to capture, transport and store the carbon, some of

them are assumed below:

3.1.1 Capture 2 The purpose of CO2 capture is to produce a concentrated stream that can be readily transported to a CO2 storage site. CO2 capture and storage is most applicable to large, centralized sources like power plants and large industries. Capture technologies also open the way for large-scale production of low-carbon or carbon-free electricity and fuels for transportation, as well as for small-scale or distributed applications. Technology options for capture can be as follows:

a) Post Combustion Process

b) Pre Combustion Process

c) Oxy fuel Combustion Process

3Post Combustion Process

CO2 can be captured from the exhaust of a combustion process by absorbing it in a

suitable solvent. This is called post-combustion capture. The absorbed CO2 is liberated

from the solvent and is compressed for transportation and storage. Other methods for

separating CO2 include high pressure membrane filtration, adsorption/desorption

processes and cryogenic separation.

2 IPCC Special Report on Carbon Dioxide Capture and Storage 3 http://www.ccsassociation.org/what-is-ccs/capture/post-combustion-capture/

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Figure 4 Post Combustion Scrubbing Technology © Doosan Babcock Energy Limited. Source: www.ccsassociation.org

4Pre Combustion Process

A pre-combustion system involves first converting solid, liquid or gaseous fuel into a mixture of hydrogen and carbon dioxide using one of a number of processes such as ‘gasification’ or ‘reforming’.

Reforming of gas is well-established and already used at scale at refineries and chemical plants around the world. Gasification is widely practiced around the world and is similar in some respects to that used for many years to make town gas.

The hydrogen produced by these processes may be used, not only to fuel our electricity production, but also in the future to power our cars and heat our homes with near zero emissions.

Figure 5 A pre-combustion capture system. Courtesy of Costain Source: www.ccsassociate.org

5Oxy Fuel Combustion System

4 http://www.ccsassociation.org/what-is-ccs/capture/pre-combustion-capture/ 5 http://www.ccsassociation.org/what-is-ccs/capture/oxy-fuel-combustion-systems/

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In the process of oxy-fuel combustion the oxygen required is separated from air prior to combustion and the fuel is combusted in oxygen diluted with recycled flue-gas rather than by air.

This oxygen-rich, nitrogen-free atmosphere results in final flue-gases consisting mainly of CO2 and H2O (water), so producing a more concentrated CO2 stream for easier purification.

Figure 6 oxy-fuel system. Courtesy of Costain Source: www.ccsassociation.org

3.1.2 Transport

Once CO2 is separated and captured as part of CCS, in most cases it must be transported

to a storage area, usually a geologic reservoir. As part of this process, CO2 is compressed

to a dense state ̶ about 150 times atmospheric pressure ̶ to make both transportation and

storage more efficient. This is called a supercritical fluid, where density resembles a

liquid but with qualities that allow it to move and fill a space like gas.

This supercritical CO2 can be transported by:

a) Rail

b) Truck

c) Ship

d) Pipeline

3.1.3 Storage

Various forms have been conceived for permanent storage of CO2. These forms include

gaseous storage in various deep geological formations (including saline formations and

exhausted gas fields), and solid storage by reaction of CO2 with metal oxides to produce

stable carbonates.

a) Deep Saline Aquifers

b) Depleted Oil & Gas Reservoirs

c) Salt Beds

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d) Un-minable Coal Beds

3.2 Policy Assumptions

Some of the basic assumptions which were considered while making the scenarios were as follows:

a) Enhanced support for Research & Development of CCS technology will

develop so as to bring in more efficient technology and reduce the cost

component required.

b) Government will come out with the policies which will mandate the usage of

CCS in various power plants and industries for capturing and storing of CO2

c) Financial support and incentives will be provided by Government so as to

help in deployment of CCS technology.

d) Understanding among the public and stakeholders of CCS technology will be

improved.

e) In future there may be commercial use of the carbon captured that could

offset the cost of the CCS plant and its operation.

