US Grid blog

Upheavals in the world’s power grids have precipitated a curious convergence between energy-rich Texas and energy-deficient India. What is binding them together? A need for pragmatism.

Last week marked a year since a deep freeze across Texas nearly collapsed the state’s power grid. The milestone has been the subject of a great deal of introspection both in Texas and nationally. The Wall Street Journal used the anniversary to run a feature article entitled “America’s Power Grid is Increasingly Unreliable,” declaring that “the problem is likely to get worse before it gets better.”

The notion that the United States — much less, Texas, the energy capital of the world — is entering a time where the power grid has suddenly become a mainstream concern among businesses, public officials and the general population would have been unthinkable just a year ago. The United States — the birthplace of mass electrification — and its power grid have been the global standard of reliability and resiliency for over a century. The Wall Street Journal cited a number of reasons for this dramatic change, including an aging infrastructure, severe weather events and a power-plant fleet that is “rapidly going green.” In parallel to this article, the Wall Street Journal ran a separate feature on innovative resiliency solutions which experienced a baptism by fire during the worst of the Texas crisis, especially highlighting a low carbon, long duration natural gas-fired generator provided by Houston-based Enchanted Rock.

Also last week, on the other side of the world in India — historically one of the world’s most unreliable and energy-deficient power grids — two Indian companies, GIC- and ADIA-backed Greenko and CDC-backed Ayana, announced the creation of the country’s first domestic energy storage company. The announcement came on the heels of a recent “clarification” issued by India’s Ministry of Power, which declared energy storage an “essential” element of both the country’s overall power system and its ambitious renewable energy goals of installing 500 GW by 2030. The Indian government has modeled that this target would need to be accompanied by 27GW/108GWh of energy storage by 2030. With the catalyst of such a clearly defined vote of confidence from the central government, India’s two largest green energy players — Greenko and ReNew Power — both have recently announced major strategic moves into energy storage. For ReNew Power, this entailed the recent announcement of an India-focused energy storage joint venture with Fluence.

More interesting, however, was the Greenko-Ayana announcement, which was quite concrete in its energy storage roadmap for India. The partnership announced a massive 6,000MWh of long duration storage capacity, with a first tranche of 1,500 MWh in the near-term. Like the gas-fired generator solution which has emerged as the beneficiary of last February’s Texas crisis, what is most notable about the Greenko-Ayana solution is its underlying practicality: pumped hydro storage. The solution is simple, with low technology risks: it will utilize low-cost wind- and solar- power during off-peak hours to elevate water into storage, and then release the water into a lower reservoir to generate hydro-powered electricity during periods of peak demand on the power grid. It implements an immediately available mitigant to the intermittency issues posed by large-scale integration of wind and solar power generation into the power grid.

As power grids around the world from Texas to India seek concrete solutions to real-time reliability and resiliency concerns, it is worth noting that such issues are societal demands. They do not automatically resolve themselves. A cautionary tale, for example, is the Eskom grid in South Africa, which was once considered one of the world’s best designed and operated power grids in the world before cooperation between the public and private sectors deteriorated. Maintaining grid resiliency and reliability through periods of transition is a task which requires continuous collaboration across both public and private sectors. Given the proven role of sources such as natural gas and hydro in facilitating the Energy Transition, governments around the world must recognize the consequences — including reduced resiliency and increased price shocks — of declaring them as excluded from clean energy goals.

As the Energy Transition accelerates this decade, the ambitious targets for renewable energy set by governments around the world will increasingly require a greater role for such practical, immediately scalable solutions to the concomitant intermittency and resiliency concerns. The recent lessons learned from power grids as disparate as energy-rich Texas and energy-deficient India demonstrate that the Energy Transition is already a concrete reality. They also demonstrate that the Energy Transition is in urgent need of equally concrete solutions. It is worth noting for both governments and private investors alike that such concrete solutions — despite utilizing less high-concept technologies — may end up being the quiet, near-term winners of the disruption of the world’s power grids created by the Energy Transition.