Flexible’ power system key to renewables push

Published by firstgreen on

The drop in renewable energy tariffs in India is one of the true success stories of the last few years. From around ₹10-12/kWh in 2010, solar tariffs have come down to ₹2.5-3/kWh. Wind tariffs have fallen from ₹4.5-5/kWh to a similar range as solar. There is no longer any doubt that renewables are cheaper than new coal, and indeed cheaper than large shares of the existing coal fleet.

India stands before the real prospect of being the first country in history to power its development through an early leap into renewables.

The UK in the 19th century and China in the 20th century powered their economies first with coal, and only cleaned up after they became relatively wealthy.

However, while the battle on costs is won, the next one is just beginning. Renewables such as wind and solar produce only when the wind is blowing and the sun is shining (in technical parlance, they are “non-despatchable”).

Electricity demand and supply, on the other hand, must be balanced at every second at every location on the grid. This balancing, every second as you read these words, is one of the technical marvels of the modern world.

There is no doubt that non-despatchable renewables create challenges for grid balancing. However, these challenges can be overcome.

The Energy and Resources Institute (TERI) has been leading a flagship project called the Energy Transitions Commission India, along with several international partners. The project has developed a roadmap for increasing the flexibility of the Indian grid, in order to enable large-scale integration of cheap renewables.

Supply cyclicality

What are the challenges? India is expected to rely on a higher share of solar PV, given its abundant and cheap solar resource. Solar’s output, seen across time, looks like a series of camel humps: zero at night, rapidly rising to near 100 percent at midday, and falling again to zero in the evening. This cyclicality, while relatively predictable, imposes large stresses on the power system. Secondly, India’s electricity markets are relatively immature and inflexible, providing little incentive for the flexible operation of, or investment in, responsive dispatchable plants like gas and hydro. Thirdly, given cost constraints to gas and social opposition to hydro, the scale of these traditional balancing options may be limited in India.

To these challenges, however, there are solutions.

Firstly, India must focus on making demand more responsive to variations in supply. Indeed, it already is, albeit for the wrong reasons, as Discoms curtail supply (load-shedding) to manage grid balancing and their finances.

This practice has large economic and social costs. To integrate renewables, we need the desirable kind of demand response, which doesn’t compromise with reliability. In agriculture, commercial cooling, parts of industry, and eventually electric vehicles, there is a large potential to shift demand to times of high production of cheap renewables, at negligible cost or even economic benefit.

Secondly, power plants themselves need to become more flexible to vary their output to balance the variable output of renewables. In India, the regulator is taking important steps in this direction. But the state-owned generators, hitherto resistant, need to be brought into the fold, and shoulder their fair share of responsibility for system balancing.

Finally, cost of electricity storage, while expensive today, is expected to come down and provide a crucial option for the grid integration of solar in particular.

Excess output can be captured midday and released in the evening, dampening the excessive cyclicality of solar. Costs are coming down at a tremendous rate, with recent tenders in Hawaii delivering solar plus four hours of battery storage at a hitherto unimaginable ₹5.76/kWh. These costs will come down further. The key to this is scale to allow learning-by-doing to occur.

The ETC India project’s analysis shows that a system based on a high share of renewables can deliver cheaper electricity by 2030, even considering the additional costs of balancing the variability of renewables.

However, this can only be achieved if a cost-effective portfolio of flexibility options can be developed, from shifting demand to match supply, making coal plants more flexible, and developing energy storage. If the flexibility of the power system is not swiftly increased, within a few years India will reach technical and economic limits to the growth of renewables. The success story will end.

source@bussiness line