Energy as a Service

In the last few weeks two big announcements caught my attention. Incidentally both of them happened to be Electric Vehicle (EV) charging stations. The first one garnered more attention because the union Minister for Roads inaugurated what was claimed to be ‘ The first public EV charging station’ in India (Nagpur). Following that, India’s largest power generating company NTPC announced its foray into EV charging stations.  Interestingly these are not the first EV charging stations, they are quite a few and in fact a website hosts a list of all such stations. Most of them are Mahindra showrooms considering they have the only 2 EV models manufactured in India.

Are we in a hurry or already late?- The missing gaps

The development in this space are encouraging but is this model sustainable or is it just a stop-gap arrangement tiding the wave of excitement in this sector? Before concluding on that here are a few open points:

  • The Electricity Act (2003) doesn’t permit sale of electricity unless you are registered as a distribution licensee. In this case, the energy resale to charge batteries is categorically not allowed.
  • Standards for charging stations are yet to be formalised. Public charging stations have to be compatible with a host of vehicles and chargers. Automotive Research Association of India (ARAI) has only recently finalised the standards for AC charging while the DC charging standards are yet to be announced.
  • Chargers

    The range of standards: Cty-IEA EV outlook 2017

  • Bharat Charger: The charger for India, a DHI initiative under the vision to get an all-electric fleet by 2030 has proposed a standard for charger. The initiative is laudable considering the grand vision but we are yet to have a final specification on that.

Energy as a Service (EaaS)

In spite of having a few gaps in the system both at the regulatory and technical front it is quite interesting to see the so called ‘public EV charging stations’ springing up in the country. As in any nascent market development it could be due to either of the two reasons; there is a significant demand for these or the businesses’ are keen to be front-runners in this space. I believe it is more of the latter and a little probe into these businesses have confirmed the same. While the developed world is trying to create a market for these, India has already begun what will be called ‘Energy as a Service (EaaS)’ business model.

evHow else does one account the amount of electricity dispensed at these stations to charge the batteries without being termed a ‘resale’? Only the ones being setup by Tata Power Delhi Distribution could escape being termed a resale. (However the 5 stations setup by them offers charging free of cost to Mahindra vehicles). The charging stations at Mahindra showrooms are as expected, ‘free’ with the costs in built in the sale. Similarly the charging station at Nagpur is an exclusive model developed in partnership with OLA.

The EV charging stations although not a perfect model for EaaS, is a good starting point. In due course, the charging stations would start differentiating in terms of the source of power, charging frequencies, time of charging etc. which would provide customers a wide range of choice, something we have been used too in other new-age services. However, in order to create a sustainable business model, the charging stations have be to be compliant within the regulatory and technical frameworks in due course.

Potential for Energy Storage in India: An industry perspective

Energy storage has been a buzz world off late globally and I recently had an opportunity to attend a workshop hosted by the India Energy Storage Alliance (IESA) that focused on evaluating the potential for energy storage integration to large scale Renewable Energy (RE) projects and the Electricity Vehicle (EV) market in India. The workshop had significant interest from top RE developers in the country considering the recent tenders from Solar Energy Corporation of India (SECI) to establish a solar plus storage in the upcoming solar parks in Andhra Pradesh (AP) and Karnataka.

The potential for energy storage integration with solar and wind

In general the overall potential for energy storage stems from the fact that RE is intermittent in comparison to the power demand and hence when there is a significant increase/decrease of RE in the mix there will a period when there will be notable dip from RE in contrast to demand which in graphical terms is referred to as Duck Curve/Camel curve.

duck_curve

Cty:IESA

It is this period that the power sector anticipates could be served by energy storage instead of turning on/off big fossil powered plants in a chaotic manner. The scenarios are well served in developed world where the Demand Side Management (DSM) has evolved to accommodate energy storage along with the ramping of renewable energy. However, the Indian scenario will be in sharp contrast considering the Indian power demand will be significant and so will the anticipated RE capacity of 175GW by 2022.

The industry believes that the large scale storage although envisaged currently would take time to ramp up but ancillary services market could be well served by energy storage in the short and medium term until the storage technologies reach market maturity. A section of experts are of the opinion that micro grids are not getting the right attention when it comes to storage. Energy storage could be well developed and integrated to micro grid sites. In short, storage as a value proposition will be viable for storing PV during peak sunny days or even for managing morning/evening peak demand and more importantly during the ramp-up/ramp down of RE generation, i.e. the anticipated duck/camel curve.

