Eye on Hybrids

Wind-solar projects make some headway

By Khushboo Goyal

India has 34.9 GW of wind power and 24.3 GW of installed solar power capacity as of October 2018, with large capacity additions in the pipeline, aimed at reducing the country’s dependence on fossil fuels. However, wind and solar power come with their own set of challenges in the form of resource intermittency, huge land requirement and grid-related issues. Wind-solar hybrids are an ideal way to address some of the inherent issues of stand-alone solar and wind power. Wind and solar energy have complementary generation patterns that can be used to produce a near-constant source of energy throughout the day. This not only leads to greater transmission efficiency but also results in significant capital and operational savings by the creation of synergies.

Policy in place

Realising the many economic benefits of hybrid projects, the Ministry of New and Renewable Energy (MNRE) released the National Wind-Solar Hybrid Policy, the first dedicated policy for wind-solar hybrids, in May 2018. The policy aims to promote large grid-connected wind-solar hybrids through the provision of an enabling framework. The goal of the policy is optimal utilisation of the transmission infrastructure and land resources, reduction in the variability of renewable power generation and achievement of better grid stability through hybrid systems. Although the policy was welcomed by the entire industry for providing an impetus to hybrid projects, experts note that it fails to address the regulatory and land management issues plaguing the segment. Unfortunately, there is no clarity regarding metering and grid connectivity arrangements, and tariff determination mechanism for such projects.

Projects in the pipeline

Since the roll-out of the policy, only a few pilot projects have been implemented. The first commercial wind-solar hybrid plant was commissioned in early 2018 by Hero Future Energies. Located in Raichur district of Karnataka, the greenfield project comprises a 28.8 MW solar farm with a 50 MW wind plant, and supplies power to industrial consumers through open access agreements. It was set up by Siemens Gamesa, which also developed a 3.38 MW wind-solar pilot project for NTPC in Kudgi, Karnataka.

To set an example for other project developers and promote hybrids, the Solar Energy Corporation of India (SECI) issued a tender in August 2018 for the development of a 160 MW wind-solar hybrid power project with a battery energy storage system (BESS). The project will be set up in engineering, procurement and construction (EPC) mode at Ramagiri, in Ananthapuram district of Andhra Pradesh. Following suit, NTPC Limited launched a tender for a hybrid plant with at least 130 MW solar and 60 MW wind capacity. The project will be set up in EPC mode at NTPC Kudgi in Karnataka. Apart from these projects, IL&FS Energy Development Company Limited is developing a 41 MW wind-solar hybrid project with energy storage in Andhra Pradesh. The project is supported by a grant from the United States Trade and Development Agency.

In June 2018, SECI tendered 2.5 GW of interstate transmission system-connected wind-solar hybrid projects with a ceiling tariff of Rs 2.93 per kWh. This capacity was halved to 1.2 GW and the ceiling tariff reduced to Rs 2.70 per kWh. However, the mega auction was postponed many times on the back of poor response from developers. The tender has recently received bids for only 1.05 GW primarily due to the low tariff ceiling.

Challenges ahead

With increasing transmission constraints and the uncertainty resulting from new taxes and duties, wind and solar development has been taking a hit. The impact is also being felt on the wind-solar hybrid segment. Similar to the fate of many wind and solar power auctions, the first wind-solar hybrid auction has also been under subscribed, mainly due to inadequate developer interest. Investors too are not keen on financing large-scale projects at the unreasonably low ceiling tariffs set by government agencies and state utilities.

The fact remains that while government entities formulate the policies and regulations necessary for renewable energy development, it is private players that actually implement these projects on the ground. Bearing their interests in mind  the government entities should focus on not just achieving lower tariffs but also ensuring long-term sustainability for the entire sector.

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