All In For Battery Based Energy Storage- Saurabh Kumar, GEAPP

For India’s energy sector, the impact Saurabh Kumar has been well documented. Currently, the Vice President-India, GEAPP (Global Energy Alliance for People and Planet) Kumar is well known for being the man behind the LED revolution in the country, which he initiated during his stints as the key founder of the public sector Bureau of Energy Efficiency (BEE), and later, Energy Efficiency Services Limited (EESL). Both the organisations continue to build on his legacy as key players in India’s sustainability push. Now, as the person powering the efforts of GEAPP in India, Saurabh has distilled his vast experience in the energy sector to identify the need for, and role of energy storage for India.  SaurEnergy caught up with Kumar in New Delhi to know more about his view on storage, and GEAPP’s own role in it. For those of you who still don’t know, GEAPP is a global non-profit backed by IKEA Foundation, the Rockefeller Foundation and the Bezos Earth Fund, since joined by global institutions and dozens of partners.

SaurEnergy: First of all, congratulations on the Big Battery approval for Delhi. Will we see pumped storage projects also on your agenda soon?

Saurabh Kumar: Thank you. The 20 MW (40 MWh) project in Delhi is the first big battery to get regulatory approval in India, which means it will be the first to be connected to the grid. It’s a small start, but a vital sign for things to come. I believe till 2030 at least, we should focus on, and look to batteries for energy storage, as pumped storage takes too long to build.

In my personal experience, each PSP will take 6 years or more to develop, with all the associated challenges of land acquisition, costs, and other risks. Battery storage has none of these issues, even as renewable capacity, that will require it, is being added fast.

 

SaurEnergy: But PSP is supposed to provide almost 60% of our storage requirements by 2030…?

Saurabh Kumar: 47 gigawatt is what the storage target is. Not even target. That’s the storage requirement if you were to push 500 gigawatts in the grid. Of which they say 31 GW would come from the pump storage plant now. I’ll tell you why I am a bit skeptical. The first Ministry of Power’s pump storage plant, the Tehri one, was approved when I was in the power ministry. That was 2004. And this, when the Tehri dam was already there. So this was an upstream reservoir where you pump water there, worth 1000 megawatt storage capacity.
But it’s still not done. So I don’t know where the optimism is coming from.

We at GEAPP believe that if India is to reach its target of 500 GW (of fresh renewable capacity by 2030), then the way to go is to use battery storage, not pumped storage.

SaurEnergy: What about the tariffs gap between PSP and battery storage?

Saurabh Kumar: I don’t know what the tariffs being talked about are, but if you aggregate battery demand, then tariffs could get to as low as Rs 4.50(unit) or below 4 even with battery storage. If you want 6 hours of storage as the CEA talks about.  In this case, if your peak demand is 250 MW, you need about 40 to 50 MW and socialise the cost, then the total impact on tariffs will not be more than Rs 2-3. The real impact is significant in terms of displacing traditional fuel powered energy.

Keep in mind that at the retail level, any tariff below Rs 9-10 should be good enough.

SaurEnergy: The Delhi model we talked about, how many battery storage points would we need for a city like Delhi.

Saurabh Kumar: I don’t think anybody has an answer to this question. Let me explain. Batteries can be placed in a grid at three places. One is at generation side, which is what most of these RTC tenders try, one is at the transmission side or at the edge of distribution companies, and then, the distribution point. The greatest benefit of a battery is at the distribution point. Then it can benefit the grid the most. This leads us to what we are trying to do in India. You will be surprised that no discom in India has a load flow analysis. They don’t know which way the load if going, the data is available, but it is never part of a digital system where you are visualising flow. As a result, you can never forecast load by local areas.  What we are doing starting with Rajasthan’s agricultural sector, we are partnering with Google through an AI based software called Tapestry, that essentially converts your electrical network into a google map. Have identities of everything. Right upto the pole, distribution transformer, substations at various levels. You have to collect the data manually from the discoms and put in certain parameters that help visualise the whole network in front of you indicating the question you asked.  Where are batteries needed, where are load centers coming up, where do you need to augment substations. This is the sort of energy planning needed for all discoms to avoid ad hoc planning or reactive planning that we see here. Like CEA estimating power demand based on GDP growth. That is no longer as accurate as it should be. You need proper and real time data now to build the right estimates. In the next six months we should be able to do this for Rajasthan at least for their agricultural network.

Next we want to do this for Maharashtra. Across the state, not just the agricultural sector. Based on multiple pilots, our eventual target is to make an implementable energy transition plan across states.

SaurEnergy: Who pays for all this?

Saurabh Kumar: It’s technical assistance basically. We provide the service through Google free of cost. The discoms don’t have to pay anything. In Maharashtra, we have put together an energy transition plan. Like how to increase renewable energy share from 17% to 51% by 2030. So there is a huge emphasis on decentralisation, combination of utility scale solar, changes needed in transmission infra. Particularly in the agricultural sector.

The opportunity is huge with PM KUSUM. In Rajasthan we have already helped them to issue tenders for over 1 GW in PM KUSUM for C type (grid connected pumps), which will help to solarise agriculture, where land is the simple challenge. So we had to convince regulators not to compare the costs here to utility scale. So land owners needed to be compensated higher than utility scale solar power rates.

SaurEnergy: What is the role of smart metering in all of this?

