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Key Features of the Draft National Hybrid Wind –Solar Policy

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>> The Ministry of New and Renewable Energy (MNRE), Government of India has issued a draft national wind solar hybrid policy on June  14,  2016,  with  a  target  of implementing 10 GW of such hybrid capacities by FY 2022. The key objective of the policy is to promote a large grid connected wind-solar PV system for optimal and efficient utilization of transmission infrastructure and land, reducing the vari- ability in renewable power generation and thus achieving better grid stability.

>> ICRA notes that the national hybrid policy, although still at draft stage now, is  a step in the right direction for promotion of renewable energy sector on a larger scale. This is also aided by policy & regulatory support proposed towards the hybrid projects in the draft policy, given the eligibility of hybrid RE to meet the renewable purchase obligation norms (RPO, both solar and non-solar) by the obligated entities as well as continuation of all other policy & financial benefits which are currently made available to existing wind & solar projects.

>> Given that critical infrastructure such   as land & evacuation network for wind or solar project accounts for about 10-12% of overall project cost, hybrid projects would benefit from a reduction in capital cost to some extent due to common infrastructure and land use in place. Further, the variability in generation profile is likely to be reduced to some extent by the hybridization of wind and solar projects at same site, given that generation from both the sources is at different intervals & complimentary seasons (as solar generation is available in day time throughout a year except winter & cloudy periods while the wind generation is throughout day & night subject to windy conditions with 65-70% of wind based generation during May till October in a year). This in turn would partially address the concerns of distribution utilities over the grid stability arising due to the intermittent nature of wind or solar.

>> While there are inherent advantages   in hybrid projects in optimal utilization of resources, ICRA notes that the project economics for such projects (whether for new or hybridization of existing wind & solar plants) would be critically dependent upon the tariff level which may be either feed-in tariff based or competitively bid based, as is proposed in the policy. In ICRA’s view, over- all regulatory clarity in terms of tariff norms for  hybrid  projects  remains  a  key. The Central Electricity Regulatory Commission is required to lay down generic tariff principles as well as scheduling & forecasting framework norms for such projects which would in turn provide a guidance for State Electricity Regulatory Commission (SERCs) to follow.

Key Features of the Draft National Hybrid Wind –Solar Policy

Hybridization of existing wind/solar PV plants:

Existing wind power or solar power projects, willing to install solar PV plant or wind turbine generators respectively to avail benefit of hybrid project, may be allowed with the following conditions:

(i) The hybrid power injected in to the  grid will not be more than the transmission capacity/grid connectivity allowed/ sanctioned for existing wind/solar project, so that no augmentation of transmission capacity is required.

(ii) No additional connectivity/transmission capacity charges will be levied by the respective transmission entity given that the same transmission capacity is being used.

(iii) The additional solar/wind power generated from the hybrid project may be used for captive purpose or may  be   sold:

(a) to the distribution utility company at preferential tariff determined by SERC or the latest lowest bid price discovered by Solar Energy Corporation  of  India  (SECI) or any other government agency through transparent bidding process whichever is lower; or (b) to distribution utility at aver- age power purchase cost (APPC) under Renewable Energy Certificate (REC) mecha- nism and avail RECs.

New Wind-Solar Hybrid Plants

In case of new wind-solar hybrid projects, the developer will have the option to use the hybrid power for captive use or third party sale or may sell the hybrid power to the distribution utility at a price determined by SERC for such hybrid power project. The hybrid power so purchased  by  the  util- ity may be used to offset both solar and non-solar RPO. The hybrid power may be procured through a transparent bidding process under different mechanisms.

Parameters that may be considered for bidding could be total capacity delivered  at grid interface point, capacity utilization factor and unit price of electricity.

Regulatory Framework

CERC should lay down the guidelines for determination of generic tariff for wind- solar hybrid system. Further, CERC is required to frame regulations for forecast- ing and scheduling for the hybrid systems.

Incentives

All fiscal and financial incentives available to wind and solar power projects may also be made available to hybrid projects. Low cost financing for hybrid projects may be made available through IREDA and other financial institutions including multilateral banks.

Research & Development

Government will support the technology development projects in the field of hybrid systems. Besides, support will be provided for development of standards for hybrid systems.