Factor in the cost of grid harmonization

Factor in the cost of grid harmonization

It is welcome that competitive bidding has led to historic lows in renewable power tariffs and large green capacities nationally; of India’s total installed power capacity of 370 GW, renewable energy (RE) plants now add up to 87 GW (23%), including 37 GW of wind and 32 GW of solar power. However, the rising costs of grid harmonisation, the backing down of thermal plants when RE flows into the grid, so as to maintain stable grid frequency, needs to be duly factored in. The way ahead is to design better, more affordable storage systems and not to slacken the pace of RE generation.

The target currently is to have 175 GW of renewable power capacity, including 100 GW of solar power, by 2022. Meanwhile, Renewable Power Obligation (RPO), which mandated that power distribution companies (discoms) purchase not less than 5% of their annual energy consumption from RE sources till 2015-16, has been raised to 21% in 2018, the revised RPO to be met by 2022. But the associated balancing costs of higher transmission charges, given the high variability and intermittency in RE, are now significant and rising. There are other attendant costs, including the costs of backing down thermal capacities, keeping adequate storage (read: hydro power) capacity available, and the considerably higher costs of operating and maintaining conventional plants at lower capacity utilisation levels.

The costs need to be accounted for. Since the costs of utilityscale storage for RE remain high at present, solar rooftop capacity addition needs focused policy attention. As much as 40 GW of solar rooftop capacity is supposed to be in place by 2022, but there seems hardly any progress. Concurrently, we need to access multilateral funding for smart grids and quick-starting thermal plants to rationalise grid harmonisation costs.