India is well endowed with sources of solar and wind energy. But vanilla solar and wind projects are not enough to meet the round-the-clock (RTC) power requirements of consumers given the intermittent nature of wind and solar energy. However, when coupled together, wind-solar hybrid projects can offset the intermittency challenge, especially when combined with energy storage solutions such as battery energy or pumped hydro.
Moreover, recent tariffs discovered under hybrid project auctions have been highly competitive with present solar tariffs. Hybrid tariffs are also much lower than wind tariffs, making them a viable option for investors vis-à-vis vanilla wind projects. As a result, the number of wind-solar hybrid project auctions has been increasing over the past few years. This year, the lowest hybrid tariff discovered was Rs 2.53 per kWh in the Solar Energy Corporation of India’s (SECI) April 2022 auction for developing 1,200 MW of interstate transmission system (ISTS)-connected wind-solar hybrid projects (Tranche V) across India. Recently, SECI also released its third RTC tender, for a capacity of 2.25 GW.
With the rapid greening of the grid, curbing intermittency through hybrid models and RTC projects is increasingly being favoured by investors and the government alike. The hybrid and RTC segments are attracting more capital, as these solutions are expected to provide an affordable and firm source of energy to consumers while significantly contributing to India’s ambitious climate commitments.
Renewable Watch looks at the key developments in the wind-solar hybrid and RTC segments over the past year…
Wind-solar hybrids
Over the past year, the wind-solar hybrid space has witnessed tremendous growth with the introduction of new projects and the completion of existing projects, as well as tenders and partnerships.
Projects and collaborations
With the recognition that hybrid projects may be more effective in managing the intermittency challenge faced by solar and wind energy, many key players in the market have initiated partnerships to strengthen their position in the hybrid segment. In May 2022, Saint-Gobain India and Sembcorp Green Infra’s subsidiary Green Infra Wind Energy Ltd. signed a long-term wind-solar hybrid energy supply agreement whereby Sembcorp will supply 33 MW of locally sourced renewable power to Saint-Gobain’s manufacturing facilities in Sriperumbudur, Perundurai and Tiruvallur, over the next 25 years. In September 2022, agricultural solutions company UPL Ltd. and CleanMax Enviro Energy Solutions entered into a joint venture to establish a hybrid solar-wind energy power plant in Gujarat. The project is expected to entail a capacity of 61.05 MW, with 28.05 MW of solar power and 33 MW of wind power. Recently, Filatex India also signed contracts with 100 per cent subsidiaries of distributed solar company Fourth Partner Energy, to buy renewable energy from the latter’s hybrid wind-solar open access power project as a captive customer.
Moreover, many projects have been announced in this space. In December 2021, the Maharashtra State Electricity Distribution Company issued a letter of award to Tata Power Company’s wholly owned subsidiary TP Saurya for the construction of a 300 MW hybrid power plant. Soon after, GE Renewable Energy announced the opening of a new renewable hybrids factory in Vallam, near Chennai. Additionally, in a first for any airport in India, Mumbai’s Chhatrapati Shivaji Maharaj International Airport, in June 2022, began a pilot project to develop a wind-solar hybrid system to generate renewable energy for captive usage. The project aims to enable the airport to reach its net zero emission targets. Around the same time, the Haryana Electricity Regulatory Commission sanctioned a power sale agreement proposed by the Haryana Power Purchase Center for procuring 800 MW of ISTS-connected wind-solar hybrid power (Tranche IV) from SECI.
In terms of commissioned projects, in May 2022, Adani Green Energy Limited (AGEL) commissioned a 390 MW wind-solar hybrid power generation project. As per the company’s statement, AGEL’s subsidiary Adani Hybrid Energy Jaisalmer One Limited commissioned the project in Jaisalmer, Rajasthan. In September 2022, AGEL commissioned another 600 MW ISTS-connected wind-solar hybrid power project in Jaisalmer. The solar project has deployed bifacial solar modules and employs horizontal single-axis tracker technology to maximise power generation. Recently, Tata Power Green Energy Limited, a wholly owned subsidiary of Tata Power, also commissioned a 225 MW hybrid power project in Rajasthan. The power generated from this project will be further distributed to Tata Power, Mumbai Distribution.
Tenders
- In April 2022, Rewa Ultra Mega Solar Limited (RUMSL) issued a request for proposal for the development of 750 MW of grid-connected wind-solar hybrid power projects in Madhya Pradesh. In the following month, the winners of SECI’s auction to develop 1,200 MW of ISTS-connected wind-solar hybrid projects (Tranche V) across India were announced. These included Tata Power, Amp Energy, NTPC and SJVN. With a quoted tariff of Rs 2.53 per kWh, Tata Power won a capacity of 600 MW.
