Case of Maharashtra State Power Generation Co. Ltd. and Maharashtra State Electricity Distribution Co. Ltd. seeking approval for Adoption of Tariff rate of Rs 3.10/kWh for Long Term Procurement for 7 MW Solar Project under Mukhyamantri Saur Krishi Vaahini Yojana and for approval to the deviations sought in the Draft PSA and PPA.
There are multiple reasons for power shortages and load shedding, ranging from cost considerations to a regulatory regime that does not incentivise power generation when it is needed. Another contributing factor is that overall utilisation of coal plants today is currently between 50-60%, according to a recent CEA study.
For example, last year Maharashtra State Electricity Distribution Company (MSEDCL) was able to supply only 15,700 MW of power, while the demand was 17,930 MW, leading to a deficit of around 2,200 MW due to coal storages. Similarly, in Rajasthan, the power output at the Surajgarh Thermal power station dropped to 730 MW despite having production capabilities of 1500 MW, while at the Kota thermal power plant, output has decreased by almost half to 600 MW as opposed to its capacity of 1240 MW.
In Maharashtra, there are two peak periods during the day: one in the afternoon, and a second from 6 to 10pm. These peaks in demand are currently served by liquid and open cycle gas-based peaking power plants. Alternatively, these peaks may not be met at all, and the load is “shed” by the DISCOMS.
For mid-day peaks like the first one in Maharashtra, solar power is an obvious solution. Solar power plants produce at their peak during this period, and also generate the most power during summer, when power demand is highest. Solar power is now very cost-competitive with coal and other forms of renewable energy. In recent power auctions in India and across the world, it has been shown to be the cheapest form of power available today.
While more attention has been paid to large-scale solar power plants, rooftop solar plants are actually friendlier to the grid. Any large-scale power plant, whether coal, wind or solar, require installation of transmission lines to transmit the power. Rooftop solar plants, on the other hand, require no new infrastructure outside the building where they are installed. By supplying power directly to the load, their effect on the grid is actually the same as a reduction of power consumption.
While DISCOMs see solar power as competition and may seek to block or limit its implementation, the net effect on the grid is positive, as it reduces the need for transmission upgrades and helps to meet power shortages.
Nay-sayers sometimes point to renewable energy like wind and solar as a partial solution at best, which cannot generate power whenever it is needed. However, a recent study by the Lawrence Berkeley National Laboratory in the US showed if the US were to draw 50% of its power from wind and solar power, the net effect would be to reduce the average cost of electricity, even with currently available technology. Other studies in countries with widespread rooftop solar plants have shown that these plants actually improve the reliability of the grid.
As battery costs continue to decline, adding energy storage and electric vehicles to the grid will further mitigate the problem of supply/demand mismatches, and will enable even high levels of renewable energy penetration. There is already a lively debate in energy circles as to whether energy storage, paired with renewables, will soon replace gas-based peaking power plants as the lowest-cost solution to peak power deficits.
So, as India looks to truly achieve energy access for all, 24 hours a day and 365 days a year, it would do well to look to emerging clean technologies which are already cost-competitive. While extending the electrical grid to all villages and households is important, so is filling those wires with a continuous supply of power. Rather than expanding past business model of ever-expanding grid infrastructure and polluting power plants, why not do this with reliable, clean and decentralised electricity like rooftop solar.
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