Despite aggressive auction timelines, wind power development in India has not picked up pace as many had hoped. As constraints related to the availability of high-resource sites and grid interconnection capacity — particularly in Gujarat and Tamil Nadu — stalled project development and kept bidders away, the initial euphoria from successes of the early tenders was quickly forgotten.
On top of that, the aggressive deployment of new solar capacities by all the seven wind-resource-rich states further exacerbated the land and grid access problems.
In the face of these constraints, wind-solar hybrid (WSH) projects have gained increasing attention as they allow optimising the use of land and grid resources.
India’s Ministry of New and Renewable Energy (MNRE) first announced its national wind-solar hybrid policy in 2018, stipulating a minimum single-technology share of 25% for a project to be defined as a WSH. Under the policy, WSH projects are required to have a common grid interconnection point and can be submitted as greenfield, as well as brownfield projects subject to a minimum capacity utilisatiion factor (CUF). Many state governments followed suit by releasing their own WSH policies, offering additional waivers in the form of duty or charge exemptions.
In total, more than 15GW of capacity has already been issued for WSH projects, of which 6.26GW has been allocated and is expected to come online by 2023 (see table). The awarded capacity represents at least 4GW of wind as the bid winners are expected to have a larger wind component in order to meet the guaranteed CUF requirement.
Proposal for financial support
But despite the market momentum, large projects are still facing challenges in terms of grid connection and high-wind-resource land availability as most of the known sites are already saturated. Taking note of these obstacles, the MNRE issued a detailed draft proposal in late 2020 for developing wind and WSH projects.
The proposal document, released for stakeholder consultation, identified about 10,800km2 of land with a wind CUF of more than 30% across seven states to develop standalone wind or WSH projects with an aggregate capacity of 54GW.
The ministry expects the states to take initiative in developing such WSH projects as a concentrated development zone with a plug-and-play infrastructure. To encourage states and private developers, the government has also offered to provide central financial assistance of INR 2.5 million ($33,500) per project to the developer for detailed project report preparation and an additional INR 2 million per megawatt or 30% of the project development cost as an incentive to the developer. This MNRE’s initiative is expected to provide the much needed clarity and certainty for developing future project pipelines.
The value proposition of wind-solar hybrids
For most states in India, solar and wind generation are complementary: solar generation is available only during the day and cannot support evening load peaks, whereas wind generation is flat during the day and picks up in the evening, providing peak support.
This also allows the technologies to use the same transmission infrastructure without the need for capacity upgrades, leading to further reduction in land requirements and fixed project costs. A combination of wind-solar thus provides a stable generation profile, which is more attractive to grid operations.
Another key benefit is in land utilisation: hybrid projects mean wind turbines can be installed in areas where solar farms have already acquired land or vice versa. On the technical front, the combined projects can give a higher capacity utilisation factor to the tune of 50% (scaled to transmission capacity) compared with standalone projects.
And combined with storage, WSH projects can be designed to simulate the generation profile of a peaking power plant — an advantage that is valuable for utilities.
Following the 2018 policy announcement, the Solar Energy Corporation of India (SECI) released its first exclusive 1.2GW wind-solar hybrid tender in mid-2018 – initially for for 2.5GW but subsequently reduced to 1.2GW. The tender adopted the policy guidelines and stipulated a minimum CUF of 40%.
This was followed by three further 1.2GW WSH tenders, reducing the CUF requirement to 30% for latest tender released in April 2021. The first two tenders were met with a lukewarm response due to aggressive tariff caps, but the third (tranche 3) WSH tender was fully subscribed.
Raising the stakes
In addition to these pure WSH tenders, SECI introduced two innovative tender configurations. The first of these tenders, for 1.2GW, required the bidders to offer peak power supply for a defined evening peak load period using WSH and energy storage.
The second tender was for 400MW and required bidders to offer round-the-clock (RTC) power by blending WSH with energy storage and offering a guaranteed minimum annual CUF of 80% (and 70% on a monthly basis). Both these tenders received overwhelming response.
Riding on the success of the RTC tender, SECI released a massive RTC II tender for 5GW in March that asked bidders to blend WSH with conventional coal-based power, the results for which are yet to be announced (see below for more detail).
SECI further converted its tranche 9 wind tender of 2.5GW, launched in the same month, to a WSH tender with the requirement of the wind component accounting for at least 80%.
Apart from SECI, many other private utilities and state sector companies also came out with their own WSH tenders, ranging in capacity from 55MW to 700MW.
The table below provides a list of tender offerings and capacity auctioned in the WSH space (only projects over 200MW are covered)
Corporate deals
A parallel market for WSH projects has emerged, with project developers such as CleanMax solar and Continuum Green Energy offering WSH power to corporates and industries that want to meet their sustainability and environmental commitments. CleanMax Solar recently secured a contract for supplying WSH power to help Facebook India meet its renewal energy commitments. Seeing potential in this area, CleanMax has set a target of 300MW of WSH capacity over the next three years.
With WSH and WSH-storage hybrids poised to take centre stage in India’s renewable energy plan, the Indian wind industry will have to adapt quickly to the new technology-integration challenges to stay relevant.
The tables have turned — wind-solar-coal hybrids
While combining wind power with solar and storage seems logical, SECI’s not-yet concluded 5GW tender adding WSH to conventional coal-based power is rather more unusual.
The idea is to blend low-cost renewable energy with existing — high-cost — excess thermal capacity that is not on the dispatch roster. The renewables developers can tie up with existing plants or those yet to be commissioned, with unallocated and un-tied capacity.
The minimum project size is 250MW, with a requirement of 80% availability annually. The renewable energy component must be more than 51%, with storage allowed. This new type of hybrid could be beneficial to many private as well as state-owned coal projects that do not have buyers for their full capacity because of their high costs of generation.
The same tender has been published recently with new bid submission and opening timelines for July 2021, suggesting an extension.
