The Union Power Ministry and the Solar Energy Corporation of India efforts to attract investments for up to 5 giga watt (GW) of solar power bundled with thermal power, apart from setting a new trend for firm, round-the-clock power supply from renewable energy sources will help salvage some of the distressed, stranded thermal power assets.

Recently, the Ministry of Power has issued guidelines for round-the-clock power procurement from renewable energy sources which also provides for renewable purchase obligation for the renewables segment.

Apart from wind and solar hybrid project proposals, which is a new focus area, the government is keen that the renewable energy power supply becomes more reliable and is able to meet constant power supplies. Since it is not possible to rely fully on solar or wind, the government is seeking to bundle this up with thermal power.

Significantly, this bundling will also be a boon for some of the stranded thermal power assets, estimated to be 20-25 GWs. While this will not help salvage all of the stranded thermal assets, about 5 GW could be salvaged factoring that 50 per cent of power is taken care of by the renewable energy in the new projects.

While the lowest tariffs discovered for wind power generation for wind and solar is averaging below ₹3 a unit and in some of the recent bids, it is in the range of ₹2.36 and ₹2.43 per unit, it is competitive and possibly cheaper than the thermal power which is much higher in current day supplies for various Discoms estimated at ₹5-6 per unit.

Taking this a step further, the government is proposing to consider battery power backup. However, at the current prices, it works out to about ₹6.5-7 crore per MW and about ₹7 per unit. So, if 20 per cent of the power supply comes from battery power source, which adds to say about ₹1.2 to ₹1.4 per to unit cost when added to solar, the overall supply works out to about ₹4-4.20 per unit, according to Girishkumar Kadam of ICRA.

So this tariff is workable given the current supply rates for thermal power being sourced by many Discoms.

As of financial ended March 31, 20020, the country’s total installed capacity of standalone wind was about 38 GW and that of solar at 35 GW, totalling 73 GW.

While one of the constraints for wind solar hybrid has been the availability of sites now restricted to only some States, where wind and solar hybrid projects can be taken up, the bundling of solar with thermal and possibly battery backup is possible across majority of the States.

Since the nature of solar energy and wind energy supply is well known where the solar tends to peak during day time and wind during the night, Discoms are wary about fully tying up for their supplies, especially during peak hours. The bundling of power either through thermal power or battery backup would help further accelerate the growth of the sector, given the likely tariffs at about ₹4 a unit.