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Wind-solar hybrid systems may raise project IRR by upto 10 Percent

Wind-solar hybrid systems may raise project IRR by upto 10 Percent


Hybridisation should not only be a means if it has to serve an end purpose. Real hybridisation is when renewable energy sets higher standard for itself in terms of scheduled delivery, dispatchability write Sunil Dayal and Navdeep Gupta

Encapsulating the idea of sustainable development more than seven decades ago, the then permanent representative of India to UN had said “The Earth, the air, the land and the water are not an inheritance from our forefathers but on loan from our children. In line with above thought, India ratified the Paris agreement on climate change. The National Solar-Wind hybrid policy released by the Government of India on 14th May, 2018 is an important step in this regard.

Wind and solar are both infirm in nature, but are complimentary to each other. While solar peaks during day time, wind is not constrained by sun availability, generating energy during night time also. Even seasonality wise, solar systems are more productive during summers while wind systems are more productive in winters since the weather tends to be windy in winters.

Hybridisation of Solar and Wind technologies would help in minimising the variability, leading to high grid stability. A solar – wind hybrid plant can be developed by either installing solar panels at existing wind plants, or vice-versa. For a country like India, solar potential is fairly distributed however, wind potential is confined to few geographies only.

Thus, to achieve higher capacity utilization for a wind plant, developer need to install wind generators at a high wind zone. Hence retrofitting solar panels into existing wind plant is more efficient and hence commercially profitable. Hybrid systems involve solar PV systems and wind turbine generators being configured to operate at the same evacuation point.

In order to be classed as ‘hybrid’, the rated power capacity of one source of energy must be at least 25% of the rated power capacity of the other source. For a hybrid plant, solar, wind and evacuation capacities are estimated to enable most economical generation and evacuation, even though some energy might get lapsed during peak generation.

Apart from the reduced variability in generation for wind-solar hybrid projects compared to standalone wind or solar projects, the hybrid projects would lead to savings in capital cost in view of the improved utilisation of common infrastructure such as land, approach roads and evacuation infrastructure.

For instance, the capital cost of standalone wind and solar plant is estimated to be about INR 6.5 – 7 Crore per MW and INR 4.5 – 5.0 Crore per MW respectively. Thus, the combined cost of a standalone 2-MW wind and solar capacity plants (i.e. 1 MW each of wind and solar capacity) would be about INR 11.0 – 12.0 Crore.

The hybridisation of the wind and solar assets would lower the capital cost to INR 10.5 – 11 Crore, thus improving the returns for the developers. The estimated internal rate of return (IRR) for a wind – solar hybrid plant is estimated to be higher by about 10%, compared to standalone wind or solar power project, with other factors like PPA Tariff and terms remaining same.

Similarly, the debt coverage metrics for hybrid asset is estimated to be higher compared to a standalone wind or solar plant. In addition, the hybrid plants are likely to achieve savings in operating cost and lower cost for complying with the forecasting and scheduling regulations, which would further boost the returns for the developers.

The ultimate goal of hybridization is improvement in efficiency compared to standalone plants, which is achieved by maximizing the power injected into the transmission line thus, utilising the evacuation capacity as much as possible.

The National Solar – Wind Hybrid Policy released by Ministry of New and Renewable Energy(MNRE), Government of India is a revolutionary step in renewable energy sector. Such policy decisions are helpful for developers and aid-in converting plans into action. As a developing country, India hitherto has suffered from an ailment where from Policies are not compatible and favourable for speedy implementation and quick capitalization. When Policies undergo amendment and made developer friendly, pace of implementation goes up. For development, these augur well and makes the road easy and comfortable to ride on.

Sunil Dayal & Navdeep Gupta are both energy sector experts and have advised large IPPs, global PE funds, European Utilities, Multi and Bi-Lateral Agencies and Government on RE & Power related areas. Both are alumnus of Indian Institute of Technology, Delhi.

DISCLAIMER: The views expressed are solely of the authors and our media does not necessarily subscribe to it. We shall not be responsible for any damage caused to any person/organisation directly or indirectly.

Anand Gupta Editor - EQ Int'l Media Network


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