- In June 2022, Hindustan Petroleum Corporation Limited issued a tender to select consultants for a feasibility study for a 100-150 MW wind-solar hybrid project with a battery energy storage system on vacant land for captive use in Andhra Pradesh. Following this, TP Saurya Limited, a subsidiary of Tata Power, was awarded a letter of award by SECI for the establishment of a 600 MW wind-solar hybrid project in Karnataka.
- September saw many significant developments. PTC India floated bids for 500 MW of hybrid renewable energy (wind and solar) under Tranche I with a greenshoe option for an additional 500 MW. With this, the company intends to procure 5,000 MW of renewable energy in tranches of 500 MW to 1,000 MW over the next two to three years. The winners of RUMSL’s auction for the development of 750 MW of grid-connected wind-solar hybrid power projects in Madhya Pradesh were also announced. Sprng Ojas, Tata Power Renewable Energy and ReNew Solar Power won 160 MW, 200 MW and 300 MW respectively, at a tariff of Rs 3.03 per kWh. TEQ Green Power IX (O2 Power) bid for 150 MW but was only awarded 90 MW at a tariff of Rs 3.04 per kWh. In the same month, Tata Power Delhi Distribution also requested bids for 255 MW of wind-solar hybrid power projects across India, with a greenshoe option for an additional 255 MW.
- In November 2022, RUMSL requested bids from consultants for preparation of a detailed project report for the proposed Morena wind-solar hybrid project with energy storage in Madhya Pradesh. In the same month, SECI floated a tender requesting bids for 1.2 GW of ISTS-connected wind-solar hybrid power projects with energy storage (Tranche VI) across India.
RTC power
RTC power refers to power that is supplied 24×7, throughout the year. With the electricity grid rapidly turning green using renewable sources of power, intermittency and erratic power supply are becoming more pertinent issues. As a result, both the government and the market are increasingly drifting towards RTC power projects. As such, several key developments in the segment have occurred over the past 12 months.
In March 2022, ArcelorMittal and the Greenko Group entered into a strategic partnership to develop an RTC 975 MW nominal solar and wind project with an investment outlay of $600 million. The project is likely to be commissioned by mid-2024. The Greenko Group and Ayana Renewable Power are also collaborating to create robust and despatchable renewable energy solutions for industrial and distribution companies, including RTC power supply of up to 1 GW. In April 2022, ReNew Power announced a strategic partnership with Mitsui & Co. Limited, under which Mitsui will acquire 49 per cent of the stake in ReNew Power’s 400 MW RTC renewable energy project. This was followed by the West Bengal Electricity Regulatory Commission’s approval of a power purchase agreement between the West Bengal State Electricity Distribution Company and SECI for the procurement of 100 MW of wind-solar hybrid power on RTC basis at Rs 2.90 per kWh, plus a trading margin of Re 0.07 per kWh.
The year also saw significant policy and regulatory developments in the RTC segment. In September 2022, the Ministry of Power announced amendments to the guidelines for the tariff-based competitive bidding process for procuring RTC power from grid-connected renewable energy projects. These guidelines were initially launched in July 2020. Moreover, NTPC Vidyut Vyapar Nigam Limited began requesting proposals from experienced developers to supply continuous renewable energy from solar, hydro, wind, pumped storage, battery energy storage and hybrid power plants. Meanwhile, roughly two and a half years after its second RTC tender, SECI announced its third RTC tender, RTC-3, in September 2022, for an aggregate capacity of 2,250 MW. The power procured by SECI under the project will be sold to MPSEZ Utilities Limited. SECI had issued its first RTC tender, RTC-1, for a capacity of 400 MW in October 2019. ReNew Power won the entire capacity at a tariff of Rs 2.90 per kWh. RTC-2 was released by SECI for 5 GW of capacity in March 2020. However, the tender’s capacity was later halved.
Outlook
India has set a massive target of achieving 500 GW of non-fossil fuel-based power by 2030. RTC power arrangements within renewable as well as conventional energy projects will be key to meet this target. Hybridisation of solar and wind projects, supported by energy storage arrangements, is likely to be the preferred model over the coming years. However, despite rapid progress, there are some concerns that need to be addressed. These include the complex rules regarding RTC tenders, the high cost of energy storage, supply chain disruptions and the limited capacity of the domestic manufacturing sector at present. Moreover, solar tariffs are likely to rise due to the imposition of a 40 per cent basic customs duty on imported solar modules and a 25 per cent duty on solar cells from April this year. This may impact hybrid tariffs as well. Nonetheless, going forward, one can expect investor focus to align further with the government’s push towards hybrid and RTC green energy projects to meet India’s commitment towards reducing carbon emissions and greening the grid.
By Kasvi Singh
