Cost of electricity banking under open-access arrangement: A case of solar electricity in India

Installing 100 GW of solar capacity by 2022 is challenging as Indian distribution companies (DISCOMs) avoiding buying renewable electricity (RE) due to financial distress and generation overcapacity and large customers do not buy RE due to the intermittency. Thus, the provision of banking services by DISCOMs to open-access consumers (OACs) buying renewable electricity (RE) from independent generators can be alternative way to promote RE in India. However, banking services affect the merit order dispatch (MOD) schedule of DISCOMs and result in merit order effect (MOE). Based on the existing concept of MOE, the banking fee was calculated as the differences in cost of dispatch between in banking and without banking scenarios for DISCOMs of the Indian state of Madhya Pradesh for providing banking to a hypothetical customer willing to buy solar electricity under open access. On the basis of real-time historical data obtained from grid operators, the findings showed that the banking fee would be 0.9-1.6c/kWh, about 20-30% of solar electricity rate under open access. Banking service can be an interim policy measure to increase penetration of renewable electricity until grid-level storage becomes affordable. The simulations were done in Python programming language. (C) 2019 Published by Elsevier Ltd.