Benefits of Gujarat’s Wind-Solar Hybrid Power Policy-2018

The state of Gujarat does not stop exciting the country when it comes to renewable energy policies. Its new hybrid solar-wind energy policy is a perfect example of the same. The hybrid energy policy entitles the developer to use the same piece of land to generate energy from either solar or wind assets. In other words, developers will be allowed to set up wind power projects at solar projects sites and vice versa. This will enable an optimum utilization of land which is scarce in India.

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The hybrid solar-wind energy policy of Gujarat sets a perfect example of encouraging the adoption of renewable sources of energy. The state once led the country in terms of renewable energy generation and was regarded as a trailblazer of solar energy in India. The state generates more than 5,500 MW of wind power and 1,600 MW of solar power currently, taking the number to more than 7 GW from non-conventional sources of energy. The Gujarat government aims to add 1,000 MW wind power capacity and 2,000 MW solar power capacity each year for the next five years.

The new policy not only entitles the effective use of land to developers but also allows them to use common transmission line to evacuate the generated power. As per the release, the transmission lines for the existing power projects can be used for the proposed renewable energy project. The benefits of the policy can be enjoyed by the approved projects for a maximum period of 25 years and the policy will remain in force for a period of five years. The policy also gives flexibility to the developers to decide the capacity of the wind-solar hybrid unit, based on the PPA with customers. Developers can convert their existing solar/ wind project into a hybrid project or construct new wind-solar hybrid projects to be eligible.

Also, read Indian Wind Energy Capacity to Double in 2018

There are many other benefits of this hybrid solar-wind energy policy of Gujarat. No energy charges will be levied on the energy generated from the hybrid projects. In other words, the power generated at these sites will be exempted from electricity duty. A concession of 50% will be allowed for cross-subsidy surcharge when energy is sold to a third party and completely exempted in case the energy produced is used for captive consumption. Another 50% relaxation will be allowed in respect of wheeling charges and distribution loss.

The hybrid energy policy of Gujarat should go a long way in boosting both wind and solar power generation in the state and reducing pollution to a great extent.

 

India’s Renewable energy Capacity Enhancement

Starting out with a target of just 20 GW by 2022, the country has now confidently made another massive target enhancement to install 227 GW of renewable energy capacity by 2022. This shows how far India has come in adopting the cleaner and greener sources of power. The country is using solar power in all walks of life ranging from solar on rooftops, big parks, street lights, microgrids, to small commercial products and transportation in India.

India has raised its renewable energy installation target from 175 GW to 227 GW by 2022. India has already attained an installed renewable energy capacity of 70 GW. The country currently ranks fifth in terms of renewable energy capacity with an installed capacity of 70 GW. The country has another 40 GW under tendering and construction phase. The target enhancement is a big blow to criticisms about India being able to achieve its 175 GW by 2022.  With this addition, the country will rank amongst the top three nations (after USA and China), having made considerable investments in the sector.

Solar India

The ministry believes that the country will overachieve its target owing to new schemes like floating solar, manufacturing-linked solar and offshore wind projects. Other than these, the government is also planning to promote solar application aggressively in rural parts of India with schemes like KUSUM scheme (Kisan Urja Suraksha evam Utthaan Mahaabhiyan) and SRISTI scheme.

Finance remains one of the biggest hurdles in the implementation of solar in India. The additional 52 GW capacity would require an additional investment of $50 billion over the coming years. Solar has become too mainstream in India and conventional power companies are already stressed.
There is a huge demand for power in India. The thermal power sector is feeling the pressure with falling tariffs and underutilization of power plants. Leading Indian private power companies are already seeking compensatory tariff which is being denied by the SC. In such situations, these companies are left with no other option than applying for bankruptcy protection. The NPA in power sector has almost doubled from the last year levels to INR 70,000 crore presently. The RBI’s ruling on stressed power assets earlier this year has accentuated the pressure on the power generating and distributing companies. The said renewable energy target enhancement to 227 GW will further decrease the proportion of thermal generation in the overall power mix in India in future. The National Electricity Plan had projected the average utilization of thermal projects at 58% earlier. The draft tariff policy will also mandate renewable purchase obligation on states and distribution companies will have to purchase power from renewable energy projects.

