Poonam Verma, Partner, and Aparajita Upadhyay, Associate, J. Sagar Associates
What is a hybrid power plant?
Hybrid conventionally means something that has two different types of components performing essentially the same function, or a thing made by combining two different elements. In the present era, when everything around us seems to be “hybrid”, be it a vehicle, a vegetable, or a fruit, we are attempting to explain a phenomenon that has recently been endorsed by the central government in 2018 – a hybrid power plant. A hybrid power plant, as the name implies, is a power system that combines two or more forms of energy generation. This could involve one renewable and one conventional energy source (for example, diesel-solar hybrid plants) or more than one renewable energy source (for example, solar-wind hybrid plants), with or without a conventional energy source.
Need for hybrid projects
In order to preserve the natural resources and, at the same time, reduce carbon dioxide emissions, it is imperative to integrate renewable generation technologies. A major hurdle in the implementation of renewable generation is its volatile nature. This renders renewable energy sources unsuitable as the sole source of electricity for industrial enterprises or complex consumer systems.
To ensure supply security, two or more kinds of renewable energy sources can be employed. This helps in the generation of more reliable power. There are several renewable technologies that are slowly coming to the fore, which may be integrated to supply reliable power to the grid. These, inter alia, include solar, wind, hydro, biomass, coastal and geothermal energy.
This article aims to give an overview of the most prevalent renewable generation sources for a hybrid power system in India, that is, solar and wind. Due to its dependence on sunlight, solar power can be generated only during the day. Wind power, meanwhile, usually reaches its peak at night. As a result, in a solar-wind hybrid system, power generation can be levelled throughout the day given the inherent nature of these two energy sources. This helps in meeting peak power requirements as well as improving grid reliability.
The Ministry of New and Renewable Energy, on May 14, 2018, notified the National Wind-Solar Hybrid Policy with the objective of providing a framework for the promotion of large grid-connected wind-solar photovoltaic (PV) hybrid systems for optimal and efficient utilisation of transmission infrastructure and land, reducing the variability in renewable power generation and achieving greater grid stability. This policy also aims to encourage new technologies and solutions involving the combined operation of wind and solar PV plants. Under the policy, wind-solar hybrid power plants, wind turbine generators and solar PV systems will be configured to operate at the same point of grid connection; hybridisation of the existing solar or wind plants will be allowed; and power producers will have the flexibility to add battery storage to the hybrid power plant. This will be instrumental in reducing the variability of output power, providing higher energy output and ensuring availability of firm power for a particular period.
The necessary standards and regulations for the implementation of the policy will be formulated by the Central Electricity Authority and the Central Electricity Regulatory Commission. However, the policy does not provide any specific timeline for formulating such regulations.
Policy initiatives at the state level
While hybrid power plants are gaining an increasing presence in various parts of the country, only two states, Gujarat (in June 2018) and Andhra Pradesh (in January 2019), have so far notified policies exclusively dealing with the implementation of such hybrid projects. In addition to the incentives available under the National Wind-Solar Hybrid Policy, all fiscal and financial incentives that are available to new wind and solar power projects will also be available to new hybrid projects under these state policies. The incentives to developers include providing deemed public-private partnership status, deemed industry status, deemed non-agricultural status, and exemption from obtaining pollution clearance.
In addition to the above, certain monetary benefits such as exemption from paying electricity duty on captive consumption or sale to third parties have been conferred upon hybrid power plants. The Gujarat hybrid policy envisages the purchase of hybrid power at the tariff discovered through competitive bidding to be undertaken by state discoms. Andhra Pradesh’s hybrid policy stipulates the purchase of power either at a project-specific tariff determined by the Andhra Pradesh Electricity Regulatory Commission or at a tariff discovered through a transparent bidding process with bidding parameters such as capacity delivered, effective capacity utilisation factor (CUF) and unit price of electricity.
Procurement of hybrid power
The central government has set an ambitious target of setting up 175 GW of renewable energy capacity by 2022. In pursuance of the same, the central as well as several state governments have issued tenders totalling 30,549 MW. Of this, 1,800 MW comprises wind-solar hybrid projects.
However, in recent years, the procurement of renewable energy, especially wind and solar, has been sluggish. Similarly, the response to hybrid power tenders in the recent past has been rather underwhelming. Due to the lack of interest shown by bidders, the Solar Energy Corporation of India has been forced to extend the bidding deadline for a number of hybrid power tenders. This is partly because, in order to procure renewable power, discoms have to back down power procurement from conventional sources like thermal plants. This becomes an expensive deal for discoms as the tariff for thermal power is paid in two parts – fixed charges and variable charges. So, even when the discom is not procuring power from a thermal power plant, it still has to pay the fixed charge to the thermal power developer, in addition to paying the cost for solar/wind power.
One may assume that since the government is taking such proactive steps in adding renewable capacity, the need for thermal power may be completely done away with. However, owing to the unpredictable nature of solar and wind power, the country’s energy needs cannot yet be completely fulfilled by a single renewable energy source. We still rely on thermal power plants for most of our energy needs. In such a scenario, hybrid power systems can be a near perfect solution to the variable energy needs of the country. As detailed above, solar and wind energy work in perfect harmony with each other during different times of the day. And adding battery storage to this arrangement makes hybrid power even more reliable. So much so that if implemented properly, our reliance on thermal power can gradually be eliminated.
While the response to hybrid tenders may have been slow, many key players in the energy sector are already in the process of setting up hybrid power plants across the country for captive use. Hero Future Energies was the first group to commission a large-scale wind-solar hybrid project of 78.8 MW capacity in Karnataka, which is at present being used to meet the captive power needs of the company. Siemens Gamesa India has also commissioned a 3.37 MW wind-solar hybrid power pilot for NTPC in Karnataka’s Bijapur district.
Everyone is aware of the grim reality that our mineral resources are depleting fast, apart from causing grave damage to the environment, and in the near future we will not be left with any conventional sources of energy to rely on. India has also committed to generate 40 per cent of its electricity from non-fossil fuel-based sources by 2030 as part of the Paris Agreement on climate change. Therefore, if we have to honour our ambitious commitments to the international community, we need to increase our focus on hybrid power, which could go a long way in helping the country generate power in a reliable manner that takes care of everyone’s energy needs while also taking care of the environment.