India possesses abundant solar and wind energy resources. However, standalone solar and wind projects, in their conventional forms, fall short of meeting round-the-clock (RTC) power requirements due to intermittent generation. However, when paired with hybrid renewable energy projects, these limitations can be addressed, particularly by incorporating energy storage solutions such as battery energy or pumped hydro. Storage plays a pivotal role in storing excess energy during peak production and releasing it during periods of low or no generation. The integration of energy storage with hybrid systems significantly improves the overall reliability and grid integration of renewable energy installations. This collaborative approach is in line with the goal of providing clean energy solutions to various consumers while satisfying the continuous demand for power consumption. Renewable Watch provides an overview of key developments in the hybrid and storage segments…
Wind-solar hybrids and RTC projects
Wind-solar hybrid, which utilises both solar and wind energy, is rapidly gaining traction as a viable renewable energy model in India, capitalising on the complementary wind and solar generation patterns across diverse locations. As the electricity grid undergoes a rapid transition to greener sources, issues of intermittency and erratic power supply become more significant. Consequently, there is a growing inclination of both the government and the market towards RTC power projects.
The past year has witnessed tremendous growth in the wind-solar hybrid and RTC segments, marked by the introduction and completion of new projects as well as the initiation of tenders and policies.
In December 2022, Amazon signed PPAs with Vibrant Energy for two projects. In the same month, Tata Power Renewable Energy Limited (TPREL) received a letter of award from Tata Power Delhi Distribution for the development of a 255 MW wind-solar hybrid power project in Karnataka.
In January 2023, Adani Electricity Mumbai Limited invited bids for 1,500 MW of grid-connected renewable energy projects. In the same month, Rajasthan Urja Vikas Nigam Limited invited bids to set up 1,500 MW of interstate transmission system (ISTS)-connected wind-solar hybrid power projects with required storage for discoms to have flexibility in scheduling power. In the same month, AmpIn Energy Transition signed a PPA for a 200 MWp wind-solar hybrid project with Solar Energy Corporation of India Limited (SECI). This capacity was awarded as part of SECI’s 1.2 GW hybrid wind-solar tender (Tranche V).
In March 2023, NTPC Renewable Energy Limited (NTPC REL) signed a term sheet with Greenko ZeroC Private Limited to deliver 1,300 MW of RTC renewable energy for Greenko’s forthcoming green ammonia plant in Kakinada. In addition, Adani Green Energy Limited commissioned a 700 MW wind-solar hybrid plant in Rajasthan’s Jaisalmer district.
In April 2023, Vibrant Energy received Rs 22 billion from Power Finance Corporation Limited for the construction of two 300 MW wind-solar hybrid projects. In the same month, Sprng Akshaya Urja Private Limited, NTPC REL, Project Nine Renewable Power (Ayana Power) and TEQ Green Power XIII Private Limited (O2 Power) won Railway Energy Management Company Limited’s auction to deliver 1 GW of RTC electricity from grid-connected renewable power projects with or without storage for 25 years. Sprng won a capacity of 100 MW with a quote of Rs 3.99 per kWh. NTPC and Ayana were awarded capacities of 500 MW and 300 MW, respectively, with quotes of Rs 4.10 per kWh. O2 secured 60 MW with a quote of Rs 4.27 per kWh.
In May 2023, SECI awarded 1.2 GW of hybrid wind-solar projects with energy storage for guaranteed peak power supply. AMP Energy Green won 100 MW capacity at a tariff of Rs 4.64 per kWh. Meanwhile, ReNew Vikram Shakti Private Limited was awarded a bid capacity of 600 MW for Rs 4.69 per kWh. Hero Solar Energy received 120 MW for Rs 4.72 per kWh and ACME Cleantech Solutions received 380 MW for Rs 4.73 per kWh. In the same month, Amp Energy India won a 150 MW wind-solar hybrid project at a tariff of Rs 3.07 per unit in Calcutta Electric Supply Corporation Limited’s auction.
In June 2023, First Energy Private Limited commissioned a 45.8 MW wind-solar hybrid captive power plant in Gujarat. The facility has an installed capacity of 24.3 MW of wind energy and 21.5 MW of solar energy.
In July 2023, Serentica Renewables signed over 1.25 GW of new power delivery agreements with multiple industrial customers. To meet RTC green energy needs, Serentica aims to install 4 GW of renewable energy capacity across India. In addition, CleanMax Solar commissioned a 400 MW wind-solar hybrid facility for its commercial and industrial clients in Gujarat, and Fourth Partner Energy commissioned a 70 MW wind-solar facility in Gondal, Gujarat.
In September 2023, SJVN Limited issued a request for proposal (RfP) for developers to set up ISTS-connected 1,500 MW wind-solar hybrid projects in India. In the same month, results for Tata Power’s auction to develop 225 MW of grid-connected wind-solar hybrid projects, both interstate and intra-state, with an additional 225 MW greenshoe option on a long-term basis were announced. Juniper Green Energy Private Limited and TPREL emerged as winners in the auction, winning a capacity of 75 MW and 150 MW at a tariff of Rs 3.27 per kWh and Rs 3.28 per kWh respectively. In the same month, Bharat Heavy Electricals Limited issued an RfP to procure 90 MUs of RTC clean power annually on a long-term basis.
In October 2023, SECI issued an RfP for setting up 2,000 MW of ISTS-connected wind-solar hybrid projects under Tranche VII. In the same month, TP Vardhaman Surya Limited announced plans to set up a 966 MW solar-wind hybrid plant in captive mode. The hybrid plant will be utilised to deliver RTC renewable power to Tata Steel Limited’s Kalinganagar plant and the electric arc furnace project in Ludhiana, Punjab. Additionally, Rewa Ultra Mega Solar Limited issued RfPs for setting up 750 MW wind-solar hybrid power projects. The projects will be located in Madhya Pradesh.
In November 2023, NHPC Limited issued an RfP for 1,500 MW of ISTS-connected wind-solar hybrid projects, with or without storage. The projects can be set up anywhere in India.
Several recent policy developments have bolstered the segment. In August 2023, the Ministry of Power (MoP) issued new guidelines for the tariff-based competitive bidding process to procure power from grid-connected wind-solar hybrid power projects to achieve fair procurement of electricity, transparency and competitive prices. To stabilise and de-risk the renewable energy market, a framework for long-term hybrid power transactions is being developed. Earlier, the Ministry of New and Renewable Energy launched its National Wind-Solar Hybrid Policy to boost renewable power generation by promoting new projects and hybridising existing ones. In addition, several states, including Rajasthan and Gujarat, have recently floated new renewable energy policies, giving focus to hybrid projects.
Energy storage
For renewable energy to become despatchable and available 24×7, energy storage systems (ESSs) play a key role. They can help improve power quality, reduce peak demand, increase the capacity of distribution and transmission grids, avoid deviation penalties and increase the overall flexibility of the system. Both private and public renewable energy developers and utilities are adopting energy storage technologies and announcing many projects and policies in this space.
In December 2022, Ayana Renewables and NTPC REL secured a tender from Maharashtra State Electricity Distribution Company Limited for 250 MW of flexible power from grid-connected renewable energy projects, including an energy storage facility. In the same month, the Greenko Group emerged victorious in NTPC REL’s auction, earning the right to establish 3 GWh ISTS-connected energy storage systems. SECI floated bids for a 2 MW solar project in Kaza, Himachal Pradesh, as well as a 1 MW battery energy storage system (BESS) in February 2023.
In June 2023, SJVN Limited invited bids for 1,500 MW of power from ISTS-connected renewable energy projects with energy storage capacities across India. In July 2023, Serentica Renewables signed an energy storage capacity offtake contract with the Greenko Group, leveraging 1,500 MWh of capacity from upcoming energy storage projects in Andhra Pradesh and Madhya Pradesh.
In RUVNL’s auction to develop 1,200 MW of solar projects with a minimum six-hour delivery from ESSs during peak demand, BluPine Energy and ACME have emerged as winners with respective quantities of 100 MW and 500 MW at a tariff of Rs 6.68 per kWh and Rs 6.69 per kWh respectively.
In October 2023, NHPC Limited issued RfPs for the selection of project developers to deliver firm and despatchable power from 1,500 MW ISTS-connected renewable projects, including ESSs.
Recently, in November 2023, Madhya Pradesh Power Management Company Limited bid for a 500 MW energy storage project with a discharge duration of six hours and a maximum continuous discharge period of four hours. In the same month, SJVN Limited’s auction to supply 1.5 GW of power from ISTS-connected renewable energy with energy storage was won by seven bidders. ACME Solar, Juniper Green and Tata Power Renewables have all quoted a tariff of Rs 4.38 per kWh to win 250 MW, 200 MW and 200 MW, respectively. Meanwhile, the four remaining bidders quoted Rs 4.39 per kWh. These include ReNew, which won 184 MW; Solarcraft Power (BluePine), which won 150 MW; Hero Solar, which won 120 MW; and TEQ Green, which won 80 MW.
