A recent auction for a 20 MW solar project integrated with 28 MWh storage capacity in Andaman & Nicobar Islands has been completed by NLC India Limited, a government of India owned coal mining company. This is one of the first utility scale storage tender in India that’s results were announced. The tender included provision of complete O&M and EPC services for twenty-five years. The winner of the auction was Mahindra Susten who was also the lowest bidder with a final all-in-price of Rs 288 crore (USD 46 mn).
There had been two other public-sector companies, the Solar Energy Corporation in India (SECI) and NPTC that were to award similar projects as part of the government’s initiative to encourage battery-backed solar power project. However, theses tenders were scrapped after inviting bids.
The main advantage and most obvious application of using solar cum storage plant is that it replaces diesel fired power, this makes power generation more economically viable and environmentally friendly. The utility scale storage adoption in India is expected to be slow as DISCOMs are highly cost sensitive and lack awareness of its technological potential.
Andaman & Nicobar Islands is a group of islands in the Bay of Bengal with an aggregate peak demand of 67 MW and a total population of 400,000. The main power source of these islands comes mainly from diesel generator sets, hence replacing them with integrated solar cum storage plants would be highly desirable from an economic and environmental perspective. As seen in the US, Australia and elsewhere, replacement of diesel fired power is the most obvious application for solar cum storage plants. Although there is a very high cost for storage, this is not a limiting factor due the very high cost of diesel fired power of over INR 15/ kWh (USD 0.23).
The NLC tender has fairly stringent technical specification with performance warranties and associated penalties for full 25-year duration of the contract. It is encouraging to see this tender progress; however, India is doing very little to capture energy storage opportunity. The underlying problem is a mix of high cost sensitivity and lack of awareness about technical potential of storage. DISCOMs believe that they can use a mix of power cuts and curtailment to balance power demand and supply rather than committing to the use of expensive storage solutions. Our view is that storage will need 3-4 years of techno-commercial advancements before finding scale in India.
Source – The Economic Times and PV-TECH