How can India address energy demand peaks?

The country remains heavily reliant on coal.

India should leverage the opportunity presented by solar energy to meet its peak energy demand, according to the Institute of Energy Economics and Financial Analysis (IEEFA).

In a new briefing note, IEEFA said that “the alignment of peak demand with solar availability presents an opportunity to maximise solar utilisation, making it possible to tap into the cheapest available renewable energy source, reduce daytime reliance on coal, and cut emissions.”

India is one of the Asian countries leading the deployment of more renewable energy sources. However, coal remains the backbone of supply, accounting for nearly 73% or 157.6 gigawatts of the total daily generation.

“The persistent evening peaks, which now nearly match daytime highs, reinforce the urgency of deploying storage solutions, demand measures and hybrid renewable projects to meet post-sunset demand,” said Saloni Sachdeva Michael, co-author and Energy Specialist at IEEFA, South Asia.

Vibhuti Garg, contributing author and Director, IEEFA, South Asia, said incentivising load shifting from evening to day can help align demand with solar generation.

“To support this, Time of Day tariffs should be made more effective by significantly widening the price differential between peak and off-peak periods,” she added.

Deploying more battery energy storage systems can also help ensure grid stability and reduce the need for fast-ramping coal, said Kaira Rakheja, co-author and energy analyst, IEEFA, South Asia.

Hybrid projects combining complementary generation patterns of solar (daytime), wind (evening and night), and hydro (dispatchable as needed), which can be paired with battery energy storage, also provide more flexibility.

However, IEEFA noted that such projects still have limitations due to different issues, such as land aggregation issues, lack of coordinated transmission planning, and high cost of storage components.

“To address these bottlenecks, the government can consider streamlining land and grid access for hybrid clusters, revise power purchase agreements to value firm and dispatchable output and provide clarity on compensation for storage-based services,” IEEFA said.