Transmission, Distribution, and Energy Storage Systems in the Power Sector

Alan Roy
Jul 11, 2024
6 min read

In today's power sector, understanding how electricity reaches your home or business and the emerging role of energy storage systems (ESS) is crucial. This post delves into the transmission and distribution of electricity, highlighting key components such as transformers, smart meters, wires, and lines, and explores the growing significance of ESS.

Transmission

High Voltage for Long Distance:

Generation: Electricity is generated at power plants using various sources like wind, solar, coal, and natural gas.
Transformers: To transmit electricity efficiently over long distances, it's converted to high voltage using transformers. High voltage reduces energy loss during transmission.

Transmission Lines:

High-Voltage Lines: These are the large towers stretching across landscapes, carrying high-voltage electricity from power plants to substations over many miles.

Substations:

Voltage Reduction: At substations, transformers step down the voltage from high to medium levels suitable for distribution.
Reliability and Routing: Substations manage the reliability and routing of electricity, ensuring it's directed from areas with excess supply to areas with high demand.

Distribution

Further Voltage Reduction:

Distribution Network: After substations, the medium-voltage electricity enters the distribution network, including the poles and wires seen along local roads and in neighborhoods.
Transformers: Mounted on poles or placed in underground vaults, these transformers further decrease the voltage to safe levels for homes and businesses.

Distribution Lines:

Lower Voltage Lines: These lines carry electricity to end users and can be either overhead or underground, extending into residential and commercial areas.

End User:

Service Drop: Electricity reaches your home or business through a service drop, passing through a meter that records usage.
Internal Distribution: From the meter, electricity is distributed inside the premises to outlets and appliances.

Key Components in Transmission and Distribution

Transformers:

Step-Up Transformers: Increase voltage for efficient long-distance transmission.
Step-Down Transformers: Reduce voltage at substations and in the distribution network for safe usage.

Smart Meters:

Usage Recording: Smart meters record the amount of electricity used and can provide real-time data to both consumers and utility companies.
Efficiency: They help in managing electricity demand and detecting outages quickly.

Wires and Lines:

Transmission Lines: High-voltage lines for long-distance electricity travel.
Distribution Lines: Lower voltage lines that bring electricity to end users.

The Growing Role of Energy Storage Systems (ESS)

Global and Indian ESS Landscape:

Global Projections: The global capacity for solar and wind power is expected to exceed 5.4 terawatts in new installations by 2033, increasing the cumulative total to around 8 terawatts.

Importance of ESS:

Smoothening Intermittency: ESS helps manage the fluctuations in solar and wind power supply.
Continuous Energy Supply: Ensures a steady supply of energy even when renewable sources are not generating power.

Types of ESS:

Battery Energy Storage Systems (BESS)
Pumped Hydro Storage (PHS)

Indian ESS Market and Projections:

CEA Projections for FY30: India needs at least 41.7 GW/208.3 GWh of BESS and 18.9 GW of PHS.
Installed Capacity (as of Mar'23):
BESS: 33+ MW
PHS: 4.7 GW
ESS Tenders (as of Nov'23): Over 8 GW of ESS tenders awarded in India.
Manufacturing Capacity Pipeline: 96 GWh of BESS manufacturing capacity in the next 6 years.

Growth Projections:

BESS: From 33 MW in 2023 to 41,700 MW in 2030 (more than 1000x increase in 6 years).
PHS: From 4.7 GW to 18.9 GW (4x increase in 6 years).

Key ESS Models and Their Benefits:

SECI Tender Designs:
Peak Power Supply
Round-The-Clock (RTC)
Firm & Dispatchable Renewable Energy (FDRE)
Standalone ESS

RTC vs FDRE:

RTC: Ensures high availability (70% monthly) and has lower tariffs due to high ESS utilization.
FDRE: Demand-driven and load-following, providing what is needed rather than offering available energy. Marginally higher tariffs compared to RTC but highly suited for specific demand-driven needs.

What are Battery Energy Storage Systems (BESS)?

Battery energy storage systems (BESS) play a crucial role in the modern energy landscape. They capture energy from various sources and store it in rechargeable batteries for later use. Often combined with renewable energy sources, BESS can accumulate renewable energy during off-peak times and then release the stored energy during peak demand. This not only helps to reduce costs but also establishes significant benefits for users. BESS has flexibility with grid connection and can be operated in local mode when the grid is not available.

Components of Battery Energy Storage Systems

Battery:

The battery is the fundamental element of an electrical energy storage system.

Battery Management System (BMS):

Ensures and keeps track of the internal performance of the battery cells, system parameters, and potential hazards.
Internally collects data to monitor and maintain an optimum level of charge without overcharging, helping to prolong the lifecycle of the system.

Power Conversion/Conditioning System (PCS):

Converts the direct current produced by batteries into alternating current for grid consumption.
During off-peak times, the PCS stores energy from the grid in the BESS.
Offers bi-directional flow from DC-AC and AC-DC, managing the power exchange between the energy storage system and the grid.

