Relevance: GS2-SEC3: Alternative Sources of Energy

Introduction

• India is witnessing increasing power instability due to the rapid expansion of renewable energy without matching storage capacity.
• Power shortages are expected to rise sharply in May and June, with thermal power facing stress during non-solar hours.
• The crisis is worsened by past policy decisions to scale down thermal capacity expansion, making energy storage solutions crucial for grid stability.

1. Causes of the Looming Power Shortage

• Rapid Renewable Expansion Without Storage Infrastructure
  • India’s non-hydro renewable capacity has doubled in five years, now at 165 GW, but storage capacity remains low.
  • Solar and wind energy only generate power intermittently, causing gaps in supply during non-solar hours and peak demand periods.
• Thermal Power Squeeze in Non-Solar Hours
  • Coal-based power remains the backbone of India’s electricity grid, with a capacity of 220 GW.
  • However, states scaled down coal plant expansions over the last decade, leading to higher reliance on solar and wind.
  • Hydropower shortages and delays in new projects have further strained supply during peak demand.
• Policy Missteps and Regulatory Issues
  • The unwillingness of states to hike retail electricity rates has worsened the financial crisis for state distribution companies (discoms).
  • Regulatory bottlenecks in coal-based power plant expansion have limited capacity growth.

2. Projected Demand and Grid Instability Risks

• Power demand has surged from 169 GW in 2018-19 to 250 GW in 2024-25 and is projected to reach 270 GW soon.
• High summer demand coupled with low wind generation in March-April is expected to cause serious grid instability.
• The National Load Despatch Centre (NLDC) has warned of potential shortages in May, June, and July 2025, particularly in non-solar hours.

3. The Role of Energy Storage in Grid Stability

• Battery Energy Storage Systems (BESS)
  • BESS can store surplus power generated during the day and supply it at night or during demand spikes.
  • India needs 205 GWh of BESS by 2030, but current development is far below this requirement.
  • Recent tenders for 3.6 GW of BESS show that storage projects are slowly picking up pace, but more investment is needed.
• Pumped Storage Hydropower (PSP)
  • PSP can store energy using excess power during off-peak hours and release it during high demand.
  • India has 5 GW of PSP capacity under construction, but the current pipeline is insufficient to meet future demands.

4. Policy Measures and Emergency Interventions

• Short-Term Solutions for 2025
  • The NLDC has suggested invoking emergency powers to mandate coal-based plants to run at higher capacity.
  • Encouraging higher electricity imports from Bhutan and Nepal during peak demand months.
• Long-Term Structural Reforms
  • Mandating storage solutions in new renewable energy projects to ensure grid reliability.
  • Improving coal plant efficiency and reducing financial distress in discoms to make them more responsive to demand fluctuations.
  • Expanding domestic manufacturing of battery storage systems to lower costs and ensure wider adoption.

5. Way Forward: Strengthening Energy Security

1. Accelerate Battery Storage Deployment – Fast-track BESS implementation to manage renewable fluctuations.
2. Ensure Grid Stability through Diversification – Maintain a balanced mix of thermal, hydro, solar, and wind power.
3. Revise Coal Plant Expansion Policies – Assess state-wise energy demand and allow for necessary coal-based capacity expansion.
4. Strengthen Regulatory Oversight on Renewable Integration – Ensure energy storage is mandated in future solar and wind projects.
5. Enhance Regional Power Cooperation – Leverage cross-border electricity trade to meet demand during shortages.

Conclusion

• India’s rapid renewable expansion must be matched with robust energy storage solutions to prevent power shortages.
• Short-term emergency measures will help manage immediate summer demand, but long-term energy planning is crucial to ensure grid stability.
• A balanced energy mix with strategic investments in storage technology will secure India’s power future.

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