8. SYSTEM INTEGRATION OF VARIABLE RENEWABLE ENERGY

(Delhi, Maharashtra, Uttar Pradesh and Telangana) have applied TOD pricing to the category. Previous studies on the impact of EV charging on system integration have found that fixed time-of-use pricing approaches can have negative side effects for the system, because EV charging can contribute to capacity spikes that can occur at the beginning of low-cost time windows. Hence, promoting managed charging of entire EV fleets in line with real-time system conditions is likely to be the preferable option once EVs achieve scale.

Storage

With the increased share of variable renewables, the flexibility provided by storage resources will become increasingly important. In India and globally, PSH remains the most widely deployed utility-scale storage option. By absorbing off-peak energy and providing peak power, PSH also improves the overall economy of power system operation and increases the capacity utilisation of thermal stations. PSH resources, are however, highly geography specific and are not available everywhere. To support system flexibility, PSH can play an important role in several states as long as existing regulatory and tariff barriers can be overcome.

India has significant hydro reservoir capacity and a large PSH potential, which, however, remains untapped (MNRE, 2015). Out of more than 90 GW of PSH potential in the country, only 4.8 GW is designed and capable of operating as pumped storage units. The 4.8 GW of capacity is provided by nine PSH plants. Only 6 power plants (24 units) with a capacity of 3.3 GW are operational today. Table 8.3 shows the allocation of PSH capacity in six Indian states.

Table 8.3 PSH capacity (≥ 25 MW), 2019

Source: CEA (2019c), Pumped Storage Development in India (Installed Capacity above 25MW), www.cea.nic.in/reports/monthly/hydro/2019/pump_storage-01.pdf.

Battery storage

The rapid decline in global battery technology costs is creating an opportunity for battery energy storage systems to play a larger role in providing power system flexibility. They offer fast and accurate responses to dispatch signals from system operators, and their modularity enables a wide range of installation sizes and potential locations for deployment. However, they are not yet a fully cost-competitive flexibility resource. While further cost reductions and improvements in the technology performance are expected,

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8. SYSTEM INTEGRATION OF VARIABLE RENEWABLE ENERGY

Box 8.1 Power system flexibility in India in 2040

According to IEA World Energy Outlook analysis supported by the IEA’s System Integration model of India, adequate system flexibility is essential for the security and reliability of electricity supply in India in the coming decades of 2020 to 2040. Flexibility needs are expected to increase dramatically as the profile of demand becomes more variable, with higher peaks, and as the share of solar PV and wind increases from 4% in 2017 to 28% in 2040. (Figure 8.11) Given the seasonality of India’s wind generation and the steep drop in generation from solar at sundown in all the modelled regions, storage is deemed to play an important role in the electricity markets. By 2040 India accounts for 60 GW out of almost 220 GW of global battery storage capacity. Hydropower also contributes to the flexibility in India’s power systems, reaching nearly 110 GW of installed capacity by 2040 in the IEA modelling analysis.

Figure 8.11 Hourly generation mix and wholesale market price of electricity in India in the New Policies Scenario, 2020 and 2040

Hour of day

Source: Adapted from IEA (2018a), World Energy Outlook 2018.

Higher VRE penetration leads to increased flexibility needs, which were assessed with an expanded suite of modelling tools. A combination of four flexible resources – power plant flexibility, better interconnections between the five sub-regions, demand-side response and energy storage – helps meet this requirement. The contribution that each of these resources makes varies across regions, reflecting different levels of availability (Figure 8.12). For example, in terms of generation, the north-eastern region uses a high proportion of the flexibility available from hydropower, due to its relatively low operating costs.

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8. SYSTEM INTEGRATION OF VARIABLE RENEWABLE ENERGY

Given their dominant role in electricity supply, coal-fired power plants are a critical part of the flexibility picture in India, and efforts are underway to enhance their ability to respond to system needs. Use of transmission capacity is similar for each region, with the eastern part of India having the lowest rate of utilisation of transmission capacity, driven in large part by its connectivity with all the other regions. The average use of demand-side response resources is higher in the western, northern and southern regions, driven by the strong presence of wind and solar.

Electricity demand for space cooling accounts for a major share of demand-side response potential in all regions; however, barriers exist to tapping this potential, especially in residential buildings. As a result, sources of demand-side response utilised in the modelling are more diverse, with contributions from water heating (mostly in the north), water pumping in agriculture, EV charging, commercial refrigeration and certain industrial processes. However, in all of the modelled regions demand-side response is used at or close to its full potential during times of system stress. Storage shows a more homogeneous use pattern across regions, with the usage level consistent with operation at approximately one daily charge and discharge cycle. Indeed, on most days of the year, available storage is charged and discharged to its maximum.

Figure 8.12 Regional utilisation of flexibility options in India in the New Policies Scenario, TWh

Utilised Non-utilised

IEA 2019.

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Source: Adapted from IEA (2018a), World Energy Outlook 2018.

In the absence of storage or demand-side response, wind and solar output exceeds power demand by up to almost 60 GW in some hours. Demand-side response reduces

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