Diu Solar

Diu District is the tenth least populated district in India. It is located on the western side of India, receiving a high amount of solar light. Diu was recently named as one of the smart cities in India and is setting an example for the entire nation in setting up a clean energy roadmap. The island used to earlier import all its power needs from the adjacent state of Gujarat and spend close to INR 80 lakh per month for the same. Also, people used to only get 59-60 kV voltage, instead of 66 kV, due to transmission and distribution loss.

Also, read about the large potential of mini and micro grids in India’s rural markets.

It has now installed a 9 MW solar park that helps in meeting close to 30% of the island’s daily power requirement. The transmission losses have reduced and consumers also pay less power tariff. The plant was built in two phases. Phase I (3 MW) was executed by BHEL and launched in 2016 and Phase II (6 MW) was launched recently in February 2018 was executed by Ujaas Energy.

Solar on island

The island is also planning to set up 6.8 MW wind power plant by 2019, which should make Diu completely energy independent. The island is also setting up rooftop solar plants at a rapid pace with 79 government buildings now having a rooftop solar plant on their rooftops, generating 1.27 MW annually.

The Diu government is also encouraging local residents to install rooftop solar plants and is also giving a subsidy of INR 10,000-50,000 for installing 1-5 MW of rooftop solar panels.

Renewable energy is an ideal solution to power islands which are cut off from the mainland and have to incur huge costs as well as losses to procure power from nearby towns. Other island nation of Andaman & Nicobar does not have grid connections with the nearby land and is thus exploring solar plus storage options.

Smart Grid and Grid Integration is the Need of the Hour

The rapidly declining cost and improving efficiency of renewable energy sources like wind and solar have led to increasing adoption of these distributed energy technologies by people and third-party service providers. As global warming and climate change concerns increase,  a faster adoption of clean energy forms is inevitable. However, the existing electric utility business models are not adequate enough to tap the growing potential value of distributed energy generation. It is time for them to sit up and take notice and start adapting to the changing trends in the electricity sector. While Utility countries in the West are already investing in distributed energy resources to stay relevant, Indian utilities like NTPC, Reliance Power and Adani Group were the early adopters, making large-scale commitments.

ElectricGrid

 

The electricity sector in major countries is experiencing a paradigm shift owing to disrupting technologies like distributed energy, electric vehicles, advancement in communication and controls etc. These advancements have proven to be more pocket-friendly, efficient and sustainable. An increased investment by utility companies especially in the west in DER (distributed energy resources) shows that solar energy has grown to become too mainstream. A large number of customers are signing up for solar programs, which means lesser revenues for the utilities. As a result, distribution energy is constantly facing the heat from large utility companies to escape the fate similar to German utilities.

However, it should be understood that a proper balance between grid connectivity and distributed energy is required. For example, rooftop solar will be not efficient at night or during cloudy days. Similarly, local power services are vulnerable to a power outage, especially after storms or other natural disasters.

For centuries, utility companies have enjoyed the status of monopoly businesses when it came to power supply. However, the time has come for them to adapt and change their roles from being the “energy generators” to “energy distributors”. Therefore, grid management and integration, combined with innovative business models is the need of the current hour. A future regulated distribution utility has an important role to play in the faster and widespread deployment and integration of distributed energy. This entails a huge amount of investment in grid infrastructure. The utility business model should be designed to provide better, simpler, and more elegant customer-centric solutions. There are many advantages of adopting new utility business models.

a) The new business model will lead to reduced environmental impact.

b) Implementation of better net metering laws could encourage people to participate and become partners and strengthen the buyer-seller relationship.

c) Better monitoring could lead to more cost-saving options and value creation at the retail customer level.

d) A more stable electricity grid, greater economic efficiency, and lower costs are other benefits.

