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India could cut its electricity costs by nearly half by 2050 through solar energy, batteries and demand-side flexibility.
The solar-dominant system could cost $27 per MWh, significantly lower than current fossil fuel prices.
Balancing technologies playing a crucial role in managing supply and demand.
India could achieve a solar-dominant energy system by 2025 at a total cost of $27 per megawatt-hour (MWh). This is significantly lower than the 2019-2030 average wholesale price of $55 per MWh, according to a new report by the international think tank, the Energy Transitions Commission.
The report further suggested that the future costs of a high variable renewable energy system, like solar, are expected to be below the cost of today's fossil fuel-dominated system.
Of the $27 per MWh total cost, $12 per MWh will be allocated for generation, primarily solar, and $15 per MWh for balancing (almost short duration needs of up to eight hours). The balancing cost, which includes short, medium-long and ultra-long durations, involves range of existing technologies and approaches can provide this balance between energy supply and demand.
These balancing technologies include running dispatchable generation on a flexible basis to provide power when wind and solar supply is insufficient to meet demand. Dispatchable generation involves electricity generation resources that can be made available on-demand by power grid operators in response to market demand.
The second approach is interconnecting countries and regions which have a combination of different patterns of wind and solar supply, cheaper power generation or different demand profiles through the day. The third and fourth approaches include deploying different storage technologies and demand-side flexibility in residential and industrial sectors to shift demand away from peak hours, reducing balancing needs and grid costs.
Other tropical countries like Mexico and much of Africa, too, can scale up solar systems to cut electricity costs by more than half to $30-40 per MWh by 2050, the report highlighted.
“Costs in China are expected to be as low as in India, given existing industrial capacity and established supply chains for equipment and installation, and the potential for interconnection within a continental scale country with multiple climatic zones,” the report read.
The report noted that short duration balancing is likely to be primarily provided by lithium-ion or sodium-ion batteries or via demand-side flexibility.
Further, battery costs per kilowatt-hour storable have dramatically dropped over the last three years and is expected to fall further in the future.
Some forms of demand-side flexibility essentially cost nothing, since no investment in equipment is required to enable the demand shift, while others may require new investment in vehicle to grid technology. The report estimated that the cost for short-duration balancing range from $0-150 per MWh in 2035, falling further to $0-75 in 2050.
Moreover, there are also medium-long duration (8-50 hours) and ultra-long duration (more than 50 hours) options. The former deals with day-to-day or week-to-week balancing needs, influenced by changing weather patterns, weekends or temperature-driven load variations, while the latter involves seasonal or multi-week imbalances during low wind periods, coinciding with peak winter electricity demand.
Medium-long duration balancing options is likely to be provided by a more diverse set of technologies such as lithium-ion based solutions (which have higher cost per kWh at this duration), compressed air (A-CAES), pumped hydro and thermal storage. Long-distance transmission to interconnect regions within a country or between countries and hydropower plants could be a solution, the report notes. The costs could range from $15-225 per MWh in 2035 and with some further reduction by to $15-190 in 2050.
The ultra-long duration balancing solutions are likely to be the most expensive. These include carbon capture and storage in plants, which continue to burn natural gas and the cost could range from $200-400 per MWh.
While the report estimated that India (among sunbelt countries) does not need medium-long duration (8-50 hours) and ultra-long duration (50+ hours) balancing options, other countries like Morocco, Spain, Chile, China, United States, United Kingdom and Japan, which have mild, Mediterranean, or mixed climate or located wind belt regions, might need them to a small degree.
Currently, the absolute cost of several balancing technologies is much lower in China than in other countries, with Indian costs also lower for some technologies like pumped hydro, which stores and generates electricity by moving water between two reservoirs at different elevations.
The report, however, estimated that the world will have to make significant investments in grids due to rapidly growing electricity demand and rising wind and solar generation shares.
“Multiple technologies, including nuclear and geothermal, may play a role in zero-carbon power systems. But wind and solar will be the dominant source of power in most countries, providing 70 per cent or more of electricity at costs at or below today’s fossil-based systems,” Adair Turner, chair of the Energy Transitions Commission, said in a statement.
In sunbelt regions, the collapsing cost of solar photovoltaics and batteries make the growth in green electrify supply cheaper and more rapid than seemed feasible 10 years ago, Turner said, adding that wind belt countries can also achieve cost-effective decarbonisation by leading in offshore wind, long-duration storage and grid innovation.
Final summary: A report by the Energy Transitions Commission suggests that India could significantly reduce its electricity costs by 2050 through the adoption of solar energy, batteries and demand-side flexibility. The solar-dominant system is projected to cost $27 per MWh, which is considerably lower than current fossil fuel prices. Balancing technologies will play a crucial role in managing supply and demand, enabling a more efficient energy system.