3.3 Technology Assumptions

Some of the technical assumptions which were considered for the calculation purpose are

as follows:

2.3.1 Solid Hydrocarbons

a) Efficiency : 30%

b) Load Factor : 70%

c) Emission Factor : 0.95

d) Fuel Split : 90%

e) Input Fuel : Coal

2.3.2 Gaseous Hydrocarbons

a) Efficiency : 42%

b) Load Factor : 70%

c) Emission Factor : 0.47

d) Fuel Split : 10%

e) Input Fuel : Natural Gas

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4. CCS Scenarios

Since, fossil fuel will occupy a major part of energy mix to at least 2052, there is no climate friendly scenario in the long run without CCS. As long as fossil fuels and carbon-intensive industries play dominant roles in our economies, carbon capture and storage (CCS) will remain a critical greenhouse gas reduction solution.

4.1 Background Information

Level 1

This level assumes that there will be no new planned installation with CCS till 2025, and

there after the installation will take place at very slow pace. The technology deployment

rate for CCS will be negligible.

Level 2

It is assumed that India will follow US in CCS with certain time lag. Based on EPRI 2007

data, cumulative addition of coal with CCS in US will be 80 GW in 2030. 6 Installed capacity

of US in 2011 was 1051 GW, 2012 was 1064 GW. Installed capacity of US in 2030 will be

around 1350 GW if calculated through Compounded Annual Growth Rate (CAGR)

method. Considering the data for India in percentage terms with time lag of 20 years,

India will be installing 35 GW of CCS till 2047.

Level 3

This level assumes to follow IEA technology roadmap7, 2013 for CCS (India). According

to IEA roadmap India may install 88 GW till 2050. Considering the same it is assumed that

India will installed capacity of 80 GW of CCS till 2047.

Level 4

This level assumes to follow global vision of IEA for CCS technology. Installed capacity

globally with CCS will be 8% of all power generation capacity globally. Hence in India 8%

of projected coal and gas capacity is considered.

6 http://www.eia.gov/electricity/capacity/ 7 http://www.iea.org/publications/freepublications/publication/TechnologyRoadmapCarbonCaptureandStorage.pdf

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4.2 One Pager

Level 1: No planned generation plants with CCS till 2025 and rate of CCS technology deployment will be less. Generation with CCS usage till 2025 will be negligible and will start to increase but at very less pace due to lack of efficient and cheap technology, generation with CCS usage will increase to 8 GW till 2047. Level 2: Generation with CCS usage will be deployed at a slow rate. India will follow projections for US with some time lag. Generation with CCS in 2022 will be around 1 GW and will reach to 35 GW till 2047.

Level 3: The amount of CCS-equipped capacity will grow in India. The absolute growth rate in capture-equipped capacity occurs between 2030 and 2040. Going by IEA roadmap for CCS technology 2013, India will target generation capacity with CCS of 3 GW till 2022 and will increase to 80 GW till 2047.

Level 4: More generation plants with CCS technology will be deployed which will be result of technology up gradation and reduction in capital requirement. India will begin constructing their own demonstration scale facilities and considering more ambitious CCS projects. India will target generation capacity with CCS of 5 GW till 2022 and will increase to 90 GW till 2047.

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2007 2012 2017 2022 2027 2032 2037 2042 2047

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User guide for

Electrical Energy Storage (EES)

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1. Context

Rapid growth of grid connected renewable generation resources, there is a need for

storage applications to address the issues of variability, intermittency, unpredictability

and location dependency of renewable energy sources.

Large-scale storage facilities can arbitrage base load generation by storing electricity during non-peak hours and providing power in long-duration discharges and also provide low-cost ancillary services such as load following and spinning reserves. Large scale energy storage helps on both the supply and demand side of the wholesale generation market. Although they do help offset the need for additional peaking capacity, large-scale storage facilities are focused more as system optimizers rather than generation replacement. 8Electricity storage is a three-step process that consists of withdrawing electricity from the grid, storing it and returning it at a later stage. It consists of two dimensions: the power capacity of the charging and discharging phases, which defines the ability of the storage system to withdraw or inject electricity instantaneously from or into the grid; and the energy capacity of the storing phase, which measures how much energy can be stored and for how long. As a consequence, electricity storage has very different uses, depending on the combination of the power rating and discharge time of a device, its location within the grid and its response time.

