Top Developments that Influenced Wind and Hybrid Power Market in 2023

The MNRE issued new bidding guidelines for wind and wind-solar hybrid projects during the year


After the Wind Energy Purchase Obligation in the Renewable Purchase Obligation rules was introduced, wind installations saw a surge in 2023, adding 2.56 GW of new capacity in the first nine months of 2023, up from 42 GW at the end of 2022.

According to recent data from the Ministry of New and Renewable Energy (MNRE), the cumulative wind energy capacity, as of November 2023, stood at 44.56 GW. The country installed 1.93 GW of new wind projects from April to November.

Here are some of the top developments in the Wind Energy Sector in 2023:

In January, MNRE announced the scrapping of the e-reverse bidding mechanism as a significant move to ensure faster capacity addition for wind energy projects. The Ministry claimed that after its initial success, the reverse bidding process led to a drop in wind capacity as falling tariffs proved unsustainable for developers.

Following its announcement of the tender trajectory for renewable energy projects in April, MNRE issued an agency-wise bidding calendar for 50 GW of projects for the financial year 2023-24). The calendar includes a total of 10 GW scheduled to be tendered from May 2023 to March 2024.

The Central Electricity Regulatory Commission (CERC), later in the year, also extended the solar and wind projects commissioning deadline to be eligible for the waiver of interstate transmission system (ISTS) charges to October 1, 2023, from June 30, 2023. The ISTS charges waiver will be applicable for 25 years from the commissioning date for the transmission and sale to entities with renewable purchase obligations.

In July, the Ministry of Power introduced new guidelines for the tariff-based competitive bidding process for procurement power from grid-connected wind power projects to boost renewable capacity and meet the distribution licensee’s RPO targets. The guidelines are expected to create a transparent and fair procurement framework through open competitive bidding, ensuring competitive prices and risk-sharing among stakeholders to enhance project bankability and investor returns.

Repowering of Wind Projects

In August, the Parliamentary Standing Committee on Energy urged MNRE to expedite the approval and implementation of the revised policy on repowering old wind turbines. It recommended replacing the old turbines with advanced, more efficient ones to maximize natural resources and land usage.

In response, MNRE acknowledged the National Institute of Wind Energy‘s estimation of a repowering potential of 25,406 MW for wind turbines below 2 MW capacity. It recalled that a repowering policy was issued in 2016, and a revised policy has been prepared based on stakeholder feedback.

The Ministry’s Wind Energy Division, in December, notified the ‘National Repowering & Life Extension Policy for Wind Power Projects – 2023’ allowing the repowering or replacing of older turbines with more efficient ones, even before the end of their design life, through modifications in components such as gearbox, blades, generator, and controller.

Offshore Wind

There was a renewed focus on offshore wind projects, with the government announcing a series of strategies for their deployment.

In August, MNRE formulated three models for developing offshore wind energy projects, especially along the extreme southern and western shorelines of the country, in Tamil Nadu and Gujarat. The Ministry has also issued calls for proposals to conduct surveys on identified offshore wind project sites under the newly formulated models.

Earlier in May, the Ministry of Power had exempted offshore wind projects commissioned on or before December 31, 2032, either through power purchase agreements or on a merchant basis, from ISTS charges for 25 years from the date of commissioning.

In September, the Ministry announced plans to conduct auctions to allocate offshore wind sites along the Tamil Nadu coastline. These projects are expected to generate power for distribution through various avenues, including open access mode, third-party sale, power exchanges, or internal consumption. The first zone with four sites is expected to be tendered by February 1, 2023. The other zones with three sites would be auctioned sometime during the next financial year.

In December, the Ministry of External Affairs issued the Offshore Wind Energy Lease Rules, 2023, extending an initial three-year validity on leased areas for offshore wind projects to conduct resource measurements and surveys. The lease period is allowed to be extended by an additional two years. The leased area can range from 25 to 500 square kilometers.

Wind-Solar Hybrid Projects

As the power demand in the country witnesses a surge, peaking at over 240 GW in September, the need for round-the-clock renewables has been on the rise. Wind-solar hybrid projects help resolve the intermittent issues as the solar component generates power only during daylight hours, and the wind component helps generate power mainly during evening/night.

According to Mercom India Research, the operational wind-solar hybrid project capacity stood at 6,465 MW, with over 31 GW of projects in the pipeline.

According to the Central Electricity Authority (CEA) forecast, the all-India peak power demand is expected to reach 256.53 GW by the financial year 2024-25.

Here are a few major developments in the Hybrid Energy segment during 2023:

In June, MNRE granted an extended completion time up to March 2024 for solar-wind hybrid power projects, with bid submission dates falling between March 9 and April 10, 2021. The time extensions have been granted in response to the representations received by the Ministry from state governments and their agencies, which had issued bids with submission dates during that period.

Following wind and solar, the Ministry of Power also introduced new guidelines for tariff-based competitive bidding for grid-connected wind-solar hybrid power projects in August. The revised guidelines encompass revised bid capacity limits, altered timelines, regulations on power procurement, and penalties for delays. These changes are expected to stabilize and mitigate risks within the renewable energy sector by establishing a structured framework for long-term hybrid power transactions.