To promote market growth, a number of industry and policy initiatives are being put into action. In order to procure firm and despatchable power from grid-connected renewable energy projects with energy storage devices, the MoP released guidelines for a tariff-based competitive bidding process. These guidelines aim to address the intermittent nature of renewable energy and underutilisation of transmission systems while also ensuring a steady and predictable renewable energy supply to discoms. With sanctions for non-compliance, the guidelines highlight that producers must produce firm and despatchable renewable energy in line with the demand profile outlined in the request for selection.
The MoP also announced the National Framework for Promoting Energy Storage Systems, aligning with the country’s commitment to employ renewable energy sources and reduce greenhouse gas emissions. The main goals of this framework are to encourage the deployment of ESSs, reduce reliance on fossil fuel power plants, ensure a steady supply of RTC renewable energy, lower emissions and minimise energy costs.
Future outlook
In the initial days of the renewables sector, blending it with cheap thermal power not only reduced the cost of bundled renewable energy but also ensured stable generation and utilisation of existing coal-based power plants. Interestingly, over the years, renewables have become cheaper than thermal power. Due to the changing market dynamics and with ambitious climate targets in place, bundling of various clean energy sources, such as hydro and biomass along with energy storage, is being sought in a bid to make the clean generation pattern firmer.
In fact, recently, during the special ministerial session of the Fourth International Conference and Exhibition on Clean Energy, the Union Minister for power and new and renewable energy noted that while India has significant solar and wind capacity, RTC renewable energy is not possible without hydroelectricity. Regarding the cost trends of RTC renewable energy, the minister shared its cost would be about Rs 6 per unit if green hydrogen is used for storage. According to him, the cost of green hydrogen would be the cheapest in India, and green hydrogen would become a viable energy storage alternative.
Meanwhile, according to a recent Goldman Sachs report, the country’s levellised cost of RTC renewable power is 27 per cent lower than that in China. The report estimates that pumped storage plant (PSP)-backed RTC renewable power costs only 15-17 per cent more than new pithead coal plants. However, the cost premium will become negligible after factoring in the transmission cost waiver and the expected inflation in coal and coal logistics costs. Despite the initial high-cost premium, pumped hydro-backed RTC renewable power supply yields 1.5-2 times higher returns compared to conventional solar and cost-plus coal plants.
According to BloombergNEF’s annual lithium-ion battery price survey, average pack prices dropped to $139 per kWh this year, reflecting a 14 per cent decrease from $161 per kWh in 2022. Technical innovation has historically been the primary cause of the decline in battery prices. However, this year, the main cause of the decline has been the cheaper rates of raw materials. Due to a notable increase in manufacturing capacity in every stage of the battery value chain – from raw materials and components to battery cells and packs – prices of important battery metals, particularly lithium, have dropped precipitously since January 2023.
While the outlook for the energy storage segment looks positive given the falling price trend, the sector still faces several challenges. Firstly, the exploration and research and development of advanced energy storage technologies require a high initial cost of investment, which deters several potential investors from establishing a robust energy storage market in India.
The Central Electricity Authority estimated that by 2026–27, 16.13 GW of ESS capacity will be needed to integrate additional renewable energy capacity, with significant expansion expected in the coming years. The government’s dedication to advancing energy storage technology is demonstrated by the significant funding demand for PSPs and BESSs for the period 2022–27, amounting to Rs 542.03 billion and Rs 566.47 billion respectively. By 2047, the need for energy storage is anticipated to rise to 320 GW, which includes 90 GW of PSP and 230 GW of BESS capacity, with a storage capacity of 2,380 GWh.
According to research undertaken at Pandit Deendayal Energy University in 2022, hybridisation could increase yearly power output to 10 GWh in most parts of India and up to a maximum of 18 GWh in the western part of the country. Furthermore, the hybrid power exploitability index indicates that most Indian regions are suitable for peak load demand hybrid installations, while southwestern India is ideal for addressing baseload demand.
Considering ambitious plans and the policy impetus by the government, along with investor enthusiasm and favourable cost economics, a surge in RTC and storage projects can be expected, signifying a paradigm shift towards a more reliable and continuous power supply.
By Anusshka Duggal
