India is on the cusp of a transformation in power sector. Institute for Energy Economics and Financial Analysis (IEEFA) report predicts less reliance on gas for peak power, despite India’s record high of 240GW in May 2024, underlining the need for strong solutions.
The report pinpoints the economic drawbacks of gas-based power. Limited domestic gas supplies and expensive imported Liquefied Natural Gas (LNG) inflate costs. IEEFA suggests allocating more domestic gas to power plants for immediate cost reduction. Even partial allocation of domestic gas can help lower tariffs to Rs 5.83 per unit, compared to Rs 13.70 per unit
However, the future lies in renewables. The government’s strategy emphasizes advancements in grid-scale energy storage and firm dispatchable renewable energy (FDRE) solutions. FDRE tenders comprised a significant 17% of the 69GW RE tenders issued in 2023-24, showcasing a strong push for clean energy integration.
Interestingly, peak demand patterns are changing in India. IEEFA notes a shift towards daytime peaks, where solar can play a starring role. Additionally, these peak periods often coincide with months of high wind power availability.
In conclusion, India can use imported coal and gas to temporarily address power shortages, but solutions like solar, wind, and energy storage are needed for a greener long-term future.
Reference- Mercom India, Economic Times, Institute for Energy Economics and Financial Analysis (IEEFA)