Renewable power challenge to grid stability
India is increasingly harnessing renewable power sources like wind and solar to contain the carbon footprint of its power sector. But the disadvantage with them is they are unreliable, infirm sources of power and can cause huge volatility in the grid, especially during the peak period when electricity demand goes up by 15% to 20%. Unless new market instruments like time-of-use pricing are introduced to elicit demand-based response from customers, supplying renewable power to the grid on a large scale might not be feasible.
That would, in turn, require a well-developed retail electricity market with enough choice for customers to switch over to competing suppliers. The government can act as an enabler and provide requisite regulatory and policy support.
“Greater power system flexibility will be essential for well-functioning markets to continue delivering efficient and reliable electricity services while deploying variable renewable generation to meet decarbonisation goals. Effective deployment of demand response could greatly increase power system flexibility, delivering greater electricity security and market efficiency,” says a recent study “Empowering Customer Choice in Electricity Markets” released by the International Energy Agency.
India’s peak power shortfall is estimated at 12%. The country’s electricity demand has outpaced supply despite best efforts by the government to expedite capacity addition. Now the country is focusing on harnessing its solar power generation capacity to reduce the demand-supply mismatch. However, renewable power can present serious challenges to grid management due to its infirm nature.
“Demand response is critical for efficient operation and development of electricity markets, and may be the key to unlocking the power system flexibility needed to deliver cost-effective, reliable and sustainable electricity services into the future. Greater demand response would provide a very cost-effective source of flexibility in the short, medium and longer terms if its potential could be more fully exploited,” says the study.
At the same time, the increasing penetration of variable renewable generation required to decarbonise electricity systems is magnifying power system volatility. Recent trends reinforce the need for greater real-time power system flexibility to permit larger-scale integration of variable renewable generation in a manner that does not unduly compromise the efficient and reliable operation and development of power systems as they make the transition toward carbon neutrality.
From a sustainability perspective, demand response has the potential to greatly increase the volume of real-time flexible resources available to support large-scale integration of variable renewable generation. It also offers the potential to smooth volatility in electricity demand, which may reduce overall carbon emissions by replacing carbon-intense forms of peak generation with lower-emitting generation options. In the longer term, greater demand-side flexibility could be reflected in more efficient forms of electricity use.
Over time, improvements in end-use energy efficiency could result in a permanent reduction in demand compared to previous levels in the absence of demand-side flexibility. This may result in a permanent reduction in carbon emissions where the power saved would have been produced by fossil fuel generation. The potential benefits associated with more effective harnessing of demand response are too substantial to be ignored.
Advanced metering is seen as a key component of the infrastructure to more efficiently manage growing peak use, encourage greater energy efficiency, and facilitate more effective deployment of renewable energy technologies. Advanced metering also facilitates the integration of larger amounts of variable renewable generation and distributed generation.
“Governments have a key role to play in developing and implementing the legal, regulatory and market frameworks which empower customer choice and accelerate the development and deployment of cost-effective demand response. Effective government leadership would create an environment where the considerable potential of demand response could be realised to help increase power system flexibility and electricity security, eventually achieving decarbonisation goals at least cost,” the study says.