9Globally Energy Storage Technologies are expected to play a crucial role in shifting to large scale renewable energy. They can help manage the problems of fluctuating generation and regulating generation to match demand. All major economies have specialized focus on this area. Mckinsey has identified storage technologies as one of the 12 most important technologies for future. India’s energy systems face multiple challenges such as

Constrained transmission and distribution capacity Large unmet energy demand Low energy access in rural areas Continuing dependence on coal based generation adding rigidity to the system.

India has aggressive targets for shifting to renewable energy, which at present is un-scheduled, and stresses the energy systems. One of the important means to meet these challenges is use of energy storage technologies. With launch of Smart Grids and Electric Vehicles missions, and new programs for on-site solar energy and rural micro-grids, energy storage has become a crucial component of energy strategy for India.

8 Electricity Storage by SBC Energy Institute 9 Report on “Assessment of role of energy storage technologies for renewable energy development in India” by PACE D

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Energy storage provides several benefits such as

Time shift Grid stabilization Peak shaving of demand Improved generation efficiency Reduction in carbon emissions Improved transmission capacity utilization etc.

10Other applications for electrical energy storage systems such as

Market Price arbitrage Reserves Frequency regulation Other ancillary services

System Renewable integration System capacity

Distribution – Investment deferral Transmission – Voltage compensation End-User – Power reliability

These application are shown in annexures by their installed capacity in 2013. These benefits and applications, when modelled for various stakeholders and applications, can guide the creation of appropriate policy, regulation and business models.

2. Drivers: 2.1 Factors Influencing Storage in the Country The factors which influence the development of the energy storage technologies in India are:

Renewable Integration One of the main drivers of energy storage in India is increasing share of grid connected renewable energy resources. India has a huge potential for wind energy and solar energy. With the installation of these infirm renewable energy resources the challenges of their grid integration emerges. Fluctuations and unpredictability of these resources will lead to increased adaption of energy storage for base load.

Demand and Supply Gap

India being power deficit country experiences both with energy deficit and peak deficit. Energy storage can play huge role in meeting the demand and

10 Bloomberg New Energy Finance

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supply gap as during peak periods when electricity consumption is higher than average, storage could complement the base-load power plants (such as coal-fired and nuclear). During the off-peak period when less electricity is consumed, costly types of generation can be stopped. This is a chance for owners of Electrical Energy Storage System (EESS) to store energy. From the utilities’ viewpoint there is a huge potential to reduce total generation costs by eliminating the costlier methods, through storage of electricity generated by low-cost power plants during the night being reinserted into the power grid during peak periods. With high PV and wind penetration in some regions, cost-free surplus energy is sometimes available. This surplus can be stored in EES and used to reduce generation costs. Conversely, from the consumers’ point of view, EES can lower electricity costs since it can store electricity bought at low off-peak prices and they can use it during peak periods in the place of expensive power. Consumers who charge batteries during off-peak hours may also sell the electricity to utilities or to other consumers during peak hours.

Microgrids

Microgrids will play an important role in solving energy problems in India. Microgrid can operate in parallel or in island position to utility power grid. They can meet growing demand of the particular set of consumers whether it is connected through grid or operating in off grid position.

Microgrids along with storage will allow for fast installation of electricity supply without the need for expensive transmission infrastructure investments and the lengthy development approval and construction process.

Electric Vehicles Electric vehicles require storage technology for them to operate. Electric vehicles can also act as virtual power plants and can help in supplying power to the grid during peak hours and can charge during off peak hours.

