One interesting data that was given in the IEX call was on the role of exchanges in the energy transition and BESS (Battery Energy Storage Systems) and the power price arbitrage that will take place as Solar grows from 7% to say 20% of the overall energy mix.
Focusing on the solar power arbitrage , your non peak power cost is 3 rupees and your peak power in evening and early morning is 7 rupees. So a 7 rupee arbitrage for BESS ands with BESS prices are down to 3 rupee per unit from 10 rupee last year.
Source : IEX presentation
This is very good for both BESS players and Exchanges. A merchant solar farm can generate power in non peak hours for 2.5-3 INR and store the energy in a BESS via the exchange. They can Retrieve the same power in peak hours ( Early morning and Late evenings ) for 10-11 INR . However in this process they pay the exchange double.
Another data point on the BESS is how the prices have fallen making it attractive compared to coal based plants ( quick setup < 2 years, Lower cost, Green and less capital cost ) .
FY23 BESS battery setup cost was around 10 lakh per megawatt per month, now it has come down to 3 – 3.5 lakhs per megawatt per month ( and I feel it will come down further due to technological innovation which will expend life of the battery and newer chemistries ) . This brings the storage cost from 10 rupees per kWh to 3-5 rupees per kWh. Hence total cost of generation becomes 5-6 INR / kWh. This is cheaper than coal plant.
Disclaimer ; Invested and Biased.
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