To Ease Energy Transition, Ramp Up Storage, Strengthen Transmission, Pg10

Key Highlights:

• India's power sector has transitioned from a perpetual deficit to a surplus during solar hours, primarily due to massive capacity additions.
• Total installed renewable capacity, including large hydro, is nearly 292 GW, constituting about 53% of the total, with solar alone at approximately 162 GW.
• This growth has reduced peak and energy deficits to 1-2%, but created new challenges like wasting solar power and grid instability.
• Current issues include backing down coal generation during solar hours and facing deficits at night due to various factors.
• Solutions proposed involve ramping up energy storage, strengthening transmission infrastructure, improving demand-side management, and creating flexible market mechanisms.

Power Sector Shift.jpg

Detailed Insights:

• Historically, from 1990-2000, installed capacity grew at 5% while demand increased by 7-8%, leading to significant power deficits.
• The Electricity Act, 2003, aimed to dismantle State Electricity Boards (SEBs) and establish separate entities for generation, transmission, and distribution.
• Post-2008, electricity exchanges boosted investment, adding over 100,000 MW of coal-based capacity between 2010 and 2020.
• Unbacked loans for power projects led to thousands of megawatts becoming stranded and an increase in Non-Performing Assets (NPAs) for banks.
• The surplus in solar generation necessitates backing down coal plants, leading to wasted renewable energy and reduced longevity of thermal assets.
• Building energy storage, particularly pump storage, is time-consuming and faces challenges with non-remunerative pricing from competitive bids.
• Strengthening the transmission system is crucial to efficiently integrate and distribute the growing renewable energy capacity across the grid.
• Effective demand-side management can help balance the grid by influencing consumer electricity consumption patterns.

Key Concepts Involved:

• Energy Transition: The global shift from fossil fuel-based energy production to renewable energy sources.
• Grid Balancing: The process of matching electricity supply with demand in real-time to maintain grid stability.
• Power Purchase Agreements (PPAs): Long-term contracts between electricity generators and buyers for the sale and purchase of power.
• Non-Performing Assets (NPAs): Loans or advances for which the principal or interest payment remained overdue for a period of 90 days.