The National Electricity Plan 2023–32 has set the peak power demand at 458 GW by 2032, a significant increase from the current 240 GW.
Does that mean India will need more thermal power capacity compared to 80 GW announced by the government earlier or would renewable energy with battery energy storage system and pumped hydro storage projects make up for the base load requirements?
NDTV Profit has tried to analyse the scenario in the current context and how the landscape is likely to change with addition of renewable capacity and could there be a possibility that India may not need any additional investments into thermal power as falling battery prices and firm and dispatchable renewable energy would compensate for fossil fuel-based power.
Given that the requirement is for peak load it is practical to assume that the demand will be primarily met by thermal power since solar, wind, or nuclear alone will not be able to meet the requirement. But experts that NDTV Profit spoke to believe pumped hydro storage projects and battery energy storage systems can be of great help if the emphasis given on them bears fruit with timely commissioning of these projects.
Sharad Mahendra, managing director and chief executive officer of JSW Energy Ltd.—which won India's largest 1,500 MW pumped hydro storage project in Maharashtra—believes that a huge opportunity lies in the PSP space and would be ably supplemented by battery energy storage up to 2030 and beyond.
"A pumped hydro project with a 6–8 hours of storage capacity and battery storage projects with an average of 2–4 hours capacity can invariably meet the peak power demand in the mornings and the evenings," he said.
According to Mahendra, in view of the faster demand growth than what was anticipated two years back, thermal power would still be crucial and play a significant role till 2032, beyond which it would start moderating as renewables with storage would pick up.
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Demand Supply Mismatch
Given the peak demand projections of 458 GW by 2032, it is likely that India could have a peak supply deficit of around 100 GW provided that India achieves the planned targets for renewable energy, thermal, nuclear, and hydro projects.
Using Central Electricity Authority's load factor assumptions, peak demand is expected to be 458 GW and the average demand at 70% load factor will be 324 GW. But, the supply of power during peak hours is expected to fall short by 100 GW.
Assumptions:
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500 GW renewable energy at 25% efficiency would generate somewhere around 125 GW average power.
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318 GW of thermal with 238 GW of existing and 80GW of new additions at 60% plant load factor would generate 191 GW of average power.
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10 GW of nuclear power at 80% PLF would be 8 GW of power, and,
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80GW of hydro power at 40% PLF would generate 32 GW of power.
The total aggregates to 356 GW of power generation. That is a deficit of 102 GW of power to meet the peak demand of 458 GW by 2032.
Now, that is where the pumped hydro and battery energy storage systems would become crucial in meeting the peak demand.
India aims to set up around 38 GW of pumped storage projects and around 12 GW of battery energy storage by 2032. PSPs operate at 30–40% PLF, which would mean an average power generation of 15.2 GW, while battery energy storage operating at 85–95% PLF would generate another 11.5GW of power.
This would add another 26.7 GW of power capacity suitable for meeting peak power demand given their flexibility of operation such as quick start and close of power flow.
Vinay Rustagi, senior director and head of the renewables business at CRISIL Ratings said that with power demand soaring at a compounded annual growth rate of 7–8%, more conventional thermal power is needed for energy security and base load requirement. Renewables have several advantages over thermal power, particularly with falling cost and storage technologies improving but still they face some execution and availability challenges.
Rustagi believes that falling battery storage prices make them more accessible, compared to pumped hydro projects which also have a much longer gestation period and higher construction risk. It is safe to say that battery storage would become a critical component in meeting peak power demand in the near future.
Another official, on condition of anonymity, said that an additional 40–50 GW of thermal capacity will come up by 2030 and it will be required because another 30 GW of capacity will retire as they would be past their age. Besides, meeting the base load, thermal can also be operated at lower PLFs if required, the official said.
Simultaneously, he sees pumped hydro capacity of 100 GWhr for five to six hours of duration, equivalent to 30–40 GW of pumped hydro storage to come up in the country. Battery energy storage capacity, he claims, would be around 12 GW for two to four hours of duration that would substantially aid in meeting the peak demand requirements.
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Conclusion
India's power sector will face challenges in meeting the peak power demand of 458 GW by 2032. While renewable energy additions and energy storage solutions will help, a peak power supply deficit of approximately 102 GW is expected.
Government can look at mitigation strategies to bridge the peak power supply deficit through energy storage solutions, giving thermal power plants flexibility to operate at higher load factors during peak hours, demand-side management and peak shaving measures, and with additional renewable energy capacity additions beyond 500 GW.
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