CRISIL report projects 15 GW hybrid RE projects in India by 2025

India's wind-solar hybrid (WSH) renewable energy (RE) sector will reach 15 GW capacity by 2025, according to a study from the ratings and research agency CRISIL. While only 100 MW of WSH has currently been installed in India, 10 GW of generational capacity has been tendered or is already under construction. Furthermore, 4.5 GW of the hybrid pipeline includes energy storage, which will become a factor for peak-load balancing. Additionally, if the clause requiring both solar and wind aspects to be located in the same place is removed, WSH could become a significant portion of new projects, the report claims.

In its new report, CRISIL takes a look at wind-solar hybrid (WSH) projects in India, which it estimates will reach 15 GW capacity over the next 5 years.

In its new report, ratings and research agency CRISIL has looks the case of wind-solar hybrid (WSH) projects in India. A segment that it believes is fast becoming the preferred renewable energy (RE) option in India, and it estimates will reach 15 GW of generational capacity over the next 5 years.

The Ministry for New and Renewable Energy (MNRE) has not yet set a generation target for the nascent sector, however, WSH has received strong support from the central public sector undertaking Solar Energy Corporation of India (SECI) and several state governments. SECI intends to set up 5 GW of solar and wind projects with storage under the engineering, procurement and construction (EPC) mode over the next 10 years, adding to the country’s total of 37.69 GW of wind energy capacity and 35 GW of solar capacity as of fiscal 2020. WSH projects, which harness both solar and wind energy, are expected to account for a good chunk of the pipeline.

In January this year, SECI invited bids for 1.2 GW wind-solar hybrid capacity under its tranche-III tender for RE projects.

Among the states, Andhra Pradesh formulated a Wind-Solar Hybrid Power Policy in 2018 and has set a 5 GW generation target from WSH projects by 2022. Other windy states such as Gujarat and Maharashtra have also identified land parcels to develop WSH projects.

Given this, CRISIL Research estimates ~15 GW of WSH power to come up in the country over the next five years, compared with only ~100 MW today. Of this, ~10 GW is already in the works – either under construction or being tendered – and will start feeding the grid by 2024.

The agency further said that currently there are proposals to set up 3,900 MW of pure-play hybrid projects and another 4,500 MW of hybrid projects with energy storage systems. “The projects with storage are capable of catering to peak-load generation, besides improving the capacity utilisation factor. Hence, these have the potential to reduce the country’s dependence on gas and pumped hydro-based peaking plants,” it said.

“We expect hybrid tariffs to be in the Rs 2.8-2.9 per unit range, with a wind-heavy hybrid configuration. We believe the pricing will become more competitive if the co-location clause (necessitating the wind and solar components to be located at the same place) is removed,” Crisil Associate Director Pinal Mehta said.

Further adding that in the case of hybrid projects with storage capacity, it believes the weighted average tariff (peak and off-peak) of Rs 4.04- 4.30 per unit, as discovered in recent bids, is competitive with thermal power tariffs, which are at Rs 4.4 per unit.

“Also, land availability and policies such as co-location will remain key monitorables for the viability of hybrid projects. Other challenges, including adequate transmission infrastructure and technical issues such as grid balancing, would need to be addressed, too,” the report added.

As per the report, hybrid projects have found favour globally, too. Among others, China, Germany, Spain, Netherlands and the US have set up such projects to unlock value from hybrids. The advantages include lower capex costs, improved power integration and matching with the demand profile of the market.