FORGING NEW RELATIONSHIPS: US-INDIA RENEWABLE ENERGY PARTNERSHIP
This June, at the outset of the visit by the Prime Minister of India, the United States Government announced an award of $7.5 million for a joint US-India five-year project to help advance the development of smart power grids and clean energy storage systems across India. This announcement comes in furtherance of the US-India Partnership to Advance Clean Energy (PACE) programme, a collaborative effort initiated by the U.S. Department of Energy and the Government of India during the Obama administration for accelerating grid modernization, research and deployment.
For India, a country with a massive energy demand to match its growing economy and ambitious renewable energy goals, this announcement is highly significant. It renders a dual opportunity for India to revamp its transmission infrastructure, a source of great ordeal for its power sector, and to perform progressive research towards developing storage systems for its blooming solar and wind power industry. On the other hand, this strategic collaboration opens up a potentially huge export market for the United States, worth billions of dollars for U.S. equipment ranging from generation systems to transmission technology and storage units. This collaboration also provides participants from the U.S. a ground insight into India’s grid modernization effort and research access to India’s grid operational experience.
The consortium for the programme, named UI-ASSIST, comprises a healthy combination of industry and academia from both countries. Washington State University leads the U.S. team, and MIT, Texas A&M University, and the University of Hawaii are providing the research support alongside several other national laboratories. Companies such as Avista, Burns and McDonnel, and Alstom Grid Solutions have also joined in with some federal and state governmental agencies to contribute their industrial experience and exposure to the programme. The Indian side in the consortium is primarily represented by several Indian Institutes of Technology (IITs), which are some of the most premier engineering schools in India.
Laying the foundation for the PACE-R programme back in 2009, both the U.S. and India had agreed on joining forces for, inter-alia, combating climate change, accelerating clean energy finance mechanisms, and promoting super-efficient off-grid appliances. As an initial measure of its progress, in 2012, the U.S. Department of Energy had announced a $125 million joint funding for three consortia led by National Renewable Energy Laboratory (NREL), the University of Florida, and Lawrence Berkeley National Laboratory. The objective of the consortia researchers was to leverage their expertise and resources in solar technology, advanced biofuels, and building efficiency to unlock the huge potential of clean energy technology that could reduce energy use, cut dependence on foreign oil, and accelerate the deployment of renewable energy sources. As a five-year initiative, the Department of Energy had planned periodical contributions for the programme on a yearly basis that was to be corresponded by the Indian Government. The recent funding comes in the series of the same planned programme, however with a slightly more refined objective.
India aims for a gradual transition from a fossil fuel burning economy to a comparatively low-carbon economy through the increased use of renewables. In a phase-wise manner, India is planning to build 175 GW of renewable energy capacity by 2022 while shaving off much of its predominant coal-based production. In an interesting yet somewhat problematic development, India has scaled up renewable-energy production since the announcement of the mission plan to the extent that too much solar and wind power are being generated in some parts of the country. This issue is largely caused by the incompatibility of the existent transmission grids with the renewables across India and the long distance requirement for transmission between the producing states and the user states. There is a nationwide technical inadaptability of the existent power grids with the solar and wind power that are not as easy to control as traditional fossil fuel production. Renewables need the power grids to become flexible enough to handle last-minute changes in power generation, which is not available in the current transmission setup. Also, in India, six states in the Western and Southern regions account for 80 percent of all of the country’s currently installed solar capacity but only 38 percent of power demand. Although, India has prioritized a green energy corridor and other new transmission lines so that renewable power can be transmitted where it is required, that mechanism is supposedly insufficient. Significant power surpluses in some states have made additional alternative solutions an imperative, to which energy storage systems have been touted to be the most efficient and reliable recourse. Such systems would help states adjust themselves to the variability of the demand and supply both on intra and inter-state supply transmissions. In a recent report, Council on Energy, Environment and Water (CEEW), a prominent Delhi-based think tank, has projected a $2 billion energy storage market for off-grid renewable energy in India. According to the analysis, India’s Ministry of New and Renewable Energy’s target to install 500 MW of micro and mini-grids is an additional impetus of $500 million for such storage manufacturers. The report also noted some major issues related to energy storage plans such as the high-technology costs and the uncertainty around its performance in Indian climatic conditions; however, with the emerging boom in the energy storage industry with several new and seasoned companies entering the markets in the U.S. and elsewhere, the competition seems primed to drive down prices. Also, the research initiatives on international and domestic levels, such as the one discussed in here, can substantially improve the adaptability of the storage systems with the climatic conditions.
