RE Integration: Gas power a way out of RE woes

By: |
March 1, 2021 4:00 AM

Gas-based power, which can be ramped up and down quickly, unlike coal-based electricity, offers a good option for offsetting the vagaries of renewable energy

He adds, “we need all kinds of options to bridge this deficit, ranging from hydro power to natural gas to batteries, because it is just as important for the power supply to be secure as it is clean”.He adds, “we need all kinds of options to bridge this deficit, ranging from hydro power to natural gas to batteries, because it is just as important for the power supply to be secure as it is clean”.

That renewable energy (RE) faces challenges like uncertainty and intermittency of supply, making electricity load management units across the country reluctant to draw it, is well known. What is less known is the role gas-based power—of which India has under-utilised capacity—can play to smoothly integrate RE in the grid system, given that it can be ramped up and down much faster than other conventional sources.

To put this advantage gas generation enjoys into perspective, while the ramp-up rate for coal-based power plants is around 2% per minute, it is as high as around 6% for gas-based power plants. This was evident during the solar eclipse on June 21 last year when hydro and gas generation had to be ramped up by 30% and 13%, respectively, to make up for a 28% fall in renewable power. Later, when RE was ramped up by 37%, hydro and gas power supply could be immediately brought down by 18% and 17%, respectively, with coal-based power not being of much use in load adjustment.

While there is the option of using storage systems to get round the problem of uncertainty that renewable energy faces, these continue to be expensive. Though storage costs have come down considerably over the years, it still works out to be prohibitively expensive to supply storage-based renewable power to financially weak power distribution companies (discoms).

Another factor in favour of gas being used to shore up renewable supply is the large gas capacity standing idle in India owing to fuel supply issues. The 24,900 MW of gas-based power capacity the country has operated at average utilisation levels of 26% in the April-October period of this fiscal. Around 12,000 MW of gas plants are stressed assets, 6,000 MW did not generate any power in this period, while more than 3,600 MW operated at a plant load factor of below 15%.

Elaborating on the phenomenon, Fatih Birol, executive director of the International Energy Agency (IEA), tells FE, “flexibility is critical as far as RE is concerned. Our numbers show that peak electricity demand is reached in the evening when there is no sun, causing a mismatch between power demand and supply from solar.” He adds, “we need all kinds of options to bridge this deficit, ranging from hydro power to natural gas to batteries, because it is just as important for the power supply to be secure as it is clean”.

Though it is touted as one of the cleanest energy sources, the share of electricity from gas-based power plants remains less than 4% in India. The average plant load factor (PLF) of India’s gas-based power plants increased by only three percentage points in the April-October period even though spot LNG prices fell by about 22% y-o-y. On costs, Deepesh Nanda, CEO, GE Gas Power South Asia, says that with the latest technology, the variable cost of gas-based power at 62% plant efficiency can be around Rs 3.6/unit even at gas prices of $8/mbtu, allowing it to compete with other conventional sources.

Industry watchers say serious policy intervention is required to salvage India’s gas power plants which, in turn, can make renewable energy more attractive. “Gas should be bundled with renewables for supply of firm power, and coal as a source of energy should not be allowed for such bundling,” a senior official of a gas power generator says on condition of anonymity. Apart from the long-standing demand of the industry to bring gas under GST, preferably in the 5% slab, gas plants would benefit if, like coal, there was a separate allocation bucket of domestic natural gas for the power sector.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Cairn offers to forego USD 500 million if India agrees to pay principal due
2Retail, hospitality enterprises face shutdown as lockdowns hit business
3Senior living a young market