Business & Investment

Gas can accelerate the shift in renewable energy

The world’s energy system is changing at a scale and pace never experienced before. The recent announcement by Prime Minister Narendra Modi at the COP26 Summit heralds the arrival of a new domestic investment climate. Robust infrastructure needs to be developed to reach net zero emissions by 2070, reach 500 GW of non-fossil fuel capacity, and meet 50% of energy requirements from renewables by 2030. is.

The idea is to move towards a more resilient energy future that can be self-sustaining and dynamically shift to address the output gap.

Technically, as wind and solar penetration increases, the Indian grid becomes more susceptible to the complexity of frequency and voltage fluctuations. This is caused by an unexpected and sudden loss of power generation, which reduces the inertia of the system. These natural and anthropogenic events can also lead to grid instability and power outages.

Given the nature of each technology (ie solar, wind, gas, coal) and the dynamic power supply and demand situation, grid operators can identify the right technology to help manage the grid and support long-term needs. It’s wise. .. According to the IEA, India has higher requirements for power system flexibility than most other countries in the world.

At the global level, decarbonization of the power sector is one of the top priorities for countries moving towards net zero. India must make this transition in a smooth, reliable and affordable way.

Coal rules

In India, as of 2020, about 60% of electricity was generated from coal-fired power plants. From an environmental, technological and economic point of view, the addition of new coal seems unsustainable. Recognizing this, governments around the world have decided to oppose significant investments in building new coal-based power plants while moving forward to achieve their respective emission reduction commitments.

But more familiar, some policy measures continue to promote high-carbon emission fuel types for power generation, blinding to the benefits of gas power generation. For example, according to the Draft NEP (National Electricity Policy) 2021, new coal-fired power plants will continue to be added and the deadline for coal-fired power plants to comply with emission standards will be postponed.

Even with positive bids like Round-the-Clock (RTC) electricity, coal is still the first choice and the valuation is done in one dimension based solely on the weighted average rate. It does not take into account the environmental and systematic attributes of technologies such as ramplates and turndowns. A successful transition to renewable energy requires the right partners for wind and solar. This can offset the disadvantages and support the smooth operation of the grid. Gas-based power generation is perfectly suited for this situation.

It was a lost decade for gas power generation, mainly due to questions about gas availability and affordability. However, the value proposition that gas power can provide with flexibility, quick start-up, deeper turndown levels and faster ramp speeds integrates more renewable energy into the national grid, seasonal and peak times. It is an important factor in meeting power demand.

Gas turbine technology-based power generation can balance grid and power supply at a competitive price, both stand-alone and bundled with RE power.

Green hydrogen has received a lot of attention lately, and there is a strong demand to reduce its production cost and make it affordable. It is encouraging to see the government aim to increase its share of natural gas in the country’s major composition from 6% to 15% by 2030. Investing in the construction of a gas pipeline network and new gas import facilities to link all states with those currently in operation Six gas terminals address availability concerns.

In the short term, there are some important issues that need to be addressed.

short In order for gas power plant developers to be able to procure gas at a reasonable price, a PPA (Power Purchase Agreement) period is required to adjust the gas contract. Today’s gas contracts are unavailable for 25 years, and long-term contracts run the risk of increased pricing uncertainty that impacts final electricity costs.

that is It makes sense to link the CERC Escalation Index with the least volatile sources such as Henry Hub to reflect the market and benchmarks.

Gas infrastructure It is available and not fully utilized. It would be encouraging if regulatory and policy interventions could help encourage the use of this infrastructure.

Gas-based hybrid power plants could be the right technical solution to support and accelerate the transition to renewable energy in India. These two seemingly different technologies could have the most complementary characteristics of being able to significantly decarbonize the sector and continue to power the grid at an affordable price while still supporting the grid in its operation. there is.

Writer is CEO of GE Gaspower South Asia

Gas can accelerate the shift in renewable energy Gas can accelerate the shift in renewable energy

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