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Last Updated : May 22, 2018 04:36 PM IST | Source: Moneycontrol.com

Podcast | Does hybrid energy policy make sense for India? Find out.

The Ministry of New and Renewable Energy announced a new wind-solar hybrid policy to boost India's renewable energy industry.

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The government has given the country’s booming renewable energy industry a serious boost. The Ministry of New and Renewable Energy announced a new wind-solar hybrid policy last week that will see the installation of wind-solar-hybrid plants—where both windmills and solar panels are on the same piece of land.

So why does a hybrid policy make sense for India? The shortcomings of both wind and power generation separately. Solar and wind power both work only when their source of energy is good. Thus only when the sun shines at a particular intensity will the solar panels convert it into electricity and similarly, a relatively high windy day is needed to rotate the blades at a meaningful speed to generate current.

A hybrid project helps deal with this inconsistency and power can be generated from a plant almost round the clock. The other shortcoming is land, or rather the cost and lack thereof. Apart from the cost of equipment, one of the biggest costs, like it is for most industries India, is land acquisition.

The industry had requested a hybrid policy that would help earn better return on their capital. It looks like their prayers have finally been answered.

An MNRE official told the media, “In India…small wind-solar hybrid projects are under initial stages of implementation. But we realized there’s a need for a policy framework to bolster growth in this segment of renewables. Going hybrid also puts a sort of check on the intermittency of solar or wind, if considered separately.”

According to officials, the ministry is looking at launching a scheme for new hybrid projects which are 10 to 15 per cent cheaper than 100 per cent solar or wind projects. Under the scheme, the government will likely bid out hybrid projects on tariff based competitive bidding.

These projects could then be set up anywhere in India, depending on feasibility and land availability. Sources said the efficiency of such projects ranges from 40-45 percent as the two sources, wind and solar, complement each other. On the other hand, 100 percent solar or wind projects have shown efficiencies of 20 to 30 percent.

According to media reports, The centre has set an ambitious target of 175 Giga-watts of installed capacity from renewable energy sources by 2022, which includes 100 GW of solar and 60 GW of wind power capacity. That is an increase of over 100GW from the total renewable power installed capacity in India currently, which is about 70 GW. It is expected that by 2030, approx.

40 percent of India’s installed capacity will be from renewable power. Most of the incremental power generation capacity is renewable in nature. India is rapidly increasing its share of renewable energy sources but still relies on coal, oil and natural gas and the related carbon emissions for 80 percent of its electricity.

That said, the primary objective of the govt’s wind-solar hybrid policy is to provide a framework for promotion of large grid connected wind-solar PV hybrid systems for optimal and efficient utilization of transmission infrastructure and land. This will achieve better grid stability. Studies have shown that in India, solar and wind resources are complementary to each other and the hybridization of these two technologies would help in minimizing the variability.

"Solar and wind power being variable in nature pose certain challenges on grid security and stability and therefore suitable policy interventions are required not only for new wind-solar hybrid plants, but also for encouraging hybridisation of existing plants," the ministry said.

The new policy also encourages new technologies, methods and solutions involving combined operation of wind and solar PV projects. It talks about the integration of both the energy sources i.e. wind and solar at AC as well as DC level. The policy also provides for flexibility in the share of wind and solar components in the hybrid project, subject to the condition that, rated power capacity of one resource be at least 25 percent of the rated power capacity of another resource for it to be recognised hybrid project.

The MNRE’s final policy also permits the use of battery storage in the hybrid project for optimising output and reducing variability. The policy makes it mandatory for regulatory authorities to list out and implement the necessary standards and regulations for such hybrid systems. Under this policy, the central government will extend all fiscal and financial incentives available to wind and solar power projects to hybrid projects. It will also support technology development projects in the field.

The power generated from hybrid facilities can be used for many purposes: Captive purpose; Sale to  third-parties through open access; Sale to various state Discoms either at tariff determined by State Electricity Regulatory Commissions or through a transparent bidding process and Sale to Discoms at average power purchase cost.

