Round-the-clock renewable energy tenders worry developers

ET Energyworld.com, 27 May, 2020, 12:00 am

Developers say tender conditions do not require supplying power throughout the day, it could be called round-the-clock only in theory. "The RTC tender is not dispatchable. It doesn't state on a day to day basis how much power is needed, it only gives a monthly quota," a developer said.

Bengaluru: Renewable energy developers are uneasy about the government’s recent focus on round-the-clock solar and wind tenders, as they feel this may not be workable in practice.

The ministry of new and renewable energy conducted a round-the-clock (RTC) auction earlier this month for 400 MW of projects where the levelised tariff emerged at Rs 3.60 per unit. Renew Power was the sole winner.

Developers say tender conditions do not require supplying power throughout the day, it could be called round-the-clock only in theory. "The RTC tender is not dispatchable. It doesn't state on a day to day basis how much power is needed, it only gives a monthly quota," a developer said.

The tender also does not state how much storage capacity is required to be set up. "I don't think the winner will actually set up any storage," the person said. “This tender is neither RTC or dispatchable nor does it have any storage. MNRE is only looking at their 175GW goal and making a travesty of bids.”

The government of India has set a target of installing 175GW of renewable energy capacity by 2022.

Experts agree.

“Round-the-clock should mean power supply through the day but there is no requirement in this tender to supply power evenly or on a scheduled basis,” said Vinay Rustagi, managing director of renewable energy consultancy firm Bridge To India. “The project developer has freedom to dispatch power subject to compliance with a 70% monthly and 80% annual requirement.”

“Accordingly, the storage component would be much smaller than it would be if the distribution companies had the right to specify a dispatch schedule,” he said. “That is how coal power plants work. The discoms specify how much power is needed from say 7.15 to 7.30 etc.”

Industry maintains discoms might be unwilling to buy long-term power at an average price of Rs 3.60 in wake of the Covid pandemic.

The ministry also conducted an auction earlier this year for a 1200MW solar-wind (hybrid) storage project with assured peak power. “MNRE’s attempt to make the output profile more even is a step in the right direction,” Rustagi said.

A government official said that going forward, tenders will be decided based on the needs of discoms. “We are trying to make renewable energy close to conventional power. We are trying to overcome the intermittent nature of renewable energy. We will look into the need of the discom and everything will be decided based on their feedback,” the official said on the condition of anonymity. “All formats will be there.”