EPAL, a joint venture between Indian state-owned company Energy Efficiency Services Limited (EESL) and UK-based EnergyPro Limited, is partnering with Leclanché to tap the emerging demand for energy storage in India.
EPAL and Leclanché have initiated their partnership through EPAL’s acquisition of a Leclanché’s shareholding – worth $12 million (€10 million) – in a 28MW Canadian grid battery.
Swiss Green Energy Management (SGEM), an investment firm targeting the long term investment potential of energy storage assets, is the other co-investor in the Basins 1 and 2 battery storage system in Ontario. SGEM holds a 51% stake.
Leclanché will be a preferred supplier to energy storage and electric vehicle (EV) charging infrastructure opportunities that EPAL’s parent is focusing on India. The companies signed the deal at India House, in London in November.
According to Leclanché’s chief executive Anil Srivastava EPAL’s parent, EESL, will use the Ontario acquisition to see how energy storage can help stabilize the grid for application in India.
If India is to reach its ambitious target of 175GW of wind and solar by 2022, equivalent to 40% of the country’s energy supply, energy storage is required to integrate these intermittent forms of generation into the grid.
Utilities and other developers of renewable energy plants have to pay for frequency deviations, known as unscheduled interchange (UI) charges.
In other markets and countries that are scaling back fossil fuel (coal) generation and increasing the production of electricity from renewable sources, energy storage is being deployed to stabilise grids through provision of frequency control, a type of balancing service.
In India, where renewables accounts for 8% of the energy supply, UI charges paid by utilities and the different states, have been in the region of $500 million. These costs will increase substantially if India’s pursues its 40% renewable energy target, as frequency deviations will increase.
In China some 20% of renewable energy is curtailed because there isn’t sufficient grid capacity. India intends to avoid this issue of wasted energy by building energy storage with solar and wind farms, to store excess energy to supply when there is demand, reducing curtailment and optimising the output of wind and solar farms.
Saurabh Kumar, managing director of EESL and chairman of subsidiary EPAL, says: “We are seeing a lot of interest now in India, in terms of how energy storage can enable cost-effective integration of renewables in the grid and support EV demand. There is potential for a company like Leclanché, with its proven core energy storage technology and the expertise gained in supplying projects.”
However, activity in India’s solar energy sector has stalled, potentially throwing into doubt India’s ability to install 100GW by 2022. Solar panel prices and flat power demand have stymied demand, while, the government hasn’t held auctions for solar projects recently. A proposed anti-dumping duty on cheaper module imports from countries like China and Taiwan could also hinder the market’s growth.
India has set itself one of the most ambitious EV mandates in the world, to replace new internal combustion engine vehicle sales with EVs by 2030.
The government has committed already to supplying 10,000 EVs for government staff and its extensive civil service. EESL is procuring these EVs. However, the Indian government aims to raise this number to 500,000 in the next few years.
Fast charging infrastructure requires higher power capacities, placing pressure on the grid. Energy storage can alleviate this issue, by storing energy from co-located renewables, like solar photovoltaic arrays, or off-peak energy for recharging EVs.
In the utility opportunities that the partnership is targeting, EESL aims to be a co-investor and owner and operator of the energy storage assets, with Leclanché as the turnkey contractor for the energy storage systems.
Similarly, EESL is in a good position to own and operate EV charging stations in India.
In Europe, EPAL and Leclanché will identify opportunities together and EPAL will potentially invest in, or acquire, those that Leclanché is supplying in Europe.