Despite aggressive auction schedules, wind power development in India has not picked up as much as many had hoped. Since restrictions in connection with the availability of resource-intensive locations and network coupling capacities – especially in Gujarat and Tamil Nadu – slowed down project development and kept bidders away, the initial euphoria about the success of the early tenders was quickly forgotten.
In addition, the aggressive build-up of new solar capacities by all seven wind resource-rich states further exacerbated land and grid access problems.
In light of these limitations, wind-solar-hybrid (WSH) projects have received increasing attention as they enable optimized use of land and grid resources.
The Indian Ministry of New and Renewable Energies (MNRE) announced its national wind-solar-hybrid policy for the first time in 2018, which provides for a minimum share of 25% in a single technology for a project to be defined as WSH. The guideline provides that WSH projects have a common network interconnection point and can be submitted as a greenfield, as well as brownfield projects with a minimum utilization factor (CUF). Many state governments followed suit by publishing their own WSH guidelines and offering additional exemptions in the form of duty or fee exemptions.
In total, more than 15 GW of capacity has already been allocated for WSH projects, of which 6.26 GW have been allocated and should be connected to the grid by 2023 (see table). The awarded capacity corresponds to at least 4 GW of wind, as the bidders are expected to have a larger wind component in order to meet the guaranteed CUF requirement.
Financial support proposal
Despite the market dynamics, major projects still face challenges in terms of grid connection and the availability of areas with high winds, since most of the known locations are already saturated. In view of these obstacles, the MNRE presented a detailed draft proposal for the development of wind and WSH projects at the end of 2020.
The proposal document, which was released for stakeholder consultation, covered around 10,800 km²2 Land with a wind CUF greater than 30% in seven states to develop stand-alone wind or WSH projects with a total capacity of 54 GW.
The ministry expects the federal states to take the initiative to develop such WSH projects as a concentrated development zone with a plug-and-play infrastructure. To encourage states and private property developers, the government has also offered to give the property developer a central grant of INR 2.5 million (US $ 33,500) per project to prepare a detailed project report and an additional INR 2 million per megawatt, or 30% of the To provide project development costs as an incentive for the developer. The initiative of this MNRE is intended to provide the much-needed clarity and security for the development of future project pipelines.
The value proposition of wind-solar hybrids
In most states of India, solar and wind generation complement each other: solar generation is only available during the day and cannot cover the evening peak loads, while wind generation is flat during the day and picks up in the evening and provides peak support.
This also enables the technologies to use the same transmission infrastructure without expanding capacity, which leads to a further reduction in space requirements and fixed project costs. A combination of wind-solar thus ensures a stable generation profile that is more attractive for grid operation.
Another major advantage is the use of land: With hybrid projects, wind turbines can be installed where solar parks have already acquired land or vice versa. On the technical side, the combined projects can result in a 50% higher degree of capacity utilization compared to individual projects (scaled to the transmission capacity).
When combined with storage, WSH projects can be designed to simulate the generation profile of a peak power plant – an advantage that is valuable for utility companies.
Following the 2018 directive announcement, Solar Energy Corporation of India (SECI) has released its first exclusive 1.2 GW wind-solar hybrid tender Mid-2018 – initially for 2.5 GW, but then reduced to 1.2 GW. The tender followed the guidelines of the policy and provided for a minimum CUF of 40%.
Three more 1.2 GW WSH tenders followed, reducing the CUF requirement to 30% for the last tender published in April 2021. The first two tenders were only answered cautiously due to aggressive upper tariff limits, but the third (Tranche 3) WSH tender was fully signed.
Increase the stakes
In addition to these pure WSH tenders, SECI has introduced two innovative tender configurations. The first of these tenders for 1.2 GW required the bidders to offer top performance for a defined evening Maximum load Period with WSH and energy storage.
The second tender was for 400 MW and required bidders to submit an offer Around the clock (RTC) electricity by combining WSH with energy storage, offering a guaranteed annual minimum CUF of 80% (and 70% on a monthly basis). Both tenders met with an overwhelming response.
Based on the success of the RTC tender, SECI published a massive RTC II tender for 5 GW in March, in which the bidders were asked to mix WSH with conventional coal power, the results of which will be announced (see below for more details).
SECI converted its wind tender for Tranche 9 from 2.5 GW to a WSH tender, which had to be at least 80% of the wind component.
In addition to SECI, many other private utilities and state-sector companies have submitted their own WSH tenders with capacities ranging from 55 MW to 700 MW.
A parallel market for WSH projects has emerged, where project developers such as CleanMax Solar and Continuum Green Energy offer WSH electricity for companies and industries that want to meet their sustainability and environmental obligations. CleanMax Solar recently secured a contract to supply WSH power to help Facebook India meet its renewable energy commitments. CleanMax sees potential in this area and has set itself the goal of a WSH capacity of 300 MW for the next three years.
With WSH and WSH storage hybrids at the heart of India’s renewable energy plan, the Indian wind industry must adapt quickly to the new challenges of technology integration in order to remain relevant.
While the combination of wind power with solar and storage seems logical, the not yet completed 5GW tender from SECI, which WSH adds to conventional coal-fired electricity, is rather unusual.
The idea is to combine inexpensive renewable energy with existing – costly – excess heat capacity that is not on the roster. The renewable energy developers can connect to existing or still to be commissioned systems with free and uncommitted capacity.
The minimum project size is 250 MW, with a requirement of 80% availability per year. The share of renewable energies must be more than 51%, whereby storage is permitted. This new type of hybrid could be beneficial for many private as well as government coal projects that, due to their high generation costs, have no buyers for their full capacity.
The same call for tenders was recently published with new submission and opening deadlines for July 2021, suggesting an extension.