From The TimeSplitters Wiki

The Plasma Grenade is a large ball of fiery plasma that sticks to the first thing it hits when thrown, such as the walls, ceilings, floors, and other players.

In TimeSplitters 2, the Plasma Grenade could only be used through the alternate fire function of the Plasma Autorifle.

The Plasma Grenade is used in the TimeSplitters 2 Story Mode level Robot Factory through the Plasma Autorifle. It is also used in the TimeSplitters: Future Perfect Story Mode levels Time to Split, Machine Wars, and Something to Crow About.