Battery Energy Storage System (BESS) Pilot- Distribution


Enabling renewable energy integration in the distribution grid: A pilot on battery energy storage system (BESS) deployment

India’s National Tariff Policy mandates that power distribution companies (DISCOMs) purchase renewable energy (RE) to meet their renewable purchase obligation (RPO) targets. Procurement of RE, which is predictable and variable by nature, requires systems to tackle the variability and intermittency of RE power supply and prevent demand-supply mismatches in the grid. Battery energy storage system (BESS) is regarded as an effective tool to meet these needs, given the technology’s power-balancing capability to store and deliver energy quickly. Many countries across the globe are evaluating BESS as a major option for reliable RE integration. India, too, has been proactively examining technology options to modernize and evolve its power systems in line with the country’s clean, green energy goals.

The Greening the Grid-Renewable Integration Sustainable Energy (GTG-RISE) program, a joint initiative by USAID and India’s Ministry of Power, has been testing solutions to enable large-scale RE integration in the national grid. GTG-RISE has implemented a series of prioritized innovation pilots to bolster national and regional power systems’ ability to stay resilient while integrating RE. GTG-RISE is a key initiative under Asia Enhancing Growth and Development through Energy (EDGE) and is implemented by Deloitte Consulting.

The imperative for energy storage systems at distribution utilities

GTG-RISE conducted a pilot to examine and demonstrate the benefits BESS can bring to stakeholders in the distribution system. As part of the pilot, GTG-RISE provided technical assistance to a private DISCOM in Delhi — BSES Rajdhani Power Limited (BRPL) — for designing and implementing distribution network level deployment of BESS to manage distribution network congestion and reduce peak power purchase requirements.

To meet its RPO targets, BRPL has done a tie-up for 1,199 MW of RE plants at a competitive tariff, to be commissioned by 2021¬–22. The increase in RE procurement would enhance the variability and intermittency of power supply for BRPL. The DISCOM aims to meet the variability with more accurate forecasting techniques and leaning on fast ramping resources. However, the current absence of such measures can put grid stability at risk, leading to reserves procurement by the system operator at a much larger scale, thereby increasing system costs.

BRPL also witnesses a large seasonal and diurnal variation in demand and thus loading of assets. Given the high growth of solar rooftop PV in BRPL’s network, this variability is only going to increase in the future. The variability leads to huge surpluses and shortages within a single day. This has significant financial implications, as the sale of surplus power during off-peak hours is mandated as a must-sale in the day-ahead market (power exchange) at a price much lower than the purchase price. The sale of surplus power in the day-ahead market causes considerable loss for DISCOMs.

Making the case for distribution network-level deployment of BESS

GTG-RISE provided technical assistance to BRPL to examine how BESS could help it address the challenges it faced. Our team undertook a techno-economic benefits demonstration to assess the multiple benefits BESS could provide; we supported BRPL in techno-economic evaluation of 20 MW BESS in its system. The GTG-RISE pilot study assessed the optimal locations at which BESS could be deployed on BRPL’s network, focusing on RE’s impact on ramping requirements in accordance with the Indian Electricity Grid Code deviation limit set by Central Electricity Regulatory Commission (CERC) and Delhi Electricity Regulatory Commission (DERC).

We helped BRPL prepare a business case for BESS deployment in the distribution grid. The GTG-RISE team conducted a cost-benefit analysis, using Deloitte’s proprietary model, D.VAST (Deloitte Value Analyzer for Storage Technologies), to evaluate the economic viability of deploying BESS on BRPL’s distribution network. We estimated BESS’s benefits for ramping support, energy arbitrage (peak-shaving), capacity deferral, loss reduction, and outage management. The analysis was undertaken for all sizes of BESS (from 1 MW to 50 MW). Based on the maximum benefits realized, the optimum sizing of BESS was recommended for BRPL.

Our pilot helped BRPL model the benefits and prepare the business case for deploying grid-scale BESS in the distribution network, and also supported the design of BESS Power purchase agreement (PPA) with Service Level Agreement. Based on the pilot’s outcomes, a 20 MW 2-hour BESS project has been proposed, which is likely to be one of the first large-scale grid-connected BESS deployments in the country. It will demonstrate use cases that bring value to the system and provide benefits to end users. BRPL has submitted the GTG-RISE pilot analysis report to DERC for its approval. If deployed successfully, the study and the model could be replicated by utilities across the country.

Scaling up

The BRPL pilot study has been the first of its kind in India. The study’s modeling efforts demonstrated the potential scope and value of BESS applications for distribution. The framework GTG-RISE used to estimate BESS’s economic benefits for BRPL can be replicated at other DISCOMs to analyze the viability of BESS in their systems.

BESS is likely to become integrated into most DISCOMs’ operations over the next few years. Recognizing BESS’s importance in the transition to a clean energy economy, NITI Aayog, with assistance from The World Bank, undertook an assessment of BESS requirements in four Indian states. The World Bank used the outcome of the GTG-RISE BESS pilot to commission similar BESS value assessments for Gujarat, Madhya Pradesh, West Bengal, and Karnataka, with the goal of designing public-private partnership (PPP) opportunities to deploy battery storage in each state’s distribution systems. International Finance Corporation (IFC), a sister organization of the World Bank, has already initiated a slew of studies to identify potential battery storage deployment opportunities across different user groups, including distribution utilities. IFC has had several advanced discussions with interested parties to identify three potential use cases that could be deployed in the near future.

