The advent of competitive bidding had brought in a period of inactivity for the entire wind power segment. However, the segment has started regaining traction after a year of lull, with about 15 GW of wind capacity either tendered or in the process of being tendered as of June 2018. The Solar Energy Corporation of India (SECI) and other central and state-level agencies are making conscious efforts to address the challenges hampering this segment’s growth. At the 8th Annual “Wind Power in India” conference organised by Renewable Watch, Shailesh Kumar Mishra, director (power system), SECI, spoke about the planned wind trajectory, recent auctions, the key issues and the way forward. Excerpts…
The Indian wind power segment has changed dramatically in the past two years with the phasing out of feed-in tariffs (FiTs) and introduction of the competitive bidding mechanism. The massive decline in tariffs has made wind power more acceptable for discoms that were earlier put off by the higher costs. In fact, allocation of wind capacity based on discoms’ demand started much before SECI or NTPC started inviting wind tender bids. Till date, 6 GW of wind power capacity has already been auctioned by SECI in four tranches. However, many issues have cropped up since the finalisation of these tenders and allocation of capacities to the respective developers.
The biggest issue faced by the entire wind industry at present is that of evacuating power from the sites where developers plan to install the wind farms. The problem magnifies specifically in the case of large wind farms requiring connectivity to the inter-state transmission system (ISTS). Developers opt for ISTS connectivity as it is free and offers an advantage to them in competitive bidding, wherein the lowest bid wins. Hence, developers choose the best wind sites that offer the highest capacity utilisation factor or better land availability, and quote accordingly. It is only after the bids are received that SECI along with the central transmission utility (CTU) come to know of the prospective wind project sites.
The issue came to light when in the last four auctions a huge bid capacity (about 2.6 GW in total) came for Bhuj in Gujarat due to the high wind sites in the region. The evacuation infrastructure was, however, insufficient to cater to such high capacities. This issue is now being resolved by the concerned parties and augmentation work of approximately Rs 5 billion at the Powergrid Corporation of India Limited (Powergrid) substation including the installation of seven transformers is being carried out. Powergrid has already issued tenders for the same.
A similar issue was seen in the solar segment. Earlier in the solar park scheme, when this ISTS concept was initially introduced, it was the developers’ responsibility to construct the transmission capacity and acquire land. Though quite popular initially, land acquisition issues due to delays in approvals made the entire process cumbersome for developers. Hence, the government allowed the developers to acquire land and set up projects anywhere. However, this led to the beginning of connectivity issues. When all these measures will be set in place, then the uncertainty in this sector will be completely resolved.
With the lessons learnt from these bids, the future methodology has been worked out. The future planning for the transmission system has been carried out after taking feedback from developers about their preferred locations for wind and solar projects. In this manner, the plan for 67 GW of transmission capacity has been developed, which is under approval and in the implementation stage. Since transmission systems have longer gestation period than wind or solar projects, they are being developed in a phased manner to improve the speed of execution.
The next issue arises because specific areas with better transmission capacities are not earmarked for developers to bid for. So transmission capacity might be planned in a particular location, but developers might opt for another location owing to their convenience. Then the additional issue of assigning responsibility to either a developer or Powergrid for building that transmission system comes into play. SECI had requested the Central Electricity Regulatory Commission (CERC) to allow them or any nodal agency to block a particular capacity of the planned transmission system. As per the plea, the concerned nodal agency can invite bids for the blocked connectivity, and the bidders can quote only in the area where the transmission system is planned. This will ensure wind or solar capacity development in a planned manner as the areas would be chosen by the developers themselves. Initially unwilling, the CERC eventually released a draft regulation that permits the booking of transmission capacity by the nodal agency that is later on transferred to the successful bidder identified through competitive bidding. In this particular case, transfer of connectivity has also been allowed. Soon SECI will come out with a specific plan for the transmission system along with tenders after getting an approval from the CERC.
In spite of all the challenges, 130 MW of wind capacity of the 1,000 MW auctioned as part of SECI’s Tranche I has already been commissioned. Although it was scheduled for completion in October 2018, it got smoothly commissioned before its deadline without hiccups. This was against the industry’s expectations, which had predicted ISTS connectivity to be more complicated in comparison to the state grid connectivity. SECI’s next step is to refine the commissioning procedure, which currently involves a lot of red tape and approvals. The commissioning procedure will be designed on the lines of the one followed in the transmission sector, where the Central Electricity Authority (CEA) inspector gives clearance after due inspection. Following this, the developer has to get a commissioning certificate from the regional load despatch centre (RLDC) after a 24-hour test run. SECI is planning an easier methodology for solar and wind power developers so that CEA inspection and connectivity to the CTU will be sufficient for a project to qualify as commissioned.
As far as auctions are concerned, SECI has a mandate to tender 16 GW. Out of this, 10 GW of capacity was planned to be auctioned this year. However, it is now expected that the total auctioned capacity would be low initially due to a huge setback in this plan as SECI’s Tranche V wind auction for 2 GW of capacity was undersubscribed by 800 MW. Lack of transmission capacity was the major concern flagged by developers and industry experts. However, the issues regarding transmission constraints are being resolved. To that end, one bid has already been conducted by NTPC while SECI’s auction for 1,200 MW is also to be conducted soon. SECI will subsequently keep coming up with bids for 1,200 MW based on the planned trajectory as per this year’s target capacity of 10 GW under SECI’s mandate. As far as the entire wind segment is concerned, against the target of 60 GW, 34 GW has been commissioned till date. The balance capacity is either being tendered or is planned to be tendered soon or is under execution by SECI or NTPC or any of the states. This proves that the country is more or less on needed track to meet its targets till 2022.
Solar-wind hybrid auctions are also going to be conducted soon, for which one bid of 2.5 GW is already out. However, as some of the large wind capacity bids are not attracting the expected response in the form of reasonable tariff prices, the government has decided to scale down the auction size. In this case, the auction will now be held for 1.2 GW. A pre-bid conference has already been conducted for the same with all the bidders and the applicability of these projects has been explored. As per SECI’s plan, 1.2 GW of greenfield solar-wind hybrid capacity will be tendered every alternate month.
However, one concept that has not been able to garner much attention is that of solar-wind hybridisation in the case of brownfield projects. During the pre-bid meeting for this auction, a lot of issues were raised by the developers related to land, and schedule and despatch of energy. These issues are still being addressed by SECI and it will soon come out with its clarification. SECI will tender brownfield solar-wind hybrid projects only after the developers’ concerns and other challenges are resolved.
In addition, SECI has recently tendered a 160 MW solar-wind hybrid project to be set up in Andhra Pradesh. This project would consist of 120 MW solar and 40 MW wind integrated with a battery energy storage system. The project is to be implemented in engineering, procurement and construction mode, and is being funded by the World Bank. Looking ahead, SECI supported by the government will encourage the upward growth of the country’s wind segment through its auctions. It will also continue to make efforts to address the challenges faced by developers and support them in connectivity-related or any other issues.