Round the Clock Power through high Performing Renewables

We all agree to the fact that renewables do need an enabler to continue its growth phase and that the journey ahead from 87 GW to 175 GW will not be smooth. The plain vanilla business models may not be productive enough to keep the momentum going. Over the last two years the growth has also derailed a bit due to various reasons and Investor sentiments have been affected. So, what next? Hybridization of renewables came as a very welcome option, which brought in many benefits like better utilization of land, resource, transmission network and also gave benefits in bringing overall costs down as many resources could be shared. But what needs to be kept in mind is that fact that these benefits are more applicable for co-located wind solar hybrid projects. The India RE Hybrid Policy which was released in 2018 also spoke of the same. It further mandated that one of the two resources have to be at-least 25% to call it a hybrid project. The bids released thereafter though did not show much propensity towards such projects, partly due to lower ceiling tariffs being imposed on the same.

Recently CRISIL released a report, which projects that India has potential of around 15 GW of hybrid projects by 2025. SECI also has formulated plans of coming out with different types of renewable tenders aiming towards making renewables more dispatchable rather than just being available. The objective has also been to utilize energy storage in such tenders to elevate the Capacity Utilization Factor (CUF) of renewables to higher limits. The recently closed 400 MW RTC tender has set requirements of 80% annual CUF with minimum monthly CUF of 70%. The concept paper of SECI further discusses upon 3 kinds of tenders;

1.     Hybrid and peak power – to supply assured power during peak periods – 40% CUF

2.     RTC RE – round the clock renewables – 80% CUF, and

3.     Firm flexible RE for 12 – 16 Hours with +- 10-20% flexibility – 60% CUF

SECI shared that deployment of Energy storage at generation ill improve quality of power and PLF of plants. SECI said that such tenders with requirement of high PLF will help in better utilization of transmission network and help in reducing building of more transmission networks. This will also help in addressing high curtailment issues of RE, help in smoothing out high ramping requirement.

The Optimal Generation Mix Report 2029-30 as released by MNRE also puts forward the requirement of energy storage in the Grid (27 GW/ 108 GWh by 2030). The duration of storage as per the report is projected to 4 hours. The report further shares that this is with storage costs falling to $75/kWh by 2030, if the cost remains above 100/kWh, the storage requirement is further reduced. The report predicts that with increased RE penetration in the grid there will be cases of forced RE curtailments to balance the demand requirement and is cases of keeping RE running it will require further lowering of technical minimums of coal plants from the present 55% limit. But this comes at a cost, it comes at a cost of lowering efficiency, increasing heat rate and CO2 emission from the coal plants thereby increasing the per unit production cost.

Thus, it is clear that with focus on renewables attaining 450 GW by 2030, there is requirement of a buffer in the Grid along with more flexible resources, and also the requirement to make Renewables more dispatchable as a fuel source. Else even after having 450 GW of RE in the Grid the requirement of building more coal plants will remain to attain grid security.

The SECI Concept paper discusses the requirement of having higher PLF RE in the Grid. Now, this can not be done only by Wind Solar Hybrids, because even with the most optimal mixing the resultant PLF ranges between 30-40%, also if we talk of co-located sites there are very rare such sites which enjoys both wind and solar resources being favorable. Even if such sites are there it will not be providing annual utilizations of more than 40%. The only way to attain more is therefore to either oversize the RE capacity or add storage. With the present prices storage too has its own constraints for longer durations (Lithium Ion). Therefore, the most opportune solution is to oversize the renewable portfolio and then top it up with storage to keep the dispatch smooth. So, where is the problem?

The problem lies exactly here, i.e. oversizing the RE capacity. To attain an annual CUF of around 80% one will need to install a very large RE capacity. This brings in a lot of questions:

1.     How much oversizing is enough?

2.     Will the transmission network be able to evacuate that much of power over the contractual requirement?

3.     Oversizing will mean that the developer has to tie up with another off-taker for a long term contract. This brings in risk.

4.     The amount of excess energy that the oversized RE portfolio will generate will vary every month, thus we will need to have storage to make the power firm

5. If storage has to be included then what will be the most optimal sizing of storage. A high high capacity installation can result in under-utilization risk (during high RE months, there will be almost no utilization of storage)

But the first question is, is such a jump in utilization factor requirement necessary? Can we not take it in a more sustainable and step wise manner? Can we not make use of hybrids with storage and keep the utilization factor in such a range which will not demand for oversizing? Or if at all oversizing has to be done, the same will be limited. Oversizing to a huge extent will affect the energy-ecosystem in many ways too. Like it will bring about dynamics in transmission network planning. No matter how much the RE portfolio is oversized, there will be lull periods which will remain and also such periods where the RE portfolio will be enough to attain 80% utilization and the storage associated with the project will not at all be utilized (monsoon period). This putting a higher capacity of storage will also not be beneficial.

The question therefore is… What is the way around?

The SECI Stakeholders discussion brought out many such options and alternatives. Apart from the above challenges, one very important point which was discussed was. Why not focus on making forecasting and scheduling of renewables stricter? Why not set targets for renewable dispatches? Rather than making the RE curve flatter why not retain the bell curve nature of renewables and focus on making that curve smoother instead. This will also require storage to be included in the RE portfolio and thus renewables that much needed tag of being reliable and responsible as a fuel source. This will also help in better utilization of the transmission network and also save unnecessary new installations. Ideas like Existing projects with and without PPA and transmission approval should be allowed for Hybrids, this will also help in meter utilization of T&D network and help in better utilization of land and RE resource also came up. Renewables may not be thought of to serve the base load, that is already being served, the focus can more to towards making renewables more reliable to serve the variable and peak load. Also, it will be more efficient if rather than going for high PLF tenders, we instead match tenders as per what DISCOM requires. This also will call for better demand forecasting. The Round the Clock concept also discussed Renewables + Thermal, which should not be encouraged, running a coal plant at part loads will result in more losses than gains and also further delay our commitments on environmental fronts too.

Overall, Yes, the way we are progressing to is right but with a little tweak here and there. This will make the move sustainable over the long run. Else, in other to fix a short-term issue, we may end up creating a long-term problem for ourselves. Thus, it is very essential that the steps we take today are long sighted and make sure are sustainable in the long run, especially in todays world where technological disruptions are taking place more sooner than ever before.