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Surging peak demand: As temperature soars, efforts underway to bring in idle capacity – EQ

Surging peak demand: As temperature soars, efforts underway to bring in idle capacity – EQ


In Short : As temperatures soar, there’s a surge in peak demand for electricity, prompting efforts to utilize idle capacity. With the strain on energy grids, stakeholders are mobilizing to tap into dormant resources to meet the heightened consumption.

In Detail : In FY24, August recorded the highest shortfall of .6 per cent, followed by .5 per cent in January, and .4 per cent in October.

In anticipation of a hot summer, which is set to push peak demand to a record 260 GW, the Ministry of Power instructed fifteen imported coal-based and all gas-based thermal plants to be operational during the coming months to avoid power outages.

India’s reliance on coal and gas to meet peak demand is more pronounced given the absence of an adequate energy storage infrastructure in the country, which can help store excess energy generated by solar and wind plants during non-peak hours and release it during peak hours. While India’s peak demand deficit has fallen considerably in recent years, insufficient energy storage infrastructure and rising temperatures could widen the gap moving forward, especially in the summer months.

Power ministry prepares

Even though India added a record renewable capacity of over 18 GW in FY24, the variability in renewable energy generation is putting pressure on base load capacity, including thermal, especially during evening hours of low sunlight and high demand.

On April 12, the power ministry invoked Section 11 of the Electricity Act, 2003 to instruct fifteen imported coal-based thermal power plants to operate at full capacity till October 15. “The government may specify that a generating company shall, in extraordinary circumstances, operate and maintain any generating station in accordance with the directions of the government,” Section 11 of the Act states.

The ministry had earlier invoked the section in March, 2023 in an effort to avoid load shedding in case of a sudden rise in demand. The instruction was extended multiple times, including in October, 2023, when the ministry asked thermal plants to remain fully operational until June 30, 2024. The latest move extends the timeline by another three and a half months.

Under the same section, the ministry has also instructed idling gas-based thermal plants to operate from May till the end of June, indicating its cautious approach towards avoiding power outages as the country braces for record-breaking heat waves. As per the India Meteorological Department (IMD), above-normal number of heatwave days is likely over most parts of the country till May, especially in states like Telangana, Andhra Pradesh, Karnataka, and parts of Maharashtra and Odisha.

Increase in renewable capacity

Even as the share of installed capacity of renewables like solar and wind has increased to nearly 29 per cent of total capacity in FY24, compared to 20 per cent in FY20, these sources of power do not have high capacity utilisation as they are variable in nature. The capacity utilisation factor (CUF) of a renewable energy plant indicates average output against installed capacity in a given time period. CUF depends on natural factors like irradiation and wind speeds, and also on the efficiencies of technologies used to harness solar and wind energy.

As per a NITI Aayog report, CUF for solar capacity ranges from 1.3 to 27 percent and for wind from 13.4 per cent to 32 per cent across Indian states. In comparison to solar and wind, capacity utilisation for coal- and lignite-based thermal plants, which is denoted by plant load factor (PLF), stood at nearly 69 per cent in FY24 up to February. Indeed, in FY24, the average PLF of all thermal plants in the country was the highest recorded in a decade.

To reduce reliance on thermal plants for meeting demand during peak hours, energy storage systems are used to absorb energy from solar and wind plants during non-peak hours, usually mornings, and release it during peak hours, usually late afternoons. By FY30, a NITI Aayog report estimates India’s energy storage requirement at approximately 60 GW, including 41 GW of battery energy storage systems (BESS) and 19 GW of pumped storage hydropower (PSH), requiring an investment of over Rs 2.4 lakh crore. India currently has an installed PSH capacity of 4.7 GW with an additional 2.8 GW under construction. In February this year, the Solar Energy Corporation of India (SECI) commissioned India’s largest BESS capacity of 120 MWh in Chhattisgarh.

Peak demand and supply

While the deficit between peak demand and peak supply has narrowed in recent years, from an average of -5.9 per cent between FY10 to FY19 to -1.5 per cent between FY20 to FY24, it could widen again if the surge in renewable capacity is not adequately complemented with energy storage infrastructure. The peak deficit measures the difference between peak demand and peak supply.

In FY23, the peak deficit stood at -8.7 GW, 4 per cent of the peak demand of 216 GW in the month of April. In FY24, peak demand increased to 243 GW in September but the deficit was contained at 1.4 per cent owing to a cooler than expected summer caused by unseasonal rainfall.

In terms of net electricity shortage, April recorded the highest shortage of 2 per cent followed by June and January at .6 per cent each in FY23. In FY24, August recorded the highest shortfall of .6 per cent, followed by .5 per cent in January, and .4 per cent in October.

Anand Gupta Editor - EQ Int'l Media Network