The power gap

Battery storage systems can maximise RE

Renewable energy (RE) is the key to achieving India’s commitment under the Paris Agreement. To this end, the government had set a challenging target of adding 500 Gigawatt (Gw) of RE power by 2030. So far, the installed capacity of RE power — mainly solar and wind — is 136 Gw as of March 2024, up from just 35 Gw in March 2014. But this relatively encouraging four-fold increase in RE installed capacity has never matched its actual contribution to electricity supply. Last financial year, for example, RE accounted for about a third of installed power-generating capacity. But it contributed to only about 13 per cent of the electricity supply. Thermal power accounted for 76 per cent.

This mismatch between the installed capacity in wind and solar power and supply has been a staple of the Indian power scene for some years now. It contrasts with the United States and European Union (EU), where wind and solar generate 21-22 per cent of electricity. In some EU countries, RE accounts for more than half the power supply. The key reason for India’s sub-par RE performance is a technical reason that grid operators refer to as the “duck curve” of high supply and low demand. This trend is partly the result of shifts in peak demand. Earlier demand peaked during office hours; now growing electrification in urban and semi-rural India and an increasingly prosperous middle class owning air-conditioners and refrigerators have created a new peak in the evening hours. The problem is that RE generation is not by its nature in sync with peak demand patterns since it can be generated only when the sun shines or the wind is blowing. Thus, it is likely to be available mostly during daylight hours when the demand is not all that high but is unavailable during the evening-hour peak. Increasingly hot summers are likely to keep power demand on the boil — for instance, in March this year, peak power demand rose to 221 Gw, against 208 Gw in March 2023. With late snowfall expected to limit hydro power generation this summer, coal-fired plants will likely do the heavy lifting in terms of meeting demand. This situation is unlikely to help India reach even its admittedly distant Paris Agreement commitment of net zero by 2070.

The key to integrating RE into a round-the-clock availability of power to cope with demand cycles is battery energy storage systems (BESS). But here, high capital costs have been a traditional deterrent. This issue is now being addressed by a flurry of recent policy initiatives. In September last year, the government endorsed viability gap funding for BESS. It aims to establish 4,000 Mwh of BESS projects by 2030-31 and will provide financial assistance of up to 40 per cent of the capital cost. Detailed guidelines were announced in March. In December, India became a member of the BESS Consortium, led by the Global Leadership Council of the Global Energy Alliance for People and Planet, which provides generous concessionary finance for BESS projects. These initiatives are in the early stages but urgently demand fast-tracking if RE is to become a meaningful component of India’s energy mix and underline the authenticity of India’s climate-change commitments.