India: storage to be included in 100 MW tranche of Andhra Pradesh 750 MW solar tender

Poised to top 4 GW of new PV capacity this year, it was only a matter of time before the issue of energy storage was tackled with any great gusto by the Indian solar industry.

However, state-backed Solar Energy Corp. of India (SECI) has confirmed this week the introduction of a pilot program in the next Andhra Pradesh solar tender that will compel bidders to include storage components in a portion of the auction.

Of the 750 MW capacity tender, SECI is asking for 100 MW of that to include some sort of storage capacity – thus potentially opening up the market for many of the world’s leading battery technology providers such as Tesla, Panasonic, Sonnen and Samsung.

The intention of the storage pilot program is to make it possible for Indian states to transfer solar energy between one another, while also reducing the intermittency inherent to solar installations. As the country adds vast volumes of solar capacity, grid connection concerns will mount, so the government is attempting to prevent such problems by incorporating storage capacity at large scale in advance.

The National Solar Mission (NSM) is working towards a goal of 175 GW of clean energy capacity by 2022, of which 100 GW should be solar PV. Under the terms of SECI’s instructions, there should be at least two storage projects included in the Andhra Pradesh tender, able to offer 15 minutes of storage each – small-scale levels of storage limited, SECI’s MD Ashvini Kumar told Bloomberg, to ensure costs are kept within a reasonable level.

Although large-scale storage would give the Indian solar market a much-needed security blanket, and the economies of scale necessary to serve the growing sector would help battery manufacturers bring down costs, skeptics are worried that a law advocating the inclusion of storage at this stage could serve to increase PV development costs.

In Rajasthan in January, a 420 MW auction saw solar’s strike price at reverse auction hit a low of 4.34 rupees ($0.06) per kWh, and so there are concerns that a storage push could actually increase the cost of utility-scale solar to around $0.12/kWh.

SECI’s Kumar was quick to dash these concerns, stressing that the small size of the storage project will not inflate solar development costs and has been carefully chosen to allow government to assess how much electricity fluctuation can be addressed.

India’s soaring solar industry is already "exciting" Tesla, which remarked in a shareholder letter last year that the country holds great potential for its Powerwall storage technology. Bloomberg also reports that Samsung is evaluating business opportunities in India for its solar+storage applications, while Panasonic is preparing to do likewise.

Recent analysis by Bloomberg New Energy Finance (BNEF) suggests that the global market for storage will rise to 11.3 GW by 2020, up from just over 2 GW at the end of 2015.