Late night peak demand puts industry out of the market

India’s fast expanding solar sector is expected to generate high demand for batteries for storing electricity which is harnessed from sun-light but the country’s power demand peaks late at night.

This mismatch demand and supply has created an urgent need for highly efficient storage system as India progresses on with the development of solar energy. It has set a target of 100-Gigagwatt by 2022.

It is a challenge to build a cost-effective energy mix, especially renewables, according to a senior executive at The Energy and Resources Institute (TERI).

“The solar electricity must be stored for use during peak period, which is late at night (10:00 PM to past midnight), while the energy is harnessed from afternoon sun (12:00 PM to 4:00 PM),” said Dr Nitya Nanda, Fellow & Area Convenor at TERI’s Centre for Resource Efficiency and Governance.

There is a mismatch between peak demand and electricity generation period for solar, he told a workshop on South Asia’s Challenges and Opportunities in Sustainable Energy Transitions held by Singapore’s Institute of South Asian Studies and Energy Studies Institute on 27 Nov 2017.

However, Dr Nanda is concerned about the high cost of storage system.

The battery-based set up would raise the solar electricity cost to consumer to Rs10 per 2.5 kV, from just nominal right now.

As for now, it is the cheapest form of electricity, as the latest bid shows that it could be available at less than Rs.2.5 per unit (kwh), and hence one can imagine a situation where solar power price go down to Rs.1-1.5 per unit. It is in a conundrum on supply and demand scenario.

Comparatively, the coal-fired power plants will be more competitive with this green-energy though these are considered not environment-friendly.

India’s coal-plant electricity would compete with solar during the off-peak period in the day, say, at Rs.1. But as the night sets in, it would raise prices to as high as Rs.10, as solar without storage would no longer be in competition, or with storage system be offered at Rs.10 at least, according to Dr Nanda.

Solar operational and maintenance cost is nominal as fuel is not used. Comparatively, coal-fired plant’s cost is Rs.2 and above. Coal prices are rising and would increase based on cheap peak demand from consumer, mostly households which switches to air-conditioning at night.

India’s old coal fired plants also lacks flexibility of shutting down during off peak period. These are designed to operate 24/7, compelling operators to run at full capacity and compete on prices in market place.

Building a coal-fired plant, with flexibility to shut and restart, will take a long time. It is also not an option in line with the Indian government’s green energy, works on climate change and environment-friendly programmes.

Comparatively, India’s slow-paced industrialization would also not be able to support the 100-GW solar electricity output planned, leaving it depending on household demand.

Higher industrial growth could generate higher demand during day time for green-energy, but it has not been the case as yet, argue energy experts. Producing electricity without demand and or storage is a waste.

Dr Nanda has suggested electricity exports to neighbouring Bangladesh, where gas fired plants have the flexibility of shutting down during off peak period and re-starting during peak demand.

Bangladesh could take Indian solar electricity at prices much lower than their gas-fired generation cost as it continues to face gas shortage amid volatile prices.

Pakistan, also facing a huge shortage of electricity, is another export market. But it is a political play though some talks have been held on exporting electricity with that country.

India has already installed 16 GW of solar plants and 40 GW of other green energy network including Wind, of the total 175-GW target by 2022. fii-news.com