Power sector: Get set for the charge of India's battery brigade

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2 days ago

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Mint Editorial Board With their global prices softening, storage batteries have the potential to disrupt the country's power market, hasten utility reforms, attract entrepreneurs and empower electricity consumers. This has implications for power utilities too. Battery installations should help power utilities improve their green report card and meet their commitment to clean energy. Gift this article
Electricity regulators in Maharashtra and Gujarat recently approved battery projects to be set up by their respective state-owned utilities, marking the adoption of power storage facilities by two large Indian states. Delhi had operationalized one unit a few months ago. These are designed to soak up excess electricity from solar-panel farms for its supply to consumers when the sun doesn't shine.
Electricity regulators in Maharashtra and Gujarat recently approved battery projects to be set up by their respective state-owned utilities, marking the adoption of power storage facilities by two large Indian states. Delhi had operationalized one unit a few months ago. These are designed to soak up excess electricity from solar-panel farms for its supply to consumers when the sun doesn't shine.
With battery prices having dropped globally by 30% over the past year and the Centre aiding its adoption by providing funds to plug viability gaps, these states have been quick to seize what's arguably the fastest way to gain clean supply stability in the face of solar interruptions caused by cloud cover and sunsets. As we go along, battery installations should help power utilities improve their green report card and meet their commitment to clean energy.
However, batteries only store electricity. They do not generate it. As of now, they typically act as stop-gaps for just an hour or two, with their charge rarely lasting beyond the evening's peak demand, let alone overnight. So, even though India's capacity for renewable energy (RE) has been ramped up, its supply remains hostage to the weather, which impacts not just output, but also the ability to charge batteries.
To best populate various states with these units, utilities need to study both consumer demand and weather patterns as they get reshaped by climate change.
This year, for example, India's peak summer demand was lower than last year's, thanks to less intense heat spells and the early onset of monsoon rainfall. Such an approach will improve the ability of batteries to bridge supply gaps during phases of RE intermittency.
This role goes beyond supporting clean energy. They can also plug gaps caused by failures of supply infrastructure, like transformers, assuring us overall reliability. As adoption rises, batteries could help transform an Indian market riddled with tariff distortions. To subsidize households and farms, state-run utilities make commercial users pay more.
The grip of these utilities has been loosened by bulk consumers setting up their own solar farms. But they have still had to rely on utilities in fallow RE periods. Cheaper and better batteries will allow them to explore set-ups that reduce their dependence on utilities in terms of volume and load, both of which reflect in their electricity bills.
Evolving battery technology brightens such prospects. Non-lithium chemistry, like the use of sodium ions, holds out the promise of lower cost combined with superior safety and reliability. Should battery-linked RE facilities mushroom, it may push utilities to reform—not only their tariffs, but also their operations. This could lead to consumers paying for power at rates that reflect costs more closely, which would relieve over-tariffed businesses in need of lower bills to be competitive.
A key measure in this context would be tariffs levied to reflect the real cost of power as it varies around the clock. For these prices to influence demand, users need to know when high or low rates apply. Alas, only around 10% of India's billing meters are digitized, so very few users can look at their billing and shift some usage—say, to charge vehicles or operate a washing machine—to low-rate hours.
If the penetration of smart-meters deepens, dynamic pricing could nudge us all to optimize our electricity use. And friendlier pricing may help utilities retain large customers amid a surge in captive supply led by the charge of our battery brigade. Topics You May Be Interested In Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.