Beyond generation

India needs a more flexible power system

The power situation in September exposed a weakness that adding capacity alone cannot fix because the grid lacks flexibility when demand peaks and renewable output falls. Peak power demand touched 269 Gw on September 10, nearing the summer peak of 270 Gw in May. As a recent analysis in this paper has shown, between April 1 and September 20, average daily electricity supplied was about 10.5 per cent higher than a year earlier, while peak demand met rose 11.8 per cent. Since Covid, annual demand, average and peak, has grown at roughly 8 per cent. Persistent heat, deficient rainfall and higher irrigation demand have added to the pressure.

 

The challenge, however, is not simply that India needs more electricity. It needs more power at the right time and in the right place. Wind and solar supplied about 18 per cent of the increase in grid supply between April and September, up from 15.9 per cent a year earlier. But their contribution was concentrated in daylight hours: Renewables met three-fourths of the increase in midday demand. After sunset, the picture changed sharply. Demand rose 21 per cent between 6 pm and 10 pm, when solar generation falls and wind output may also be insufficient. The stress is already visible in market prices. Day-ahead prices at the Indian Energy Exchange rose from ₹7.5 to ₹10.3 per unit during September 1-20. A recent working paper by the Economic Advisory Council to the Prime Minister on changing “duck” and “camel” curves highlights how solar penetration is altering the net-load profile. On May 21, demand rose from 224.1 Gw at 8 am to a record 270.8 Gw at 3:45 pm, showing an increase of 46.7 Gw in less than eight hours. Solar can reduce the conventional fleet’s requirement during the day, but thermal and other flexible sources must rapidly ramp up when renewable generation declines. Without storage and flexible generation, greater renewable capacity may not address the tighter evening supply.

 

Further, fuel constraints compounded the September squeeze. Coal stocks at thermal power plants stood at 19.2 million tonnes as of September 27, 64 per cent below the required 53.7 million tonnes. Seventy-two of the 168 plants had critically low stocks. Deficient rain also weakened hydropower generation, increasing dependence on thermal power. This makes reliable coal logistics and the ability of thermal plants to respond quickly important even as India expands renewables. The policy response must, therefore, move beyond capacity addition to flexibility creation. Batteries and pumped storage can absorb surplus solar power during the day and release it during evening peaks. Transmission investment is also equally important. The Cabinet’s recent approval of Green Energy Corridor III, with ₹1.36 trillion for intrastate transmission and ₹50,000 crore for 50 GWh of battery storage, is a step in this direction. China’s rapid expansion of grid-scale storage offers a useful benchmark. India’s planning envisages 236 GWh of battery storage and 175 GWh of pumped storage by 2031-32. The storage needs viable revenue streams for services such as peak shifting, frequency regulation, reserves and congestion management. The next phase of power-sector investment must build the ability to generate, store, transmit, and quickly respond to shifts in demand.