The government is contemplating to introduce Battery Energy Storage System (BESS) in the state power sector. This will integrate renewable energy sources into the grid baseload and provide backup power for use in times of need. With this, the government expects to reduce the burden on the people from buying electricity at a higher price during peak demand hours.
For this, companies are going to be selected for setting up 2,000 megawatt battery energy storage system units through competitive bidding. During the financial year 2023-2024 during peak demand (6 am to 8 am and 7 pm to 11 pm) on some days, about 680 million units (MU) of electricity is left due to less consumption.
At other times the discoms have calculated that an additional 600 MUs have been purchased. Discoms say they had to purchase 750 to 1000 MW of power in the open market to accommodate the additional demand. In some cases, it is impossible even to buy at a high price.
Due to the high demand, the discoms, which spent an average of Rs.7.50 to Rs.8.50 per unit of electricity, passed the burden on the public in the name of fuel adjustment charges. In this background, the government hopes that if BESS storage electricity is used for at least two hours during peak demand, the burden of purchasing additional electricity will be reduced at least to some extent.
The government has entered into PPAs with 4,300 MW solar and 4,100 MW wind power generation companies in AP. Another 7,000 megawatts of solar power is coming through the agreement with Seki. The state government is planning to make another 3,725 megawatts of solar power available under the central government schemes PM Kusum and PM Surya Ghar Awas Yojana.
Excluding all these, the existing renewable power PPAs have a surplus of 450-500 MW during off-peak demand. Officials say that the cost per unit of electricity storage in BESS is around Rs.3 to Rs.3.70, and this cost will decrease gradually as lithium prices decrease.