Concurrently, the Solar Energy Corporation of India (SECI) has been working to design several tenders for round-the-clock (RTC) power and peak power procurement from RE sources, all of which would require BESS/energy storage to meet the tender conditions. Two project tenders already have been awarded for development in Andaman & Nicobar Islands.

Notably, the recently notified draft Ancillary Service Regulations (2021) by CERC aim to provide mechanism for deployment and procurement of ancillary services (AS) in India. The draft AS regulations, if implemented, will pave the way for deployment of large grid-scale energy storage facilities for commercial operations.

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Events & Activities

To share knowledge with and train stakeholders, various workshops, bootcamps and executive exchange programs have been organized, under the USAID’s GTG program, on BESS so far.

Partners & Key Stakeholders

BESS Pilot aims to accelerate the deployment of Advanced Energy Systems and unlock huge market investments for large-scale storage deployment at the national level for grid application.

Battery Energy Storage System (BESS) is an important technology option for reliably integrating a large proportion of VRE into large power grids. A number of countries are evaluating BESS as part of their RE strategies. In India, energy storage has been the subject of study by a technical committee and task force constituted by the Ministry of Power (Large Scale Integration of Renewable Energy), and by Central Electricity Regulatory Commission (Staff paper – “Introduction of Electricity Storage System in India”, in January 2017). These studies have recommended appropriate policy and regulations to promote the storage deployment by relevant stakeholders. One of the pilots implemented under USAID’s Greening the Grid (GTG)-RISE Initiative is on the value of BESS to support integration of RE. Since, BESS’ overall economic value is yet to be established, a pilot analyzing techno-economic benefits of multiple use cases, supported by GTG-RISE’s national and international experts, will help develop a scalable roadmap for adoption in India. Other outcomes would include interconnection standards for grid-connected BESS and estimation of the systemic value of storage in the Indian power system, which will feed into policies and regulations to support deployment of BESS.

Battery Energy Storage System (BESS) pilot under the GTG-RISE initiative shall pave way for the central regulator to outline possible reserve capacity targets and unlock huge market investments for large-scale storage deployment at the national level for grid applications.

This pilot will test the technical and economic effectiveness of grid-connected BESS in providing dynamic frequency regulation and other ancillary services; capacity firming and energy time shift of VRE generators, peak shaving and load following; and dynamic reactive compensation and voltage support. The pilot shall also be crucial in providing inputs to CERC, CEA and the Bureau of Indian Standards (BIS) to finalize standards for BESS grid interconnection. The pilot will bring out specific recommendations for operation of battery energy storage system and required enhancements based on Indian grid conditions. Pilot will also address the optimization usability of BESS and economic evaluation of BESS operation in grid support.

Stage 1: Conceptualization & Pilot Implementation

  • Technical due diligence and detailed feasibility assessment of BESS
  • Selection of Implementing Agencies
  • Pilot Implementation & Demonstration of BESS use cases

Stage 2: Techno Economic Assessment & Modeling Framework

  • Techno Economic Assessment & Modeling Framework.
  • Design, Modeling and implementation of economic evaluation
  • Assessment of the Value of BESS in Frequency Regulation Ancillary Services

Stage 3: Regulatory and Market Framework

  • Assistance in framing Regulatory Mechanisms to introduce grid connected BESS for Ancillary Services
  • Recommendation on regulation, policy and market framework

GTG-RISE provided technical support, to one of the three power DISCOM (BRPL) in New Delhi, for deployment of BESS for managing the distribution network congestion and reduce peak power purchase requirements. NREL provided Technical support to BRPL on assessment of BESS effectiveness at distribution level considering feeder load, line congestions, DT capacity / overloading, Right of Way (RoW) and network losses.

The techno economic assessment provided valueable inputs on the following aspects:

  • Framework for value modelling of BESS in providing frequency regulation in the Indian power grid
  • Scenario based analysis i.e. optimal sequencing of reserves in the presence of BESSs as ancillary services
  • Assessment of additional opportunities for BESS to earn stacked value over the modelled time-frames
  • Assess the additional impact of BESS capacity being used for inertial and primary frequency response and its cascade impact on secondary and tertiary reserve requirements.
  • Recommendation on policy and regulatory support for grid connected BESS in India

The central component of GTG, RISE initiative, aims to design, implement and scale-up series of prioritized innovation pilots that support the integration of RE into the grid. Each pilot has its own implementation roadmap, stakeholder commitments, coordination and collaborations and periodic reviews by appropriate Government and regulatory counterparts. Towards this, a ‘Pilot Review Board’ (PRB) has been established for each pilot with an aim to promote transparency, ownership and accountability with the key GOI counterpart and other key stakeholders. PRB envisages to guide to address challenges, support stakeholder participation, help promote pilot awareness and lessons learned, and contribute to the sustainability of the individual pilots. PRBs is also there to review the ongoing performance of pilot activities and to recommend corrective action to maximize sustainability and minimize risk if any. Likewise PRBs will also review the challenges met or overcome in the scaling of pilot activities and make recommendations to support scaling.