Saurabh Kumar: If you look at the most distinctive feature in the power sector, almost one  lakh crores has been committed to smart meters by the private sector. Orders have been placed for ten crore smart meters. The cumulative installations are reaching a crore. the logical next step is TOD (Time of day ) metering, and similar demand response measures. As more and more load centres are digitised, responding to these changes would be much more easier. Even the success of the solar rooftop schemes depends on this. How will you manage these distributed power injections otherwise? Its also a safety issue. So a lot of digital work has to happen for utilities to be prepared for more renewables.

SaurEnergy: What are the top three priorities, if we call it that, to ensure all this can happen?

Saurabh Kumar: First and foremost, Digitization and reforms at discoms. Focus on agriculture and decentralised renewables. Look at Bihar where EESL implemented 2 million smart meters. Cash collection increased. While legacy problems have to be sorted out, immediate results are visible on a cash basis. So a much more speedier implementation of smart meters is essential. 2) Decentralized renewables. Focus on agriculture. This is due to the subsidy burden on states being  upwards of Rs 120000 crores. So if you add renewables fast, your subsidy goes down.  3) Storage. If you don’t do the first 2, your counter party risk is very high. As we assessed, there is a gap of 200GW between our ambition of 500 GW and where we’re headed towards. Last year, we added 18GW of RE power which is the highest ever. At this rate, we have a huge gap, that can be filled through decentralised  RE of 150 GW for agriculture. Nine states making up 80% of agriculture wish to reduce their subsidies. Rajasthan has 15 GW, with Maharashtra at 15-17gW. 6 years is a good enough time to install about 200 gigawatts. This is how we can really show to the world that we can do this. Batteries and storage will become absolutely critical.

SaurEnergy: So just what are the biggest challenges to the energy transition, and what is GEAPP doing there?

Saurabh Kumar: Biggest challenge- human capacity, lack of skills. The technical capacity of discoms to do anything is very low. We have set up a non-profit called GRACE (Global Resource Centre for Accelerating Climate Action and Efficiency) which will seek various partners like the ISA . GEAPP is conducting small pilots in various locations. They wish to create this knowledge repository in one institute and work with 10 other states over the next 6 months.

SO GRACE will Identify and design projects. Put that RFP out, help them in managing the entire grid process. For example in Maharashtra we have a list of 130 projects which’ll come up between now and 2030. Mainly aggregated decentralized renewables and transmission projects. Most of the renewable potential for Maharashtra is on the eastern side, with most of the load growth is on the western side. There is no east-west corridor. A large number of smart meter projects have been put out. As we move forward, large scale utility solar will come out. Then you have 40,000 public buses(EVs). All this is being provided with a project management unit sitting with the government, which helps them monitor the project as well. GEAPP wishes to replicate this in other states . A variety of agencies like Mckinsey have been used. GEAPP wishes to let the knowledge reside within themselves. The ISA is keen to replicate this model in at least 5-6 countries outside India as well.

GEAPP has  a list of these projects, for which an estimated 30 billion dollars investment is needed. It’s about 50GW of renewables across Maharashtra, with almost 5 crore smart meters. All of this on the 2030 timeline. GEAPP is working on building a platform for payment security mechanisms to enable institutions and investors to come in. This could be issues with say, counter party risk which the platform will solve over the next 6 months to a year.

SaurEnergy: You mentioned PE and VC funds as well. Will these projects meet their return expectations? Wouldn’t pension funds be a better fit?

Saurabh Kumar: So, it’s a range of investors that we’re talking about. Today a PE in India is willing to take a 10-12% return because of volumes. GEAPP is trying to create volumes and because its decentralized renewables, slightly higher tariffs mean slightly higher returns as well.  When you need 30 billion dollars in a single state, there is no way only institutions can fill the gap. Going by the last 10 years, 70% of investments would come from outside. Domestic capital tends to be the debt part. What is needed in these projects is equity.

SaurEnergy: How did you arrive at your key focus areas for India?

Saurabh Kumar: We had extensive consultations with stakeholders, including the government. We started to respond to those specific requests, which showed a pattern. The pattern was that technical assistance was perhaps more valuable to the government than grant money.  Creating a project will bring in private investments. That’s how we arrived at what we do now. So creating viable projects, If you digitize more, the transparency goes up, investors come in. On BESS, while being battery focused, we are completely technology agnostic.

SaurEnergy: On the EV side, is there anything you’re doing specifically?

Saurabh Kumar: We did a lot of work over the past year. When PM Modi went to the US, there was a statement issued that US would help India with  a payment security mission for 10,000 EV buses. We have worked with the govt. of India and successfully created a SECI for transport. In the next 3 months, it’ll be done. Now, there is no need for more help in this sector.

SaurEnergy: GEAPP has been working in Africa as well, anything we can learn from the experience there?

Saurabh Kumar: Not really. Tariffs are nearly 13-14 cents a kilowatt in Nigeria, South Africa, other large countries in Africa. It was the same in India 10 years back. India created SECI, the whole model for aggregation on demand. The world needs to learn from India. We say we’ll become viksit(developed) Bharat by 2047. Look at any development trajectory including China. Development in all these cases has been fueled by cheap fossil fuels. 70% of India’s energy needs in 2047 is yet to be built. All of it is going to be built by clean energy. This is something that no one has been able to do. There is a gap in implementation, but the vision is there. The world will learn from India as we get it right.