By understanding these components and their functions, we can appreciate the pivotal role of BESS in enhancing the efficiency and reliability of our power systems, particularly as we integrate more renewable energy sources.

Visual Representation of ESS Operation

In the diagram, you can see the detailed operation and components of an Energy Storage System (ESS). The diagram illustrates how energy is stored in battery modules, managed by a battery management system, and converted for use by a power conversion system. The ESS integrates with renewable energy sources like solar and wind, storing surplus energy and balancing grid variability by supplying stored energy.

Future of Battery Energy Storage Systems (BESS) in India

The future of BESS companies in India is highly promising, driven by various factors including the country's renewable energy targets, government policies, and technological advancements. Here are the key aspects shaping the future of BESS companies in India:

Key Drivers

Renewable Energy Integration:

Growing Renewable Capacity: India aims to achieve 450 GW of renewable energy capacity by 2030. BESS is crucial for integrating this intermittent energy into the grid.
Grid Reliability: BESS can help in balancing the grid, managing peak demand, and providing backup power, thereby enhancing grid reliability.

Government Policies and Initiatives:

National Energy Storage Mission: The government is focusing on creating a robust energy storage ecosystem, which includes financial incentives and policy support for BESS projects.
Regulatory Support: Policies that promote renewable energy and storage solutions, such as net metering and time-of-day tariffs, support the growth of BESS.

Electric Vehicle (EV) Expansion:

Rising EV Adoption: As the EV market grows, so does the demand for battery storage solutions for charging infrastructure and vehicle-to-grid (V2G) applications.
Battery Manufacturing: Investment in domestic battery manufacturing, driven by initiatives like the Production-Linked Incentive (PLI) scheme, will benefit the BESS sector.

Technological Advancements:

Innovation in Battery Technology: Improvements in battery technologies, such as lithium-ion, solid-state batteries, and other advanced chemistries, will enhance the efficiency, lifespan, and safety of BESS.
Cost Reduction: Technological advancements and economies of scale are expected to continue driving down the costs of BESS.

Energy Access and Rural Electrification:

Microgrids: BESS can support the development of microgrids, providing reliable power to remote and rural areas.
Off-Grid Solutions: For areas without grid access, BESS combined with renewable energy sources can offer sustainable and cost-effective power solutions.

Challenges with ESS

High Capex:

Capital Expenditure: The high upfront cost of BESS installations remains a significant barrier, although declining over time.
Financing: Access to affordable financing for BESS projects is crucial for widespread adoption.

Regulatory and Policy Framework:

Policy Implementation: Consistency and clarity in the regulatory framework are essential to encourage investment in BESS.
Standardization: Developing industry standards for BESS to ensure compatibility and reliability is necessary.

Supply Chain and Raw Materials:

Material Scarcity: Dependence on critical raw materials like lithium and cobalt, which are often sourced from politically unstable regions, poses a supply chain risk.
Recycling and Disposal: Establishing effective recycling and disposal mechanisms for batteries is essential to mitigate environmental impact.

Technological and Infrastructure Development:

R&D Investment: Continued investment in research and development is required to improve battery efficiency, longevity, and safety.
Supporting Infrastructure: Developing adequate charging infrastructure and ensuring seamless integration with the grid are critical for the growth of BESS.

Strategic Recommendations for BESS Companies

Invest in Research and Development:

Advanced Technologies: Focus on developing advanced battery technologies with higher energy density, longer lifespan, and improved safety.
Alternative Materials: Explore alternative materials and chemistries to reduce dependency on scarce raw materials.

Form Strategic Partnerships:

Collaboration: Collaborate with government bodies, research institutions, and industry players to drive innovation and policy development.
Alliances: Establish alliances with renewable energy companies, EV manufacturers, and utilities to create integrated energy solutions.

Scale Up Manufacturing:

Manufacturing Capabilities: Invest in scaling up manufacturing capabilities to achieve economies of scale and reduce costs.
Advanced Techniques: Adopt advanced manufacturing techniques and automation to enhance efficiency.

Develop Recycling Capabilities:

Recycling Programs: Establish robust recycling and second-life use programs for batteries to minimize environmental impact and secure raw materials.
Circular Economy: Work with stakeholders across the value chain to create a circular economy for batteries.

Expand Market Reach:

Emerging Markets: Focus on emerging markets and rural electrification projects to expand the customer base.
Tailored Solutions: Tailor products and solutions to meet the specific needs of different market segments, such as residential, commercial, and industrial customers.

Leverage Government Policies:

Incentives and Subsidies: Stay informed about government policies and leverage available incentives and subsidies to support growth.
Advocacy: Engage in advocacy and policy discussions to shape favorable regulatory frameworks for the industry.

By addressing these opportunities and challenges strategically, BESS companies in India can position themselves for long-term success in a rapidly evolving energy landscape.