Wind solar hybrid model struggling to take off in India

In last one year, several central and state agencies issued more than 3.2 GW of wind-solar hybrid tenders. Although, auctions for 2.4 GW of tenders have been materialized, only 1.6 GW is allotted (~35% under subscription). The auctions saw participation from only a handful of developers including Adani, Softbank and ReNew.

Because of tepid response from the industry, SECI has scaled down the capacity of one of the tenders from 2.5 GW to 1.2 GW. Two other wind-solar hybrid tenders got cancelled– NTPC, 174 MW tender in Karnataka issued in Oct 2018 and another 600 MW tender in Andhra Pradesh with storage. Clearly, certain issues are subjugating the benefits of the wind-solar hybrid model. Some of them are:

  • Low ceiling tariffs of INR 2.7 per unit set by Solar Energy Corporation of India (SECI)
  • Minimum CUF expected of 38% in the tenders, which means most of the capacity has to be wind-based. However, installing new wind capacities is a challenge in itself as most of the good high wind potential sites with grid access are already saturated. For the same reasons, even the last three wind auctions were nearly 60% under-subscribed.
  • Technical challenges in integrating both wind and solar with the grid on the DC side. As per the Ministry of New and Renewable Energy (MNRE) policy, till the time the DC metering framework is not in place, only AC integration is permitted. This reduces the cost benefits associated with DC integration in terms of utilisation of the Balance of system (BOS).

Figure 1: Wind-Solar Hybrid tender details, as of Sep 10, 2019

Source: JMK Research

*This is an EPC tender with storage option

To overcome the above challenges, a wind-solar hybrid model along with battery storage makes a good business case. At present, an optimal combination of solar, wind, and storage can provide stable round the clock power at a price of INR 6-7/ unit. With falling prices of solar modules as well as lithium-ion batteries, this cost is expected to go down further substantially, making storage a financially attractive and feasible option.