India can cut its overall cost of electricity in half and reach net zero before 2050 by developing a 100% renewable energy power system, according to a power system modeling study jointly carried out by global technology company Wärtsilä and the Finnish Lappeenranta-Lahti University of Technology.
The modeling shows that increasing the share of renewable energy in the overall installed power capacity from 25% today to 100% before 2050 can cut the cost of meeting electricity demand by 48%, from INR 6,000/MWh (US$81/MWh) in 2020 to INR 3,120/MWh (US$42/MWh) in 2050. This cost, also referred to as overall system cost, includes the levelized cost of electricity generation, the cost of energy storage, transmission interconnections, as well as the costs of curtailing surplus renewable generation.
Renewables, when paired with flexible generation technologies (thermal balancing power plants and energy storage), can improve the affordability of electricity while ensuring the reliability of system operations, according to the study.
Power demand in India is estimated to increase to 5,921 TWh (with 1,023 GW of peak demand), 340% up from 1,345 TWh in 2020. The modeling confirms India can affordably meet this increased load through renewable energy, aided by low-cost solar.
However, the study states the total system capacity must be scaled up to an unprecedented degree to serve this increased load through mid-day peaks and to charge energy storage resources such as batteries to offset intermittent renewable energy generation. It projects 4,000 GW of installed capacity is needed for a 100% renewable system, a 10-fold increase in the overall power capacity in 2020. Solar would make up 76% (3,076 GW) of this total installed capacity by 2050. This would also be supported by a total wind capacity of around 410 GW by 2050, combined with hydro and carbon neutral gas.
To achieve the projected solar share, new PV installations must rise by 885%, from 7 GW a year today, to 69 GW a year by 2035, rising to 79 GW a year between 2035 and 2050, according to the study.
Energy storage, thermal key to balancing
Wärtsilä’s modeling shows that flexibility through energy storage is key to achieve the cost-optimal renewable baseload system – to shift generation when it is surplus, during the day, to times when renewables are not available, during evening or night-time. Thermal balancing power plants, backed by battery energy storage, must also be deployed to manage sudden surges in demand or drops in renewable generation.
The modeling demonstrates that, by 2050, India would need some 99 TWh of storage capacity and a total of 187 GW of fast-start load-following gas engines to provide rapid grid balancing. Storage capacity includes storage in the form of both batteries and gas storage – mainly in the form of sustainable fuels (green hydrogen, methane, etc). Together, these technologies form the backbone of a reliable, cost-optimal power system for India.
“Increasing renewable energy could also generate major new revenues from hydrogen production, creating a technology market worth US$39.8 billion,” added the report.
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