The Indian renewable energy market has been appealing to investors from wealthier nations for a long time. With the US leading the way, it’s highly probable that more nations would follow the course. Recently, ViZn Energy Systems Inc., a leading provider of energy storage systems based in Texas, approved a 1 MWh energy storage contract. The storage system is proposed to be installed and integrated by Raychem RPG at the Power Grid Corporation Limited facilities in Puducherry, India. Also, in the biggest investment of its kind, Mitsubishi and AES, another U.S. energy storage company, have launched a 10 MW energy storage array. Global energy giants are betting big on the Indian energy storage already, which is likely to grow even further in the coming days.
The PACE-R programme with contributory investments by both countries has ignited interest into a virtually untapped Indian energy storage market that has the potential to revive the fortunes for India’s power sector, while at the same time creating thousands of jobs for the renewables industry in the United States and around the world.
 U.S. Dept. of Energy, Energy Department Invests $7.5 Million to Improve Electric Grid Reliability and Resiliency (2017), available at https://energy.gov/articles/energy-department-invests-75-million-improve-electric-grid-reliability-and-resiliency.
 Office of International Affairs, U.S.-India Energy Cooperation, available at https://energy.gov/ia/initiatives/us-india-energy-cooperation.
 See, Dept. of Energy, supra note 1.
 See id.
 The White House, Fact Sheet: U.S. and India Climate and Energy Cooperation (2015), available at https://obamawhitehouse.archives.gov/the-press-office/2015/01/25/fact-sheet-us-and-india-climate-and-clean-energy-cooperation.
 Jamie Manley, India Already Has a Problem With Wasting Renewable Energy on the Grid, Green Tech. Media (Oct. 4, 2016), https://www.greentechmedia.com/articles/read/how-can-india-avoid-wasting-renewable-energy.
 Mayank Aggarwal, Off-Grid Renewable Energy Storage Market to be Worth Rs. 16,500 Crore by 2022, Livemint (May 16 , 2017, 8:40 PM), http://www.livemint.com/Industry/dMVXsavAUuGEsyIa04VERM/Offgrid-renewable-energy-storage-market-to-be-worth-Rs1650.html.
 See id.
 Julian Spector, Here’s Every Company That Entered the US Energy Storage Game in 2016, Green Tech. Media (Jan. 6, 2017), https://www.greentechmedia.com/articles/read/heres-every-company-that-entered-the-us-energy-storage-game-in-2016.
 Michael Safi, India Plans Nearly 60% of Electricity Capacity from Non-Fossil Fuels by 2027, The Guardian (Dec. 22, 2016, 2:01 AM), https://www.theguardian.com/world/2016/dec/21/india-renewable-energy-paris-climate-summit-target.
 Xiaoyi Wang, US Company Delivers Energy Storage to India, Asia Matters for United States (May 24, 2017), https://medium.com/asia-matters-for-america/us-company-delivers-energy-storage-to-india-3529ef8c869c.
 Mike Stone, India’s First Grid-Scale Battery Project Signals a Coming Boom for Energy Storage, Green Tech. Media (Jan. 27, 2017), https://www.greentechmedia.com/articles/read/indias-first-grid-scale-battery-project-signals-a-coming-boom-for-storage.
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