India has announced a target of increasing the total renewable energy (RE) installed capacity from about 34GW in 2015 to 175GW by 2022 (including 100GW solar and 60GW wind capacity). This study assesses the technical feasibility of integrating 175 GW of renewables capacity in the Indian electricity grid, ascertains its impact on power sector investments and operations, and quantifies the incremental cost of such large-scale RE grid integration. The analysis is conducted by simulating economic dispatch of the power system using an industry standard production cost model, PLEXOS.
The study finds that 175 GW of RE can be reliably integrated in the Indian grid by 2022 at an incremental wholesale electricity supply cost (at region boundary) of about Rs 32,000 Crore/yr (increase in average wholesale supply cost of Rs 0.14/kWh to Rs 0.22/kWh or 4 to 6% over the baseline). However, the study has not considered the significant environmental and energy security benefits of the RE generation. The study finds that only moderate levels of additional balancing resources would be necessary (about 2 to 10 GW of additional gas or other flexible capacity). This is mainly because of the complementarity between wind and solar generation and the regional diversity in load and RE generation. The study also finds that if 175GW RE capacity is added, significantly less coal capacity is required than planned to minimize total supply costs and avoid lowering of the capacity factors of the coal power plants. Also, there would be a reduction in coal imports by nearly 75% by 2022.
The study recommends that the following strategies will likely limit the cost increase due to RE penetration to the levels found in the study: (a) Transmission corridors, especially from/to the Southern region, are strengthened and used in both directions, (b) Cost of wind energy is reduced by developing highest quality wind resource through competitive bidding, (c) Power system dispatch is optimized at the regional level, and (d) Several market, policy, and regulatory mechanisms are in place for moving power across regions more freely.
This analysis uses several simplifying assumptions especially regarding the transmission system. Significant refinement to this analysis would be necessary for actual power system planning purposes, which leaves significant scope for future work.