• The MNRE has issued a draft scheme to allow bundling of renewable energy with coal power to supply round-the-clock (RTC) power to discoms
  • This capacity will be allocated through a transparent competitive bidding process
  • Eligible renewable energy sources include solar, wind, small hydro with or without energy storage
  • MNRE says this scheme will allow to scale up renewable capacity addition while providing discoms with RTC power at a cheaper rate thanks to the bundling system

The Indian Ministry of New and Renewable Energy (MNRE) is seeking to implement a new scheme to supply round-the-clock (RTC) power from renewable energy projects complemented with power from thermal (coal) power projects to help Indian electricity distribution companies (discoms) meet their renewable purchase obligations (RPO), enable them to purchase firm power at competitive rates to meet their deficits and replace expensive power, and to scale up renewable capacity additions

It has issued a draft scheme for which it has sought feedback from the Ministry of Power, and a number of central agencies and state governments and of course the discoms themselves.

The ministry says the intermittent nature of renewable energy sources and low capacity utilization of transmission infrastructure builds the case for reverse bundling of this ‘cheaper’ clean power with expensive thermal power which will then be provided round-the-clock to the discom. It can help bring down overall cost of power supplied to buying utilities and further allow for penetration of renewable energy achieving economies of scale.

Eligible renewable energy under this scheme will include solar, wind, small hydro or a combination of these with or without energy storage system (ESS). As per the proposed scheme, the generator will supply renewable energy with thermal power RTC keeping at least 80% availability on an annual basis. Of the total annual energy supplied a minimum of 51% should be renewable energy including that stored in the ESS; the remaining part will be thermal power.

This capacity will be awarded through tariff based competitive auctions. A composite single tariff for renewable energy, complemented with thermal energy shall be quoted by the bidders, reads the draft.

Either Solar Energy Corporation of India (SECI) or National Thermal Power Corporation (NTPC) or any other authorized entity to be announced by the government will be able to conduct the bidding process and sign power purchase agreements (PPA) with generators while signing power supply agreement (PSA) with the buying entity. This entity will be allowed to charge a trading margin.

The draft scheme can be viewed online on the MNRE website. Last date to submit feedback and comments is January 16, 2020.

Solar and wind power in India have secured tariffs below INR 3.00 ($0.042) per kWh thanks to competitive tender proceedings while thermal power remains expensive comparatively. 

India is chasing a massive target of 175 GW of renewable energy capacity, comprising 100 GW of solar, by December 31, 2022. That’s still some way to go. Till November 2019, India’s grid interactive renewable energy capacity had reached 84.4 GW, with solar PV contributing 32.5 GW, according to government data.