Hybrid renewable tariffs likely to continue at premium, says Ind-Ra

Representational image

The upcoming wind-solar hybrid auctions will spark cautious optimism among independent power producers, India Ratings and Research (Ind-Ra) said on Monday.

The Ministry of New and Renewable Energy issued tariff-based competitive bidding guidelines for power procurement from grid-connected solar-wind hybrid projects during October 2020.

The move is aimed at promoting large grid-connected wind-solar hybrid systems for optimal and efficient utilisation of transmission infrastructure and land, and thus reduce the variability in renewable power generation and achieve better grid stability.

However, said Ind-Ra, technical complexities related to grid integration and inclusion of floor capacity proportion of wind projects (at least 33 per cent of the total contracted capacity) in hybrid mix could weigh on project economics and tariff assumptions.

This is despite the competitive bidding guidelines addressing many of the issues hampering the growth of hybrid projects in the past, it added.

On the contrary, standalone renewable auctions (especially solar) are likely to garner higher interest on account of developing comfort around photovoltaic technology, improving in panel efficiency, lower volatility in generation, increasing economies of scale and decreasing operating costs.

Ind-Ra said there are a limited number of independent power producers with equal capabilities to execute both solar and wind projects on this scale, which reduces competition.

If located in the most resource-rich areas, hybrid projects at the tariffs discovered so far are likely to provide better returns than standalone solar and wind, making a good case for investments in them compared to commoditised standalone solar and wind projects.

Round-the-clock renewable power will be vital if the country has to increase its dependence on renewables and meet the ambitious target of achieving 450GW of renewable energy by 2030.

Hybrid power, whether a combination of just renewables or an optimal combination of renewables backed by conventional power, is surely a step in the right direction, said Ind-Ra.

While the initial response to hybrid power auctions had been muted, Ind-Ra expects the interest to pick-up as more developers become comfortable with both solar and wind.


(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel