India's Solar Dilemma: Abundance by Day, Scarcity by Night

India's power grid faces timing challenges rather than capacity issues, as highlighted in a report by the Economic Advisory Council to the Prime Minister. With solar energy plentiful during the day but scarce at night, the need for flexible solutions and better energy storage is critical.

India's power system is no longer hindered by generating capacity; its real struggle lies in generating electricity at the right time. A recent paper from the Economic Advisory Council to the Prime Minister (EAC-PM) reveals a shift in the grid's defining issue, moving from capacity to flexibility. Market signals increasingly highlight the stark timing mismatch of solar and non-solar hours.

According to the EAC-PM, the first indicator of this imbalance is seen in electricity prices. The intraday price spread between solar and non-solar periods has dramatically expanded, with a peak-to-trough ratio nearing nine. This disparity suggests power is abundant and cheap during peak solar production in the day but turns scarce and costly once the sun sets. Despite market price ceilings, evening shortages prevail.

The reliability of the grid also reflects this issue, as failures to meet demand are notably higher during non-solar hours. While solar energy copes during the day, the lack of flexible resources to quickly ramp up after sunset exacerbates grid stress. Additionally, significant volumes of clean solar energy are being wasted due to curtailment, unable to be consumed on production. With daily solar curtailment equating to powering a quarter of Delhi, the report underscores that the escalating mismatch of supply and demand needs immediate strategic focus on storage and demand adjustments to prevent worsening challenges.