If we look at the state of renewable energy in India, the sector had run into rough weather after a strong start, both at the operating level as well as the regulatory level. The poor financials of state electricity boards forced them to default on their power purchase agreements or PPAs. Falling equipment costs and increased domestic and foreign competition with access to cheap capital sent power tariffs crashing. Now with hybrid units, that would enable more electricity generation, and yields for investors can improve substantially.

Superimposing wind and solar resource maps for India shows large areas where both wind and solar have high to moderate potential. Existing wind farms have the scope of adding solar PV capacity and, similarly, there may be wind potential in the vicinity of an existing solar PV plant.

Experts say India is an ideal market for hybrid projects, considering that many states are rich in both wind and solar energy resources. Gujarat, Tamil Nadu, Maharashtra, Karnataka, and Andhra Pradesh have large capacities of both wind and solar power projects.

“It is a great combination because then you have steady power coming from six in the morning to six in the evening from solar, and then have wind which starts around 12 and goes on till about two or three in the morning,” according to Ramesh Kymal, India CEO of wind turbine maker Siemens Gamesa.

Hybrid projects allow power producers to better use land and electricity transmission infrastructure.  These two components make up around 25% of the cost for a renewable energy plant. With hybrid projects, the wind and solar components will feed power into the same transmission lines, allowing companies to have almost twice the capacity on each site and to earn better returns on their investments.

India’s present transmission infrastructure is less than sufficient for handling the increase in clean energy capacity. Hybrid projects could help utilize these grids more efficiently. “Going forward, the grid is going to be a challenge so hybrid is the best, considering the bottleneck. That makes more economical use of your (electricity transmission) facility,” said Ankur Agarwal, a senior analyst with India Ratings and Research, told media outlet Quartz.

Some companies had experimented with hybrid projects a while ago but the sector is now gaining momentum. In January this year, the Solar Energy Corporation of India had invited expressions of interest or EoIs from engineering, procurement, and construction contractors to develop a 160 MW large-scale solar-wind hybrid project with an energy storage system in Ramagiri district of Andhra Pradesh.

NTPC, too, had invited tenders to set up a 3.5 MW solar+wind hybrid power project at NTPC Kudgi in Karnataka. In April, Delhi-based renewable power producer Hero Future Energies commissioned a 50 MW pilot project in Karnataka, where it put up solar panels on an existing wind farm.

There is an employment boom waiting to happen in the renewable energy sector. According to the ILO, the International Labour Organisation, more than 3 lakh workers will be employed in the solar and wind energy sectors in India to meet the country's target of generating 175 GW of from renewable sources by 2022.

"To meet the target, the number of workers required by ground-mounted solar, rooftop solar and wind power projects, will need to increase… The potential for employment creation is conditional on the domestic capacity of solar module manufacturing and the establishment of vocational training programmes and certification schemes," the ILO report observed.

For the next few years, however, India is likely to see mostly small-scale hybrid plants or projects where companies will convert their wind or solar farms into hybrid ones. According to analysts, this is because Indian companies still need to manage the technical issues involved in integrating the two different energy sources.

“It is not just putting two power plants together and making it one,” says Agarwal. “People have to figure out technical feasibility, integration between the two. Systems (are required) to manage the load coming from both wind and solar.”

Hybrid projects still require battery systems to store wind and solar power and synchronize the two. Energy storage technology is expensive in India as well as globally, and this will spike costs for the provider until the storage market develops in India.

Renewable power has low utilization rates and if the power generated is not evacuated to the grid, losses of the generation companies will mount. While hybrid policy will definitely tackle a key pain point for the sector, the major bottleneck remains. The government will need to make state electricity boards stay true to their commitments.

Fiscally-stressed state governments are keeping renewable power as backup power and not encouraging its mandatory implementation despite rules stating that they should. Unless this systemic issue is addressed, the hybrid policy will look good only on paper.
First Published on May 22, 2018 04:36 pm
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