The Indian state of Andhra Pradesh has announced a policy to set up a solar-wind hybrid power policy. As per the policy, the state intends to set up 5 gigawatts of hybrid capacity over the next five years.
The government of Andhra Pradesh has come out with an aggressive policy to promote solar-wind hybrid power projects. The policy will contribute to the state’s overall renewable energy capacity target of 18 gigawatts by March 2022. The government intends to attract investment and participation from project developers in the hybrid market and is willing to offer significant incentives for the same.
Any projects commissioned during the five year period when the policy is in affect will enjoy these incentives for a period of 10 years. These incentives include the option to sell the power to a wide variety of potential buyers. The policy is exhaustive in terms of the definition of a hybrid project, various technologies that can be used by project developers, implementation of storage equipment, and conversion of existing projects to hybrid projects.
According to the policy, projects will be considered hybrid if the rated capacity of one of the resources is at least 25%. The minimum capacity utilization factor (CUF) for a hybrid power plant will be 40%. As an important incentive to project developers, the sale of power shall not be restricted to just distribution utilities. Developers will be free to sell power to commercial and industrial users, or use it for captive consumption, and earn Renewable Energy Certificates (RECs). This means that project developers will not have to wait for the state government to issue tenders or organize auctions to set up the projects, and would be able to do so through direct negotiations with potential buyers.
Other incentives include an option for hybridization of existing power plants with exemption for some charges, must-run status, financial incentives under the industrial policy of the state government, and assurance of payment in some cases where the distribution utilities refuse to procure power. Project developers will enjoy partial exemption from transmission and distribution charges, electricity duty, cross-subsidy charges, supervision charges, and obtaining a number of clearances.
With the policy, the government also hopes to reduce the intermittency in the grid due to the nature of wind and solar power generation. The onus of a smoother generation curve has been put on the developers as the policy calls for a unified (solar and wind, together) generation forecast from the hybrid power plants.
Andhra Pradesh plans to have 18 gigawatts of renewable energy capacity operational by March 2022. This target accounts for more than 10% of the 175 gigawatts target set for the national level. At the end of 2018, the state had an installed capacity of 17.7 gigawatts across all technologies, including 7.4 gigawatts of renewable energy, accounting for an impressive 42% share in the state installed capacity. Andhra Pradesh did have a 10% share in the national-level installed renewable energy capacity at the end of 2018.
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