The utility monopoly will surely shrink. It’s time for them to adopt a natural transition as distributed generation, electricity storage, and energy management technologies make rapid advancements. Concepts of community solar and microgrids are also fast growing and running successfully in many parts of the world, especially places with no grid connection. It is high time that governments worldwide announce huge investments in strengthening the grid and developing a more smarter version.

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India is a huge county and a large portion of the Indian population still lives in darkness. The situation is even worse in villages, where people have to go to nearby towns for charging their mobile phone batteries. Thanks to solar lights and chargers, the condition has improved these days. The Indian rural market, therefore, offers a large potential for micro and minigrid projects which will help people meet at least their basic household needs.

What is a Microgrid

According to MNRE, a “Minigrid” is defined as a system having a renewable energy (RE) based electricity generator (with capacity of 10KW and above), and supplying electricity to a target set of consumers (residents for household usage, commercial, productive, industrial and institutional setups etc.) through a Public Distribution Network (PDN).

A “Microgrid” system is similar to a minigrid but having a renewable energy based generation capacity of below 10KW. Micro and minigrids generally operate in isolation to the electricity networks of the DISCOM grid, but can also interconnect with the grid to exchange power. If connected to grid, they are termed as “grid connected mini/ microgrid’.

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Components of a Microgrid

The microgrid system consists of:

  • Solar panels/ other RE source
  • Inverter and batteries
  • Low-voltage power distribution network
  • LED lamps, compact fluorescent lamps, fan etc. for households

Other components include charge controller, cables, circuit breakers, junction boxes etc. These components should confirm to the technical requirements and quality standards specified by the concerned government regulator or Ministry.

Types of Microgrids

The microgrids can be classified into various types based on the function they perform:

  • Off-grid microgrids include microgrids on islands and other remote sites which are not connected to a local utility network.
  • Campus microgrids are fully connected to a local utility grid, but also maintain some services in isolation from the grid, for example during a power outage. For example universities, corporates, prisons, military and hospital campuses.
  • District Energy microgrids provide electricity as well as thermal energy for heating (and cooling) of multiple facilities.
  • Community microgrids are integrated into utility networks and serve different customers within a community. They serve as a reliable power supply for important community assets.
  • Nanogrids comprise of the small discrete network units which can operate independently.

New Policy on Microgrids by MNRE

The Ministry of New and Renewable Energy recently released a draft policy on micro and minigrids that will run on renewable energy sources like solar, wind energy, hydro and biomass plants. The policy aims to achieve a target of 500 MW of total capacity over the next five years. India is targeting to set up nearly 10,000 solar, wind and biomass-based power projects in five years in rural areas based around the concept of microgrids.

The underlying principles of the Policy are listed below:

  • Mainstream RE mini/ microgrids for enhancing access to affordable energy services, and improving local economy
  • Streamline project development procedures for ESCOs
  • Provide operational frameworks to operate along with the Distribution Company (DISCOM) grid
  • Optimize access to central financial assistance and other incentives
  • Foster innovation in mini grid models to cater to rural needs

Tariffs for Using a Microgrid

According to MNRE’s draft policy for microgrids, the tariff may be set as follows:

(i) Where no subsidy or grid connectivity is provided- As per market

(ii) Where subsidy is provided – With concurrence of defined State government authority

(iii) Where grid is connected – State Electricity Regulatory Commission (SERC)

Existing Microgrid Projects in India

Many small enterprises have been installing microgrid projects in the rural parts of India. Some of the popular ones are OMC Power (in UP), Mera Gao Power (UP), DESI Power (Bihar), Naturetech Infrastructure (UP and Bihar), Simpa Networks (Karnataka).

Other notable microgrid projects in India are deployed in Baikampady Mangalore, Neelakantarayanagaddi village, Mendare village, and Kalkeri Sangeet Vidyalaya in Karnataka (by SELCO). Greenpeace has set up solar microgrid project in Dharnai village of Bihar. The Chief Minister’s residence in Bihar is also run on a solar microgrid.

Challenges for Indian Microgrids

  • Funding
  • Subsidized kerosene
  • Uncertainty around tariff payment
  • Absence of large commercial loads in villages
  • Government plans about Grid extension
  • Different forms of power – AC/ DC.