India’s plan to provide round-the-clock electricity with renewable energy can be achieved if issues related to peak demand and power storage are addressed adequately
India has begun initiating steps to ensure round-the-clock power supply through renewable energy. In January this year, the Ministry of New and Renewable Energy (MNRE) came up with a draft plan to supply round-the-clock (RTC) power from renewable (solar, wind, and hydro) projects, which would be complemented with power from thermal projects, clean energy consultancy Mercom reported.
By the first week of May 2020, the country witnessed the first round-the-clock solar power tender closing at Rs 2.90 (3.84 US cents) per kWh. ReNew Power emerged the winning bidder with the entire 400 MW capacity, while other bidders were Greenko, Ayana and HES Renewable.
The tariff would escalate by 3% annually for 15 years taking the average tariff of the project to Rs 3.60 (4.77 US cents) per unit. This rate is closer to the average rate of thermal power in India, industry insiders said.
The RTC tender was floated by Solar Energy Corporation of India (SECI) to supply power from solar power plants all though the day.
Renewable power is increasingly cheaper than any new electricity capacity based on fossil fuels, according to the Renewable Power Generation Costs in 2019 report by International Renewable Energy Agency (IRENA). The report highlighted that new renewable power generation projects now increasingly undercut existing coal-fired plants.
To be sure, it might take a while before 24/7 renewable power starts working for India, industry executives said. The efforts of the government in trying to level both forms of power generation are steps in the right direction, said Abhishek Gupta, president, Sunipod, a solar power company. However, there are some technical challenges to this that must be overcome, he said.
“When we ask for 24-hour power supply, one needs to inform the power generator, how much power is expected every hour or at least every time block. So typically, what happens is that there is a demand curve and some forecast that must be provided. The amount of power required during the entire 24 hours may be modelled and predicted as accurately as possible to provide hourly estimates. Besides daily power requirement, there are variations on a monthly, quarterly and yearly basis as well, based on seasons,” Gupta said. “Therefore, this data must be cleaned, modelled and provided so that the project developers may right-size their projects and generate cost estimates for more informed bidding.”
Projects may be slightly oversized so that this requirement can almost always be met and the difference between power required and power generated is always minimised. This has always been a problem related to power generation since load or demand is variable. The whole endeavour of the power industry has been to minimise this demand and supply difference, explains Gupta.
Thus, smoothening that difference and lowering the cost is the holy grail in terms of power generation. Many mathematical models that use existing data can be developed and several realistic parameters to reasonably predict the demand will enable that supply is matched as accurately as possible, he said.
Although renewable energy has made huge strides in terms of efficiency of technology, power output reliability and competitive cost, it still falls short when it comes to producing power on a predictable basis to meet the ever-changing consumer demand, said Vinay Rustagi, managing director of cleantech consultancy Bridge to India.
So far, this problem was manageable as the share of renewable energy was relatively small and it was afforded a must-run status. “However, as the share rises, there is more instability in the grid because of variation in both demand and supply sides. Therefore, storage solutions that can smoothen renewable energy output are critical for long-term growth,” Rustagi said. “Unfortunately, the cost of such a solution is still prohibitive. There is huge interest in storage technology and significant investments are being made in research and development, expansion etc. In this (SECI) tender, there is an attempt to increase power output from an average of about 30% to 80% and more. So, the consumers will get more renewable power, but there is a limitation in terms of timing of the power output.”
The government has relaxed some of the tender conditions, thereby reducing storage size and making the power more affordable. “We see it as an important but incremental step in renewable energy’s journey from an intermittent to a predictable source,” Rustagi said.
As far as project sizing and costs are concerned, if storage is oversized, the cost will go up substantially and the projects may become unviable and uncompetitive, said Gupta. The tenders that are asking for round-the-clock renewable power may have a glitch that needs to be addressed, he pointed out.
“The demand curves are not being discussed in detail and there is little quality information about how much power is expected from these renewable energy projects and at what time during the day. More so, when they are expected to provide power in sync and or in addition to the existing power generation plants both conventional and renewable,” Gupta said. “This, coupled with the fact that over the next few years, the government aims to reduce power generation from fossil and conventional methods and opt for renewable energy almost entirely.”
Information about minimum battery banks expected also needs to be provided, so that developers can calculate how much power is to be used and how much must be stored. Recent tenders do not have this clarity, Gupta said.
Need to address challenges
It may seem that developers are snapping up whatever projects that are coming their way, hoping to get more clarity after winning the projects and deal with any issues as they go along the project, industry insiders said. However, this may end up delaying project deployment and lead to cost escalations.
As the cost escalates, someone will be at the receiving end of this and buying this now expensive power. If this off-taker happens to be the distribution companies (discoms), who are now compelled to buy the power, then there is the problem of having to purchase more expensive power when cheaper options are available. Most discoms are already financially weak and burdened, so this will not go down very well with them, nor is it in the interest of the public, industry executives said.
It seems this process of finding the optimal cost of 24/7 renewable power is still evolving and there are some teething problems. These are not necessarily specific to India. Globally, battery size needs to be optimised and the right battery technology must be chosen that will last long and is cost-effective and has minimal environmental impact, experts said.