Electric Vehicles

The electricity vehicle adoption has not been up to the expectations of the government. Even with the nascent battery technology the Revas and Amperes did enter the market and create an impression on the EVs but they failed to take off. The National Electric Mobility Mission anticipates 6 million EVs or Hybrid EVs to rule the roads by 2020. The recent FAME (Faster Adoption and Manufacturing of Electric Vehicles; a 30-60 Lakh subsidy for Electric buses) policy that was launched with a subsidy outlay from the government has created a second buzz wave. It is aptly aided by the new generation vehicles from Mahindra and Ather energy, the latter in particular has taken the 2 wheeler EV market in India by storm, akin to the impact of iPod entry in the music industry (Follower beats the industry leaders).

ev

Cty:IESA

Aside to the passenger vehicles and its market, leading industry players are also investing significantly in the R&D of electric buses. Policy makers likewise have their task cut out in assimilating industry and market information from other countries where EV has been successful in trying to creating the right framework that facilitates the development of associated infrastructure that enables the operation of electric buses.

Overall, the market for energy storage looks promising although the Ministry for New and Renewable Energy (MNRE) anticipates the large scale adoption to kick in only close to 2020 with R&D and demonstration projects occupying the space until then. On the contrary, the road map for EVs are very optimistic with economic viability forecast in the next couple of years and India could see large scale manufacturing facilities in operation by 2020. However, like for any futuristic project of this scale a clear direction through policies and regulations is needed. For e.g. the ancillary service market in India has still not gained expected traction owing to lack of policies (read more). Similarly for EV and the sector to develop policies related to EV charging and reverse feed in tariffs have to be laid down. Nevertheless, there is some optimism in the air!

Elon Musk’s solution to store sunlight

Tesla PowerwallElon Musk draws comparisons to Steve Jobs whenever he steps on stage and the event to launch Tesla Energy was no different. After the event even his skeptics would agree that there are glimpses of Jobs in his approach.

ElonMusk-SteveJobsWhen apple launched the iPod it was not the first digital music player in the market but a decade later it has become the default name for digital music player. The same is the story behind iPhone and even the iPad. What Jobs managed to do with these products was not invent something new but rather make the product appeal to people at all levels.

Fast forward to Elon Musk, Tesla motors has revolutionized electric mobility like no other company before it. The Japanese are automotive pioneers and had options in electric vehicles but Tesla stands apart.  For sometime now we have come to know Elon Musk’s interest in solar energy (solarcity chairman, solaredge investor) and his plans to build batteries but little did we know that he would begin the process right at the bottom of the pyramid, the end user at distributed generation systems.

Watch Elon Musk’s talk during the launch of powerwall

He began his keynote presentation by talking about Keeling Curve (the curve that estimates the amount of CO2 in the atmosphere over a period) and the need to switch to renewable energy esp solar energy. He calls the sun a fusion reactor.

What Jobs managed to do with apple devices was to make people feel that they have something special in their hands. I’m a big fan of this concept and I believe renewable energy will reach its true potential only when people feel that they are in part responsible for its generation and also its consumption. And bingo, that is how Elon Musk presented his idea, the idea of US having a great potential to tap solar energy and most of it through rooftop solar systems. He then put the problems  with current batteries and our energy consumption in simple words by describing how big a room we need to store batteries just because we don’t have sunlight at night. What followed next was the launch of Tesla Powerwall

Powerwall is a Lithium ion battery which can seamlessly integrate with the existing grid, solar power and power your loads. Of course this is not the first product which does this but this product is so compact in design that you would want to have it right away even though it costs you upwards of USD 3500.

It is so compact in design that it is smaller than a typical 300Wp solar module! It is smaller than the source that powers it.

TeslaPowerwall Specs

The product is currently being launched in7kWh and 10kWh. The product is completely scalable and you could stack it. But the address also showed the first glimpse of battery pack with a capacity of 100kWh.

The event is just a preview of what Elon Musk plans to do in the future through Tesla Energy. The best part came in the end when the cameras zoomed to the energy meter of the building which showed zero consumption from the grid and all the energy coming from the powerwalls. Should I say trendy powerwalls? because you get to choose the colour of your battery to match the theme of your wall. This is customisation, it brings the consumer closer to the product even though he doesn’t understand the science behind its working. This is where Elon Musk aligns with Jobs style of thought; when the Germans are looking at industrial size Lithium Ion and Sodium Ion battery containers and the Chinese working on Lithium Ion batteries for electronic devices and mobility, Elon Musk went to the end consumer who is in turn a solar power generator and its consumer with a device that will make him feel proud

Read more about the product here