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3. EES Overview and Assumptions

Some of the assumptions considered for Electrical Energy Storage (EES) are as follows:

3.1 Technology Assumptions There are various technologies used for electrical energy storage, some of them are

assumed below:

Figure 7: Electrical Energy Storage Technologies Source: IEC

3.1.1 Mechanical

a. Pumped Hydro Storage

Conventionally, two water reservoirs at different elevations are used to pump

water during off peak hours from the lower to the upper reservoir (charging) and

the water flows back to move a turbine and generate electricity (discharging)

when required. Their long lifetimes and stability are what makes them ideal

storage systems. However technical and commercial issues have prevented their

large scale adoption.

b. Compressed Air Energy Storage (CAES)

This technology is based on the conventional gas turbines and stores energy by

compressing air in an underground storage cavern. Electricity is used to compress

air and when needed the compressed air is mixed with natural gas, burned and

expanded in a modified gas turbine.

c. Flywheel

Rotational energy is stored in a large rotational cylinder where the energy is

maintained by keeping its speed constant. When the speed is increased higher

amounts of energy are stored. A vacuum chamber is used to reduce friction, and

the rotors are made of carbon fibre composites suspended by magnetic bearings.

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Flywheels are extensively used for space applications. Latest generation flywheels

are reported to be suitable for grid applications.

3.1.2 Electro-Chemical

a. Batteries

Different technologies can and will co-exist in battery technologies. However all of

them need to mature to higher efficiencies and capacities. The various battery

technologies available are:

i. NaS (Sodium Sulphur Batteries)

ii. LIB (Lithium Ion Bromide)

iii. Lead Acid

iv. Vanadium Redox flow batteries

3.1.3 Chemical

a. Fuel Cell

A fuel cell is a device that converts the chemical energy from a fuel into electricity

through a chemical reaction with oxygen or another oxidizing agent. Fuel cells are

different from batteries in that they require a constant source of fuel and

oxygen/air to sustain the chemical reaction, they can however produce electricity

continually for as long as these inputs are supplied.

3.1.4 Electrical

a. Double Layer Capacitor

An electric double-layer capacitor, or super capacitor, is capable of charging and

storing energy at an exponentially higher density than standard capacitors. Super

capacitors stop charging when their capacity limit is reached, eliminating the need

for detection units to prevent overcharging.

b. Super Conducting Magnetic Coil

Very much in its infancy stage, it has a superconducting coil and a cryogenically

cooled refrigeration system that once charged stores the energy in the magnetic

field created in the coil for an indefinite period of time. 1MWh systems used for

grid applications, 20 MWh systems than can provide 40MW for 30 mins or 10MW

for 2 hrs are under development.

3.1.5 Thermal

Systems use cold water, hot water or ice storage to store the heat and use for later.

The efficiencies vary with the material. They are important for integrating large

scale renewable energy as concentrated solar thermal technology can be used as

a reliable and despatchable source of energy to balance the supply and demand.

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3.2 Basic Assumptions Some of the basic assumptions which were considered while making the scenarios were as follows:

a. Development of low cost and efficient batteries and other energy storage

technologies to mature in 5-10 years.

b. Commercialization for batteries and other technologies in 10 – 20 years

c. Development of Ancillary Services market offering regulation services in 5 – 10

years

d. Promotion of microgrids all across the Country in 5 – 10 years

e. Large roll out of Electric Vehicles (EV) by 2020

f. Continuous focus on renewable generation and integration to grid

3.3 Cost Assumptions Some of the cost assumptions which were considered for the calculation purpose are as

follows:

a. Capital Cost : As per IRENA (International Renewable Energy

Agency), 2012 (Varies for different technologies)

b. Operational Cost : As per IRENA, 2012 (Varies for different

technologies)

c. Escalation : No escalation is considered in operating cost

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4. EES Scenarios

The main driving force for grid connected storage systems in the Indian power sector, is the increasing share of renewable energy which require storage to handle the supply variability. India will keep on facing power shortage as demand is increasing at much faster rate compared to supply. A hybrid solution of storage and renewable can help India in solving the problem.

4.1 Background Information

Level 1

It is assumed that with limited investments in research and development of low cost and

efficient battery technologies, the cost of batteries remain high resulting in less

commercialization, poor adoption of battery storage. Hence there is not much installation

of electrical energy storage.

Level 2

It is assumed that V2G (Vehicle to Grid) technologies will be maturing to offer storage

solutions as large fleet of connected EV’s (Electrical Vehicle’s) will operate in VPP (Virtual

Power Plant) mode. More share of pumped storage will be developed. Various storage

technologies on pilot basis will be employed in test beds at various parts in India. Storage

technology will emerge but not at a desired pace.

