Several reasons are offered to downplay the prospects of renewable power generation technologies, particularly those that rely on solar and wind, as production from both is uncertain and variable. The two frequently heard arguments against them (utility-scale or distributed) are that these technologies contribute little to the firm capacity that electric grids need to maintain reliability and that their presence and operation in the grid impose excessive stress on the remaining plants.
This issue has resurfaced as the Power Division and NEPRA are using similar reasons as a pretext to clamp down on net-metering connections by drastically cutting buyback rates and making the process of obtaining new net-metering connections cumbersome and difficult. There is hardly any substance to their concerns.
Net-metering, net-billing, and similar policies have always been considered interim or stop-gap arrangements to help nascent renewable technologies take a foothold in the energy market, which is skewed towards fossil-fuel-based generation. Revising or terminating them is neither unexpected nor unprecedented. However, the way this is being done in Pakistan and the reasons being used to do it raise serious doubts about the motive behind this move.
The reality is that distributed solar has been expanding rapidly in the country lately and has started to pose a serious threat to the outdated centralised electric grid. Their mantra of recovery of fixed costs and shifting of these costs to non-users of the net-metering scheme is nothing but a hoax to perpetuate their control over the monolithic power sector, which at present is rotten to its core.
Speculations are rife, and different sources place varying estimates on the quantum of distributed solar in the country, ranging between 33 and 46 GW. However, we will go with a conservative but official estimate as quoted by Power Minister Awais Leghari on the floor of the National Assembly last Thursday, that distributed solar capacity in Pakistan had reached 20 to 22 GW, but he also clarified that only 6 GW of this capacity was on net-metering.
Solar and wind both have some limitations, no denying. Their presence and operation in the grid (both utility-scale and distributed) certainly pose new challenges. But nothing technical or financial cannot be managed by careful planning and operation. We will revert to this point shortly, but let us first understand the context.
Most of the complexity (and cost) in the electric grid is due to consumers’ demand (or load), which varies randomly over time. Every day, it rises from a minimum to a crest and then returns. The minimum demand, maximum demand, and the way it rises and falls can vary from day to day and system to system, but the pattern remains largely similar. Consumers’ electricity demand is generally classified as “base load” that remains on the system round the clock, “peak load” that comes on for a few hours in the year only, and “intermediate load” that falls in between.
Numerous studies from around the world show that if properly planned, deployed, and operated, renewable energy schemes can minimise or even eliminate costly, import-dependent thermal generation and transmission needs
Electricity has some unique constraints. A major one is that it must be produced and delivered the moment it is demanded because its storage in any significant amount and for extended duration has been both difficult and expensive. Suppliers must have resources available and ready to serve demand, anytime and anywhere in the grid. Recent developments in battery storage technologies have started to ease this constraint somewhat, but we are not there yet.
Different technologies have evolved to serve electricity demand reliably and at a minimum cost. We have high upfront but low fuel cost plants like coal and nuclear on one hand, used primarily to serve base load. We have low-upfront but high fuel cost plants like combustion oil and gas turbines and diesel generators to serve peak load. And a host of other technologies to serve intermediate loads.
Multiple considerations go into working out the final portfolio of power plants to serve demand. Cost is a common concern, but is not the only one. Other factors that influence the above selection include a candidate plant’s service function, operational flexibility, construction time and life, environmental footprint, industrial development and job creation, self-reliance, and many more.
Historically, electric grids had large and central-station power generation plants that operated in synchronism with each other at a single nominal frequency and a set of voltages to suit the end-use. Other than cost, fuel supply for them was almost guaranteed. These plants are considered “dispatchable” because grid operators can call them to service whenever needed, except when they are down for maintenance or for some technical problems.
The situation changes when variable renewable energy (VRE) plants are added to the system. Now, in addition to the random variation in demand and generation availability, a new source of uncertainty creeps into the equation, that is, the intermittency and variability of sunlight or wind. VRE plants (of any size) are non-synchronous and connect with the grid via power electronic interfaces. They cannot be operated like conventional generators and are therefore considered “non-dispatchable”.
The simplest way to make a VRE plant dispatchable is to add on-site storage with it. The only issue is that it adds substantially to the plant’s costs, often as much as 100%. Other techniques can also serve this purpose, for instance, by building extra quick-start and fast-response conventional plants, by building additional flexibility in the grid, by dispersing these plants over wider areas to spread the risk of unavailability of the source, by seeking regional integration of autonomous grids, and by influencing electricity demand to align it with the timings of VRE plants’ availability.
Economy-of-scale in generation technologies, benefits of interconnection among them, and having no other alternative, consumers had no choice but to remain tied to the grid regardless of its cost, reliability, and quality of service. Breakthroughs in the costs of photovoltaic and battery storage have disrupted this century-old balance.
The traditional approach to electricity supply and delivery through the centralised grid is no longer viable. Consumers now have a choice. They can meet their demand by generating at their own premises to save monthly bills, and can even earn money by providing any excess electricity back to the grid.
A sea change is needed in the mindset of those who control the monolithic power sector empire. They cannot continue to treat consumers as captive to their outdated thinking and managerial practices, and, sadly, as a dumping ground for their poor governance, mismanagement, and inefficiency.
Numerous studies from around the world show that if properly planned, deployed, and operated, renewable energy schemes can minimise or even eliminate costly, import-dependent thermal generation and transmission needs.
Distributed solar (behind-the-meter or interconnected with the distribution system) offers many benefits to the grid, consumers, and the country. They take no extra space, require no investment, O&M, or fuel costs, need no long-term (take or pay) contracts, and add no noxious pollutants. If the local distribution company joins hands with prospective prosumers within its jurisdiction and can guide them in sizing, designing, and operating their systems properly, it can provide substantial relief and benefits not just to prosumers and the grid but society at large.
Options and opportunities abound to manage the uncertainty and variability of VRE plants. The problem is not in any inherent limitation in VRE technologies or those who use them (net-metering or not). It is in the resistance by the beneficiaries of the status quo to any effort that has even a trace of disturbing their old and comfortable routines. We direly need a new legal umbrella, regulatory framework, and business operating model to provide a level playing field and a fair deal to not just distributed solar, but all similar technologies.