Renewables may face grid management challenge

India’s massive power grid system needs re-balancing to deal with the fluctuating/erratic nature of power generated from renewable energy flowing into the system and keep supply in sync with demand, says experts.

The concern comes as India pushes for an ambitious renewable target of 175 GW by 2022.

As more variable power generation sources are added into the grid, the more difficult this balancing becomes.

The fluctuating nature of renewable energy, be it solar or wind, is a problem for any grid in the world. For the Indian grid — which is generally unstable, managed manually and experiences shortfalls instead of having reserves and alternatives — like the grids in developed countries, the growing renewable capacity will become a major issue over the next 3-5 years, experts say.

“If only renewable capacity is coming up, its nature will start having greater impact on the grid. The impact is not there now because there is enough of thermal capacity and it helps in balancing,” Kuljit Singh, Transactions Partner (Infrastructure), EY, told BusinessLine .

The share of renewable-based capacity in the overall power generation capacity in India stood at 17.5 per cent as on March 31, 2017. Given low output of renewable-based plants, this translates into just 10-15 per cent of the total generation mix.

Globally, the grid starts experiencing issues when renewables cross 20-30 per cent in the power generation mix, requiring significant investments in transmission or peaker plants.

Kameswara Rao, PwC Partner, Government Reforms and Infrastructure Development, believes it is a good time now to recognise that renewable and thermal generators must collaborate and not compete. “Thermal power is a far cheaper source for base load and grid management than new storage technologies, and it can help increase share of renewable energy. For developing countries like ours, affordability remains a key consideration,” he said.

While Rao and other experts believe coal will remain the dominant fuel in India’s energy mix for decades, they suggest that savings from declining cost of renewable energy can be used to support thermal generators who are helping maintain grid reliability by balancing variability of renewable energy.

For this, utilities need to continue signing long-term PPAs which they are not willing to do now.

Experts, however, say that thermal sector players should change their mindset. It is not the efficiency, but flexibility — the ability to back down or ramp up operations in a short span of time — that is likely to become the key advantage for thermal power projects.

“Compensation for providing flexibility can be explored to encourage more renewable energy. This would help thermal plant owners make necessary changes in the plants to make them more flexible,” Lalit Jain, CEO International Solar and Chief Commercial Officer at Hindustan Powerprojects Pvt Ltd, told BusinessLine .

According to Jain, hydro could be the best source to absorb the variability of wind and solar power because in hydro power projects, potential energy can be stored and converted into electrical energy on demand.

“The way the grid is being managed currently is when there is excess of supply, wind or solar plants are backed down in several States,” said Jain.

“The discussions on smart grids and demand response systems so far have been more of an intellectual debate,” said Sanjay Aggarwal, Managing Director at Fortum India, adding that India needs to have a holistic approach to understand the consumption pattern and ways to balance out loading over the day.

Animesh Damani - Partner, Artha Energy Resources, believes one of the biggest challenges for grid management in India is digitisation.

“Nothing is real-time, it is more a reactive system than a proactive system, every State manages the grid in its own way, often on paper and in the regional language,” Damani said.

He added, however, that in a few States, the distribution companies (Discoms) have started adopting digitisation and other tools for more efficient grid management and private players are slowly entering the market.

Damani says that developed countries such as Germany could absorb a large capacity of renewable energy sources by achieving high levels of digitisation, setting up autonomous or decentralised systems of power provision and by subsidising the thermal power plants for flexibility.

“And it is not just the government or utilities that are ready to invest, but the consumers are willing to pay the premium for the country to go “greener,” he adds.

This seems like a distant future for India where rural and household consumers are heavily subsidised while industries bear the costs.