India’s electricity sector is poised to undergo a shift
The vision to scale up electricity generation through renewable energy sources- wind, solar and biomass is indeed a bold decision by Prime Minister Narendra Modi.
As Chancellor Merkel arrives in New Delhi, comparing the two countries on their energy focus is inevitable. Both nations are building their future on wind and solar energy – the two technologies that produce electricity, which is dependent on the weather.
India’s electricity sector is poised to undergo a shift. The vision to scale up electricity generation through renewable energy sources- wind, solar and biomass is indeed a bold decision by Prime Minister Narendra Modi. As India sets itself on a path to generate 160 GW wind and solar energy by 2022, this momentous programme will catapult India into a new era in power system development.
Germany is one of the pioneer countries in renewable energy with 20 years of experience in power sector transformation. It is certainly one of the most ambitious – aiming at 80% and more renewable energy capacity in 2050.
Despite the obvious and fundamental differences between the two countries – on the one hand a mature economy with stagnating electricity demand, on the other a rapidly expanding economy with a growing demand and 300 million inhabitants yet to be electrified, ambitions to scale up renewable energy are strikingly similar. Germany has already built 80 GW of renewables capacity, and it will add another 5 GW per year. India aims to generate 160 GW within the next seven years.
Building large electricity generation capacity based on renewable sources like solar and windwill fundamentally alter the Indian power system. In fact, this means a paradigm shift in the way energy is produced and consumed. For decades utilities constructed large power plant units to run 24hours a day 7 days a week,in order to provide constant output called ‘baseload’. In a power system with high shares of variable renewables – wind and solar – these huge and slowpower plants will be less and less needed. In fact, baseload is yesterday’s thinking.
The new paradigm is flexibility. With growing shares of variable renewables we will see more and more hours when wind and solar cover large shares of the demand. Hence the residual system will need to be flexible enough to ramp up and down very quickly according to changes in the output of electricity generation from wind and solar, and to cover the load when wind and solar are not delivering. This level of change in the way electricity can be produced can fundamentally alter the way we look at classical/conventional power generation.
Common knowledge says wind and solar is expensive. The obvious question is then why should India build wind and solar it is expensive and also makes operation of power system more difficult? The answer is simple: renewable energy has many advantages over conventional generation technologies: less pollution of air and soil, relatively less water consumption, less fuel imports, less CO2 emissions, more jobs per unit compared to conventional sources. And we can expect solar PV and wind onshore being amongst the cheapest generation technologies in the future; hence consumers will not even have to pay more for their bills.
Yet, the flexibility challenge needs to be addressed. Traditional ‘wisdom’ wants us believe that our power systems can only integrate a share of around 15% of variable renewable electricity. However, the experience from Germany is a different one. The record share of variable renewable energy in the German power system was 72% at noon of 23 August 2015 (at a total share of 84% RES). As more energy comes now from renewables, the hours when 60 to 70% of energy is derived from renewables are happening more and more often. But, in neither case, the power system suffered any major reliability issues.
So, what enables the German power system to cope with these high shares of wind and solar energy? Fortunately, power systems in general possess a lot of inherent flexibility: flexible conventional or biomass power plants, storage,and – most important – the grid. In fact, German system operators primarily use the grid for flexibility. The German grid is highly interconnected with European neighbours, and it always ranks among the top countries in terms of system reliability. However, contrary to common believe the distribution grids in Germany are not ‘smart’, but still depend on traditional technologies. A second important source of flexibility is the relatively large number of hard coal plants that have been retrofitted in recent years in order to increase their flexibility and serve as back-up capacities.
While it seems technologically feasible to operate power systems with high shares of variable renewables, there is a cost issue to be taken into consideration. As flexibility of the power system will become the key feature, overall system costs will depend on the ability of the entire system to cope with growing shares of variable renewables. It is thus crucial not to lock the system into an inflexible baseload pathway as this would unnecessarily increase costs in the long run. In other words: the more flexible the rest of the system, the lower overall costs.
India has launched its renewable programme and its contribution to the INDC also brings in the commitment to scale up renewable energy. We hope that India and Germany are able to collaborate on the huge opportunity to seize the power of clean energy- renewables provide the basis to position India as a leading nation in climate policy. Certainly, Germany will highly welcome and support India’s ambitions.
(The author is deputy executive director, Agora Energiewende German. The views expressed are his personal)