“India Needs Schemes that can support the market expansion”, Stefan Louis, Nexcharge

Nexcharge, the Joint venture between Exide India and Leclanché, Switzerland, (Exide Leclanché Energy Private Limited) completes three years this year. It’s been a period of major changes on the battery storage front, with Lithium Ion batteries finally given the importance they deserve, with support from both the official PLI schemes and a major push from renewable energy projects as well.

Nexcharge estimates the current addressable market at around 8520 MWh, with the market set to grow to 26500 MWh by 2025. The firm is ramping its manufacturing facility to full capacity this year and will occupy the whole capacity in the next 3 years. We caught up with Stefan Louis, CEO and Chief Technology Officer, for his perspective on the market evolution.

Q.  How do you see the energy storage market in terms of size and growth this year? 

We understand that the energy storage market will be driven by Increase in adoption of EVs & Increase in Renewable power generation specifically in Solar rooftop application. Also in general we expect Li-ion BESS to grow at 15~20% CAGR for next 10 years

Q.  In terms of battery chemistry, what is the favoured option for Nexcharge currently? What are the other options you consider viable, in the near and longer-term future?

Nexcharge is focused on Li-ion Batteries. Within Li-ion space, different applications require different chemistries and our approach is to analyse the application requirement and then propose the solution which suits best. There are various battery chemistries which are available right now and in different stages of development and we see that only Li-ion batteries are the commercialised technology for large scale manufacturing and adoption. One of our core strength is that we can manufacture & offer battery packs with the popular chemistries like LFP, NMC, LTO etc. and cells with various form factors like Prismatic, Pouch & Cylindrical.

Q.  Do you see EV’s leading the market for battery storage, or could other segments grow faster?

As per most of the surveys the EV market will grow faster but the dynamics can change due to the current Epidemic. We focus on wide spectrum of applications in both EV and stationary battery storage systems.

Q.  Besides cost, what are the other significant challenges to expanding the storage market in India? What’s a price point where different segments, be it off-grid renewables, EV’s, and more grow faster?

We see that for front of meter (FTM) applications Govt policies are important and the manufacturing friendly initiatives with Regulatory reforms will help in expanding the storage market in India. For behind the meter (BTM) applications, the challenges are financing & liquidity.

Q.  Which segments are you seeing maximum traction in, currently? Within these, any specific insights? 

We see larger traction in Telecom segment, Electric buses, 2-wheeler, 3-wheelers & distributed energy storage. We are seeing that few OEMs have completely shifted to Li-ion batteries and other are at various stages of migrating process.

Q.  We have always seen customers in India find an innovative use for products, that even manufacturers didn’t plan for initially. Have you seen or received market feedback on anything like that yet?

We adopt stringent standards in testing and validating batteries for each application. Hence it is not advised to use batteries in applications which are not recommended. Customer behaviour is one of the most important factor for product planning and we study the ground realities and customer requirement when we design the product and services, hence knowing the state of charge & the state of health of batteries is important for customers and we have cloud based utilities to analyse that and the mobile app to connect to the customers. One area which has a scope of such solutions is EV charging

Q.  As a manufacturer in India, how do you see the environment for manufacturers? Has enough been done, between all the government schemes and incentives? Do you see India reaching its manufacturing targets for Lithium-Ion storage?

India is expected to develop the potential market for Li-ion storage and Govt. is serious about it which is visible in the recent PLI & incentive schemes, but they need to be more conducive to the manufacturing requirements & risks. Also there has to be schemes that can support the market expansion.

Q.  How does Nexcharge look at recycling and disposal of its batteries? Is there potential for specialized firms in that market, in your view?

Nexcharge has a responsibility towards environment and we follow the international standards for recycling & disposals. We have some strategies on how we do that locally through third party tie-ups. Many firms are working on improving the extraction process to make it more safe, reliable and efficient. We see a great potential in this segment.

Q.  You just started a recent project for community-based storage with Tata power DDL. Tell us more about how that works. Do the economics add up yet, or is this more like a pilot? Do you see the potential for big batteries like Hinsdale, or the Victoria bg battery in India? How could those be made a viable proposition in India? 

Major applications which we are serving with our community based storage project with Tata Power DDL are Deviation Settlement Mechanism, Peak shaving, Frequency & Voltage regulation and power backup to preferential consumers.

With the community based energy storage, capex investment for upgradation of substation can be avoided, which along with regular savings support the economics of the project.

We see a great potential for medium and big battery projects in India and anticipate the same to materialise soon. Also there is significant progress on couple of the big capacity tenders. We see that few applications like DG Offset specifically at Islands or remote locations, RTC tenders with Solar, Wind & Storage are already feasible

Q.  Is the pressure to keep power prices low, and the state of the power sector in general, a major challenge to the growth of the battery ecosystem in India? 

There are various issues which power sector is facing like Deviation settlement penalty, overloading of infra during peak loading, poor power quality, T&D losses etc. and Battery energy storage can help a lot in these issues.

We also think that some subsidies or tax benefit from Govt. will help in faster adaption of battery energy storage in similar lines to what was done for Solar in the initial phases.