To ensure grid stability in the face of massive increases in intermittent renewable generation, India needs to produce flexible, stand-by generation and battery storage capacity, according to a new report by the Central Electricity Authority (CEA).

“A permanent mechanism of ancillary services needs to be provided for the country to manage the balancing of renewables, as well as emergency situations for frequency control,” CEA said in the report.

According to the report, these ancillary services are needed to ensure that the country has un-requisitioned surplus energy available at all times. It also recommends procuring this capacity through a competitive bidding process.

CEA envisions a system where various types of balancing sources are categorized based on how quickly they can be brought online – in seconds, minutes, or hours. The price for each category would be determined through bidding.

Also recommended is the establishment of a MW-scale battery pilot in the wind-rich state of Tamil Nadu to prevent power curtailments caused by congestion and deviation settlement mechanism (DSM) charges.

Despite the need for ancillary services, the report found that renewables are still a wiser and more economic choice for India than coal-based energy generation.

“Even after including the financial implication due to variable renewable generation, it would still be cheaper in the future to set up renewable generation capacity, as compared to coal-based capacity,” the report said.

However, the study emphasizes the need to keep standby capacity on hand for instances when wind and solar power go down, and notes that this ancillary generation capacity comes with a price tag. The cost includes the price of keeping balancing generation capacity on standby and compensating coal- and gas-fired plants for the additional wear and tear placed on their systems by ramping them up and down quickly.

The technical committee of CEA performed a detailed analysis to estimate the potential financial impact of keeping this capacity on hand based on case studies conducted in Tamil Nadu and Gujarat during the renewable energy-rich season of 2017. The analysis estimated that having these ancillary services on hand would have an impact of ₹1.57/kWh in Tamil Nadu and ₹1.45/kWh in Gujarat, with the price spread across renewable generation capacity.

Key Report Highlights

The trajectory of the revised Renewable Purchase Obligation (RPO) is uniform for all states, and this creates a need to share the financial implications of balancing charges.

Two types of generation balancing are required: balancing for uncertainty using battery storage, and generation capacity that can ramp up on short notice when a generation from intermittent renewable sources falls off due to its natural variability. Renewable generation varies during the day when wind speeds change or solar radiation dips due to cloud cover. The report recommends developing extra generation capacity that can make up any shortfall caused by intermittency.

The CEA report says the balancing source could be located either within or outside of a host state.