Case for proving battery storage viability for Tamil Nadu

Case for proving battery storage viability for Tamil Nadu

Viability assessment of Hybrid renewable Battery Storage Systems

Report by Climate trends and JMK Research

A new economic viability analysis reveals that renewable energy along with battery storage in Tamil Nadu is cost competitive with new coal power plants. The report finds the levelized cost of energy for a hypothetical hybrid renewable battery storage system for the state to be Rs. 4.97/kWh in 2021, which falls to Rs. 3.4/kWh by 2030. In comparison, cost of electricity produced from new coal power plants in Tamil Nadu is between Rs. 4.5 – 6/kWh.

The hybrid system is designed to cater to 1GW of solar and wind capacity in 2021 with 2 hours of battery backup, which increases step wise to a 4-hour backup by 2030. 

The research further highlighted that li-ion battery storage systems could also help reduce curtailment of renewable energy. Close to 50% of solar power in Tamil Nadu was curtailed since the lockdown in March 2020. Similarly, its curtailment of wind power in 2019 went up to 3.52hrs per day from 1.87hrs per day in 2018.

According to the analysis, the cost of hybrid renewable battery storage system is at parity with new coal power plants in Tamil Nadu. Moreover, in 10yrs time, incremental capacity addition would further drive down the cost by over 31%” said Jyoti Gulia, founder of JMK Research and Analytics. 

The analysis, tracks the the system from an initial capacity of 800MW of solar and 200MW of wind along with 500MWh of storage, that would cater to Tami Nadu’s average annual power demand for 2 hours per day from 2021 – 2023. Its capacity is augmented to 3 hours of daily backup for 2024-2026, and then 4 hours per day for 2027-2030. In the last year, the hybrid system would meet 29% of Tamil Nadu’s average annual power demand at a competitive LCOE of Rs. 3.4/kWh.  

It also puts into perspective that Tamil Nadu has 5 new thermal power projects in its pipeline over the next three years. The Cheyyur ultra mega coal power plant is the biggest of these projects with a tariff of Rs. 5 – 6/kWh, which would be 32% –  to 43% more expensive than the system modelled in the analysis.

Also, if this hypothetical, solar- and wind-powered storage system were to wheel all of its energy to Delhi, even after accounting for ISTS charges it could cover 100% of Delhi’s average yearly electricity demand by 2030 at an LCOE of Rs. 4.4/kWh. The system thus demonstrates that RE coupled with battery storage is a technically and financially viable option to building new coal capacity. At the same time, it would be a dispatchable source of power that addresses the grid integration of intermittent solar and wind power.

Click here to download the report

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