Level 3

It is assumed that partnership between India and other countries for smart grids and

energy storage technologies will emerge and brings out some new and low cost batteries

with higher performance parameters. Application of energy storage batteries on both the

utility side and customer side (industrial and commercial) of the meter.

Level 4

It is assumed that there will be opportunities for partnering with world class manufacturing and system integration companies that can leverage domestic manufacturing capabilities.

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4.2 One Pager Level 1: Renewable share in total energy mix in India is 12% of total installed capacity as on May, 2013 and renewable energy capacity is expected to increase to 49 GW by 2022 and 91 GW by 2047. With limited investments in research and development of low cost and efficient battery technologies, the cost of batteries remain high resulting in less commercialization, poor adoption of battery storage. Pumped storage hydro power continues to dominate the energy storage in India. Total grid connected storage in India will be 5GW by 2022 of which pump hydro storage is just above 4 GW growing to 8GW by 2032 and 10GW by 2042 and 12GW by 2047.

Level 2: Renewable share in total energy mix in India is expected to increase to 77 GW by 2022 and 466 GW by 2047. V2G (Vehicle to Grid) technologies will be maturing to offer storage solutions as large fleet of connected EV’s (Electrical Vehicle’s) will operate in VPP (Virtual Power Plant) mode. More share of pump storage will be developed. Various storage technologies on pilot basis will be employed in test beds at various parts of India. Hybrid solution of solar and batteries will be employed. Though the development of storage market will be in rising trend but it will be at slower pace. Total grid connected storage in India will be 10GW by 2022, growing to 15GW by 2032, 20GW by 2042 and 22GW by 2047.

Level 3: Renewable share in total energy mix in India is expected to increase to 91 GW by 2022 and 817 GW by 2047. In addition to new technologies envisaged for level 2, partnership between India and other countries for smart grids and energy storage technologies will emerge and brings out some new and low cost batteries with higher performance parameters. Application of energy storage batteries on both the utility side and customer side (industrial and commercial) of the meter. Wind farms uses CAES (compresses air energy storage) for storage of energy during off peak hours, solar panel uses molten salt batteries for storage of energy during their off peak hours. Opportunities for new project development and manufacturing emerges in India. Telecom sector will also take a lead in replacing their diesel generators with hybrid solution of solar and batteries. Total grid connected storage in India will be 15GW by 2022, 25GW by 2032, 30GW by 2042 and 32GW by 2047.

Level 4: Renewable share in total energy mix in India is expected to increase to 120 GW by 2022 and 1402 GW by 2047. India will attain its potential of 20 GW by 2020. As per India Smart Grid roadmap, micro grids will be implemented in 10,000 villages and 100 smart cities till 2027, batteries will play a major role in these deployment. Wind mills will be integrated with hydro pump storage systems to operate them. Flywheel technology for energy storage will become mature with time and will be cost effective which will ultimately lead to more commercialization of this technology. There will be opportunities for partnering with world class manufacturing and system integration companies that can leverage domestic manufacturing capabilities. Total grid connected storage in India will be 20GW by 2022, growing to 30GW by 2032, 40GW by 2042 and 45GW by 2047.

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0

5

10

15

20

25

30

35

40

45

50

2007 2012 2017 2022 2027 2032 2037 2042 2047

Sto

rage

Cap

acit

y (G

W)

Year

Level 1 Level 2 Level 3 Level 4

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Annexure

Bloomberg Data on Storage

1. Top 9 applications by total capacity. Projects considered here are either:

a. Commissioned

b. Financing Secured/under construction

c. Announced/planning began

d. Partially commissioned

e. Permitted

Source: Bloomberg New Energy Finance

0

250

500

750

1000

1250

1500

(GW

)

Storage Applications

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2. Energy Storage annual market forecast (2013 – 2030)

Source: Bloomberg New Energy Finance

0.2 0.7

3.7 4.4

6.27.6

11.3

18.1

20.621.6

23.524.9

26.627.3

28.730.1

31.532.9

0

5

10

15

20

25

30

35

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Gro

wth

(%)

Year