India awards world’s largest renewable-plus-storage power project, says GlobalData

Last week, Solar Energy Corporation of India (SECI), a company formed under Government of India for promoting renewable energy and storage in the country, announced the result of reverse auction for the world’s largest renewable-plus-storage power purchase tender. The tender sought a capacity of 1200 MW, with firm supply of 600 MW for six hours daily during peak demand hours on day-ahead on-demand basis. It required a storage capacity (pumped hydro and battery) of at least 3000 MWh, says GlobalData, a leading data and analytics company.

Greenko emerged as the lowest bidder at weighted average tariff of INR 4.04/KWh (USD cents 5.656/KWh) for 900 MW capacity from its pumped storage projects with quoted peak tariff of INR 6.12/KWh (USD cents 8.568/KWh). Renew Power, the second lowest bidder, won 300 MW capacity at weighted average INR 4.30/KWh (USD cents 6.02/KWh), with lowest ever renewable-plus-battery quoted peak tariff of INR 6.85/KWh (USD cents 9.59/KWh). The tariffs are fixed for 25 years.

According to GlobalData, these renewable projects coupled with pumped storage and battery offer lowest ever peak tariff globally. These tariffs are lower than most recent thermal projects rewarded in the country, even much lower than the commercial and industrial consumer tariffs in the country.

Tarun Bhutani, Project Manager at GlobalData, comments: “Declining cost of wind and solar installations has helped in increasing the percentage of renewable power in global power mix and has pushed the need of energy storage forward. Low-cost storage is the key to enable renewable power to compete with fossil fuel based electricity on a cost basis. Energy storage can help a utility by reducing the need to generate electricity and avoiding transmission costs.”

With decreasing cost of storage, wind or solar coupled with storage systems would be reliable in meeting grid demands such as providing base-load power and meeting peak-hour spikes in demand for few hours.

Among battery technologies, lithium-ion batteries provide the best option for four-hour storage in terms of cost, performance and maturity of the technology. The price of lithium-ion batteries has fallen by about 80% over the past five years, enabling their integration with solar power systems and their share in the utility-scale energy storage is growing rapidly.

Still, challenges like materials scarcity, rise in competitive demand from electric vehicle market and limitation of short-duration storage poses critical need to develop low-cost, long duration technologies in energy storage. For long duration, pumped-storage hydropower and compressed-air energy storage are considered the best options.

Bhutani concludes: “The price discovery through this tender clearly projects India as a favourable market for Gigawatt-scale renewable plus storage systems and promotes forward the integration of storage technologies to provide renewable yet firm and affordable power.”

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