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With an increasing focus on firm and dispatchable renewable energy (FDRE), the combination of renewables and storage has been met with both curiosity and trepidation, existing somewhere between need for energy transition and optimal investment return expectations. India's first and largest utility-scale 20MW Solar PV plant/8 MWhr BESS system in Andaman and Nicobar islands (338MU/ 60MW energy/ peak demand during FY22), three years after commissioning enhances our understanding in respect of return profile and technocommercial feasibility of operations. The plant was set up with a capital cost of INR 1,260mn and had the financial assistance of INR 447mn along with regulated RoE of 16.96%. Considering renewable projects along with storage without subsidy and regulated RoE, we arrive at RoE of 6.1%/ 10.7%/ 13.4% and IRR of 10.5%/ 13.7%/ 14.7% for the (tariff/ interest rate) of (INR 6.5/ 8.5%), (INR 8/ 9.5%), (INR 8.5/ 8.5%).

Key take aways from the project are:

? The total capital cost of the project was INR 1,257mn including the EPC cost of INR 1,129mn and battery equipment cost of INR 339mn.

? The Battery cells and modules were supplied by LG Chem, S.Korea and the Battery Energy Storage System (BESS) was integrated and supplied by L&T. The BESS has the Cycle life of 4,000 cycles. Considering one cycle per day, it works out to 11 years. The battery replacement is to be done after 11 years costing INR 310mn.

? The 20 MW Solar Power Plant achieved an all-time peak power of 15.56 MW on 2 Sep’22.

? The solar plant since commissioning was not operating at full capacity due to prevailing high frequency condition in the grid.

? The plant was able to achieve maximum of 12.91% CUF without BESS and 12.08% with BESS (battery energy storage system).

? Factors like adverse weather conditions, high grid voltage and frequent inverter tripping contribute to the inability to achieve the designed CUF.

? The instantaneous active power from plant was curtailed at the rate of 20% and 40% during the frequency range from 51.5Hz to 51.8Hz respectively.

? The reliability of the grid remains a challenge. In the absence of this, curtailment of RE generation leads to suboptimal returns.

? This renewable project along with storage gives RoE of 6.1%/ 10.7%/ 13.4% and IRR of 10.5%/ 13.7%/ 14.7% for the (tariff/ interest rate) of (INR 6.5/ 8.5%), (INR 8/ 9.5%), (INR 8.5/ 8.5%), after removing subsidy, regulated return and better operational efficiency.

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