Why India Needs More Wind-Solar Hybrid Projects
Co-locating wind and solar projects is critical to hybrid projects
December 17, 2021
The intermittent nature of standalone wind and solar power sources has made it important for policymakers to promote wind-solar hybrid projects that provide a longer-duration power supply and maximize resources. Adding a battery energy storage system (BESS) to these hybrid projects would solve the problem of intermittency and ensure higher grid stability.
To boost the development of hybrid projects in the country, in 2018, the Ministry of New and Renewable Energy (MNRE) announced the Wind-Solar Hybrid Policy.
The renewable companies believe that solar and wind resources complement each other in India, and hybrid projects would go a long way in optimizing land and transmission systems.
Speaking to Mercom, Keyur Vora, Head, Wind Engineering, Amp Energy India, said, “Wind-solar hybrid projects, which harness both solar and wind energy, are fast emerging as a viable renewable energy option in India. As we advance, hybrid projects promise massive gains in the Indian renewable energy market mainly because it minimizes the resource risk of overall hybrid projects where the overloading design of the projects is significantly higher to achieve tariffs comparable to a standalone wind or solar project.”
But how cost-effective are hybrid projects? Vora said, “The cost justification is highly dependent on the availability of the interstate transmission system (ISTS) hybrid grid substation. The government needs to ensure as much grid availability as requested by the developer so that power can be dispatchable and the entire ecosystem can be sustained on a long-term basis.”
Hybrid with battery storage-a picture of things to come
Combining wind and solar can yield higher levels of electricity, as solar power can meet the daytime demand, and wind power generation tends to be stronger and night.
Adding battery storage to the mix can ensure uninterrupted power for close to 24 hours. However, battery storage adaption is still in the early stages in India, and the cost of battery storage remains high, making it economically unviable for developers.
On the prospects of integrating hybrid with storage, a top executive of a leading developer said that currently, the cost of BESS is high and so cannot be an alternative to a solar or wind project. There can be no definitive ratio in which storage can be combined with hybrid projects.
“With more and more renewables added, we will need more hybrid projects which should be co-located. For grid management, you need hybrid projects. With only solar, the supply curve is skewed. To moderate this in the evening, the supply should come from wind, pumped storage, BESS, or higher generation from thermal plants during the nighttime. Today BESS is costly. On a standalone basis, storage will be costly, so it must be mixed with hybrid projects,” he noted.
Manoj Gupta, Director- Corporate Affairs at Fortum India, concurred. He said hybrid projects would come into the equation whenever round-the-clock (RTC) power is required. “The cost of storage projects is still high. So, considering this, three to four hours of storage is fine. We need to have a different tariff for peak hours, making it attractive for DISCOMs. Solar can take care of peak power demand during the daytime, and wind can take care of peak power demand during the night time.”
Gupta agreed there can be no formula for combining hybrid projects with storage. “We need to consider the LCOE (levelized cost of energy). Three to four hours of battery storage integrated with wind and solar will be the way going forward.”
Cost-effectiveness of hybrid projects
Cost-wise, how do hybrid projects compare with standalone wind and solar projects?
The executive of a leading developer gave a breakup. “The minimum share of a technology for a project to be termed as a hybrid is now 33%. For a 1 MW hybrid project, the cost is nearly ₹60 million (~$786,840), greater than solar, which is around ₹45 million (~$590,414)-₹50 million (~$656,015), and lower than wind, which comes to around ₹70 million (~$917,980).”
“This is a rough estimate. The cost varies depending on various factors. If you go for co-location, the wind states are suitable for hybrid projects. Gujarat, Rajasthan, Tamil Nadu, and parts of Karnataka are ideal for hybrid projects,” he said.
Gupta came up with similar numbers. “The tariffs for hybrid projects will go up. Co-location is the ideal way to maximize the output of a hybrid project, but it is only possible at a few locations. The integration of storage with hybrid depends on the decline in storage cost. We can always play around with the power curve of wind.”
Tariffs will see an upward trend
The Solar Energy Corporation of India (SECI) has so far floated tenders for approximately 9 GW of hybrid projects, of which over 6 GW projects have been auctioned, according to Mercom’s India Solar Tender Tracker.
Recently, SECI invited bids for setting up 1,200 MW of interstate transmission system (ISTS)-connected wind-solar hybrid power projects (Tranche-V) across India. In the auction for 1,200 MW (Tranche-IV) held in August this year, the lowest discovered tariff was ₹2.34 (~$0.031)/kWh.
SECI’s Tranche-I & II auctions had registered the lowest bid tariffs of ₹2.67 (~$0.035)/kWh and ₹2.69 (~$0.036)/kWh, respectively.
While the tariffs have come down in the last few years, the general perception is that tariffs will go up in the short term with higher module prices and other factors affecting the solar supply chain.
“Module prices have gone up by 40-50% during the last year, and so we can’t expect the tariffs of hybrid projects to go down. SECI has plans to introduce three to four hybrid tenders each year. There is a better acceptance for hybrid projects among the DISCOMs than solar projects, which bodes well for hybrid projects,” the top executive of a leading developer said.
One of the impediments to the growth of hybrid projects in the country is land.
“Land availability is a significant challenge. Matching the scheduled commissioning date with connectivity and the long-term access (LTA) also creates delays. Hybrid projects are necessary, and the next version of hybrid projects is round-the-clock (RTC) projects. Co-located hybrid projects help in the grid stability than standalone wind and solar projects, which is another aspect in favor of hybrid projects,” the developer said.
Another hurdle is the availability of wind turbines. The turbine suppliers have been unable to supply in time.
Need for government support
Last November, MNRE issued a detailed proposal for developing wind parks and wind-solar hybrid parks. According to the document, areas with a wind potential of more than 30% capacity utilization factor (CUF) will be considered. Each park’s capacity should be 500 MW or more; however, parks of lower capacity may also be developed depending on land and resource availability.
Another developer also explained that the main challenge for wind-solar hybrid projects is the availability of land sites conducive for solar and wind development.
“Another challenge is transmission and connectivity. The projects can flourish in Rajasthan, Gujarat, and Karnataka, which are suitable for wind projects. Wind-solar hybrid projects with BESS is for the future. Pumped hydro is another technology that can be combined with hybrid projects,” the developer said.
The renewable market in India is well-positioned for the growth of wind-solar hybrid projects. As energy storage gets cheaper, these projects can become even more attractive. Governments need to get creative with land optimization programs and financial incentives to promote hybrid projects to complement the policy push.
“While more wind-solar hybrid projects are needed to optimize resources, energy storage must be incorporated into these tenders going forward. Battery storage costs are not going to get cheaper on their own. Demand for storage must be created, followed by funding for research and development, and eventually a manufacturing ecosystem,” said Raj Prabhu, CEO of Mercom Capital Group.