India’s total wind-solar hybrid capacity is set to reach 11.7 gigawatts (GW) by 2023, according to a recent report by Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research.
As India’s new and fast-growing sector, and basing the analysis on tenders allotted under various central and state government schemes, Vibhuti Garg, energy economist at IEEFA said, “We expect capacity addition will rise at a compound annual growth rate of 223 percent from 2020-2023”.
According to the report — Wind-Solar Hybrid: India’s Next Wave of Renewable Energy Growth — though the current capacity is only 148 megawatts (MW), it is pegged to increase by almost 80 times in the next three years.
The confidence for the high growth projections stem from the continuous support and incentives provided by the Solar Energy Corporation of India (SECI) and several state governments to promote the building of new wind-solar hybrid projects.
“SECI has taken the lead by regularly coming up with large tenders to scale-up market growth,” says Jyoti Gulia, founder of JMK Research.
The government is also planning to hold renewable energy auctions for round-the-clock and hybrid projects instead of plain solar or wind tenders.
Advantage Hybrid model
The report advocates wind-solar hybrid systems as it has proved to be better for managing the intermittency problem of standalone wind and solar.
Solar power can be produced during the day, while wind power is typically strongest at night this inherent complementary nature of wind and solar power make hybrid systems well-suited to meet energy demand.
Further, India’s long coastline is endowed with high-speed wind and is also rich in solar energy resources, providing a great opportunity for the wind-solar hybrid industry.
The hybrid model also helps to make clean power more competitive against traditional thermal plants. SECI’s tenders for wind-solar hybrid projects without storage, for instance, has attracted tariffs as low as Rs 2.67 per kWh, which is comparable to plain solar tariffs.
Calculation method used
To project tariff trends, the report uses a financial model for a 250MW wind-solar hybrid project without storage under different scenarios. It shows that when solar and wind are blended at a ratio of 80:20, the levelised tariff is Rs2.49/kWh, while a ratio of 50:50 results in a tariff of about Rs2.57/kWh.
But when storage is added, for instance, in the form of 2-hour battery back-up, the levelised tariff increases substantially to Rs4.59/kWh.
Clearly, adding battery storage is not currently a feasible option. “However, rapidly falling battery prices will make such an addition to these projects viable within a few years, further strengthening grid stability and reliability,” says Gulia.
Also, although wind and solar capacity can be operating at the same or different locations, co-locating reduces costs related to land, grid connection, hardware, and other installation overheads. The cost of a co-located system is 7-8 percent lower than the cost of a standalone solar generating system.
National and state policies
According to the report, developers in the wind-solar hybrid markets are grappling with issues such as lower tariffs, policy uncertainty, land constraints, integration challenges, system sizing and lack of experience.
However, as the sector matures, most of these issues will be addressed.
Today, most of India’s solar and wind power generation is concentrated in states like Gujarat, Tamil Nadu, Karnataka, Maharashtra and Rajasthan.
These states have kept a certain percentage of their renewable targets for wind-solar hybrid, along with offering waivers and incentives designed to help grow the market.
Moreover, state governments like Gujarat, Andhra Pradesh and Rajasthan have come up with their own wind-solar hybrid policies aligned with the National Wind-Solar Hybrid Policy. Soon more states will be looking at following their example.