In a joint study, Finnish power conglomerate Wartsila and consulting firm KPMG have said that supply-side flexibility is needed at the pan-India level to integrate 450 GW of renewables by 2030 efficiently.
The report notes that ancillary services’ current market design and structure need to be enhanced to manage imbalances efficiently at the state boundary. Efficient market design where energy and ancillary services are co-optimized will encourage investments in flexible resources for imbalance management. Even with large balancing areas facilitated by the market-based economic dispatch (MBED) mechanism, investment in flexible assets is required to achieve reliable grids.
The study demonstrates that India’s power system would not require any new coal-fired power plants to be commissioned beyond what is planned to meet the 340 GW peak demand. It suggests that India’s power grid could use internal combustion gas engines (ICE) and battery storage to meet the flexibility requirements. The study indicates that by 2030, India would need 38 GW of four-hour battery storage and 9 GW of thermal balancing power project for the cost-efficient and reliable integration of 450 GW of renewables.
More than 35 GW of wind and solar capacities would need to be consistently added annually between now and 2030. It suggests that higher supply-side flexibility reduces the cost of power in the system by enabling the full dispatch of low-cost generators while at the same time ensuring grid resilience.
The study finds that centralized or regional procurement helps lower costs. It advocates that co-optimization of the energy and ancillary services market is more efficient than separate markets for energy and ancillary services.
Managing India’s power system is becoming increasingly complex as its resource mix includes more weather-dependent and decentralized energy sources. To deal with such complexity, the system operator needs greater operational flexibility to reliably serve the load, increasing the need for ancillary services to keep the grid stable.
The analysis reveals that the addition of 1 GW of thermal balancing power plants, together with 500 MW 4-hour of battery storage in the electricity mix in each state, even in 2021, optimizes the existing power plants’ dispatch for better efficiency, lower operational and maintenance costs, and reduced renewable curtailment.
The findings suggest that the addition of thermal balancing with battery storage results in cost savings of at least ₹32 million (~$428,810) to ₹70 million (~$938,022) per day for states like Gujarat, Tamil Nadu, and Rajasthan. Thermal balancing plants can achieve 100% loading in less than five minutes.
In India, ancillary services have historically been delivered by identified thermal power plants. However, India’s policymakers and stakeholders are now convinced that energy and ancillary services markets require reforms in response to the changing resource mix and load profiles.
The Ministry of Power had proposed a new MBED mechanism to bring down the cost of power for distribution companies and consumers. The mechanism is also expected to enhance renewable energy integration with the balancing area increased from the state to the national level leading to a considerable drop in renewable energy curtailment.
In June, the Central Electricity Regulatory Commission had issued the draft ‘Ancillary Services Regulations, 2021’. The guidelines aim to provide power procurement through the administered process and from the spot market through power exchanges to pay for ancillary services and maintain the grid frequency close to 50 Hz.
Source: mercomindia.com
