Energy Storage Firm Fluence Plans to Set Up Manufacturing in India

Manufacturing batteries in India will take more time


U.S.-based energy storage products and services provider Fluence will localize its products in India by the end of 2024. However, the complex process of manufacturing batteries in the country may take longer, the company’s President and CEO, Julian Nebreda, said in an interview with Mercom. Fluence’s SVP & President, APAC, Jan Teichmann, spoke about the company’s partnership with ReNew and its plans for India.

Here are some excerpts from the interview:

What specific energy storage solutions is Fluence providing worldwide and in India?

Julian Nebreda: We are committed to developing solutions in the power sector using battery technology. Fluence is a joint venture with Siemens and AES.

Battery technology is used to accelerate the integration of renewables into the grid in a faster and more efficient way. Based in America, we operate worldwide. We look forward to working in countries that are renewables-focused, like India.

We have around 6 GW of installed capacity today, and India is one of our biggest markets as we expand. We are trying to bring in our expertise, knowledge, and supply chain to capture the opportunities India offers.

When did you enter the Indian market, and why did you choose India?

Jan Teichmann: We entered India in 2018 as we realized early that this was a developing market which was interesting for us.

Flexible gas-based power was not available in substantial quantity in India. So, a combination of the growing penetration of renewables and a lack of gas-based power convinced us that energy storage would be critical.

Fluence started when energy storage was not even considered viable in India.

We enter the potential markets where renewables need to be scaled. For instance, we introduced battery technology very early in the U.S., Australia, the UK, Ireland, and the Philippines. We applied the same concept in India.

Julian: We can add value to the ambitions of economies committed to renewables, like India, which has committed to achieving 500 GW of clean power capacity by 2030.

What markets are you catering to in India? (utility-scale, C&I, residential)

Jan: We are catering to the utility-scale market, and if C&I can be of a size that you can define as utility-scale, we are serving C&I also. We have also signed the first memorandum of understanding (MoU) very recently, and it’s a size that can be defined as utility-scale.

Our three target segments currently are independent power producers (IPP), power distribution companies, and utility-size C&I. The IPP is the biggest market segment in India today.

India’s corporate power purchase agreements (PPAs) segment is also one of our target markets.

What are the challenges you need to overcome, especially in a market like India?

Julian: India is a vast market that provides an opportunity for developing the supply chain. The country’s engineering talent can help us localize our technology here. India would also be our base to export our products.

While this is a great opportunity, it is also a challenge as we wish to take Made in India products to other markets.

We aim to integrate bright minds and talents into our company. There are more opportunities in India emerging from the challenges.

Why did you choose to partner with ReNew?

Julian: ReNew is using technology solutions like battery storage to address the challenge of climate change. We find that ReNew’s values are similar to ours – committed to quality and society.

Is your JV with ReNew exclusive?

Yes, the partnership is exclusive, and we will sell our products together to third parties.

Will the battery storage systems you use in the Indian market under the JV with Renew be manufactured in India?

Julian: As I said, we are working on localizing our products in the country as quickly as possible. Our processes are complex, so we plan to fully localize our products in India by the end of 2024.

The challenge is localizing battery manufacturing. We do not foresee manufacturing batteries in India until 2025 or 2026. We will localize everything but that. So, we would work with imported batteries for at least a while.

Batteries are almost half of the cost of the projects. So, we plan to have half the components needed in a storage system made in India and the other half – batteries – imported into the country. But we are committed to having a fully Indian product soon.

This is also a great opportunity for India to diversify the supply chain, as a lot of it is in China. We will continue to buy from Chinese suppliers. Still, we need to have India as an alternative, not only to serve the Indian market but globally, including the Asian and European markets.

We do plan to export the products manufactured in India to other countries.

When do you expect the first 150 MWh/300MWh peak power project in Karnataka –  to be commissioned?

Jan: We expect it to be commissioned by the middle of this calendar year (2023). All the equipment manufactured is going to be shipped by the middle of this year.

Battery costs are one of the biggest challenges to wider battery storage adoption. What is the projected trend for battery prices, and when do you expect it to become affordable for wider adoption?

Julian: If you look at the average cost reduction per year, battery prices have historically come down. If you look at it in the last ten years, the average cost has come down by about 18%.

We see a lot of investments flowing into battery manufacturing, and there are no major obstacles to that. Larger deployments will then be possible with prices lowering.

Many factors are to be considered, like lithium mining around the globe. But there is no reason to believe the prices will not come down.

We see news of different battery storage chemistries and various energy storage technologies. What are some of the trends you are seeing in energy storage? And do you think Fluence can play a role in the long-duration storage market?

Jan: In terms of economics and business cases, lithium is certainly the most attractive one. The reason is that electric vehicles (EVs) have a significant requirement in terms of volume, and the technology is profiting from the scale. Other technologies do not have the advantage of scale; therefore, we don’t see much change in the next 5-10 years. The scale is coming from demand in the EV sector.

We can offer up to 6 hours of storage in the long-duration storage segment. If you are looking at business cases with grid stability, this is where the need is from our point of view.

What are your thoughts on the Indian government’s energy storage obligation policy? Is this policy mechanism enough to get India’s energy storage sector off the ground?

Jan: Definitely, it gives a positive ignition. Indeed, we need to prove that it works in combination with renewable energy as an industry. If you look at California, Taiwan, or Australia, they have well-defined storage targets. The policy by the government in India is a good move.

Julian: We are here to accompany the Indian economy in addressing climate change concerns.