Vijay Katne’s Post

Inefficiencies in RTC, FDRE, Load Following, and Hybrid Tenders Solar and wind power, key to India’s energy transition, are intermittent by nature. Grid operators, who are used to managing demand-side variability, now face challenges with this new supply-side intermittency. They are now insidiously shifting this operational intermittency risk to renewable energy (RE) generators, leading to the emergence of various tender designs, such as Round-the-Clock (RTC), Flexible Dispatch RE (FDRE), and load-following tenders. These tenders demand near flexible,  load-following profiles from RE generators, increasing the complexity of these projects. RE generators are responding to such tenders by selecting suitable generation sites, generously oversizing capacities, and blending solar and wind with grid level storage. This is resulting in the following inefficiencies: Excess Generation: Oversizing leads to excess generation, especially from cheaper solar power, and since exchange realisation for this surplus power is low – it is pushing up the bid tariffs. Bias Against Storage/Wind: It’s cheaper to oversize than to invest in costlier storage, leading to underutilization of storage. Also since the LCOE of solar is lower than that of wind the bidding models cause a bias against wind in the mix. Co-Location Bias: The bidding paradigm also biases models towards Co-locating solar and wind increasing congestion at sites resource-rich for both solar and wind pushing up land costs and causing transmission congestion. Penalties and Curtailment: Oversizing leads to higher curtailment, with power curtailed to be within the Transmission corridor's capacity. This further raises bid tariffs. Solar Dominance: Lower solar costs bias generation towards solar to the detriment of wind and storage. The increasing complexity of tenders is not a sustainable solution and is causing inefficiencies and higher power tariffs. Grid operators and Discoms have many tools to balance supply and demand more efficiently by aggregating plain vanilla solar, wind, and batteries at the grid level, utilizing network effects and aggregation economies at the pool level. This is far more efficient than attempting to do this at the generator level. It is the grid operator’s role to integrate these resources to deliver a profile that meets the demand . This task cannot be delegated to generators. Doing so will only lead to inefficiency and higher costs for consumers. It is useful to remember that grid operators have many more tools like demand response and can control the demand profile also to some extent , something that is outside the legerdemain of RE generators. As the eloquent Manu Srivastava puts it “bartenders don’t buy cocktails, they make them”.

Inefficiencies in RTC, FDRE, Load Following, and Hybrid Tenders Solar and wind power, key to India’s energy transition, are intermittent by nature. Grid operators, who are used to managing demand-side variability, now face challenges with this new supply-side intermittency. They are now insidiously shifting this operational intermittency risk to renewable energy (RE) generators, leading to the emergence of various tender designs, such as Round-the-Clock (RTC), Flexible Dispatch RE (FDRE), and load-following tenders. These tenders demand near flexible,  load-following profiles from RE generators, increasing the complexity of these projects. RE generators are responding to such tenders by selecting suitable generation sites, generously oversizing capacities, and blending solar and wind with grid level storage. This is resulting in the following inefficiencies: Excess Generation: Oversizing leads to excess generation, especially from cheaper solar power, and since exchange realisation for this surplus power is low – it is pushing up the bid tariffs. Bias Against Storage/Wind: It’s cheaper to oversize than to invest in costlier storage, leading to underutilization of storage. Also since the LCOE of solar is lower than that of wind the bidding models cause a bias against wind in the mix. Co-Location Bias: The bidding paradigm also biases models towards Co-locating solar and wind increasing congestion at sites resource-rich for both solar and wind pushing up land costs and causing transmission congestion. Penalties and Curtailment: Oversizing leads to higher curtailment, with power curtailed to be within the Transmission corridor's capacity. This further raises bid tariffs. Solar Dominance: Lower solar costs bias generation towards solar to the detriment of wind and storage. The increasing complexity of tenders is not a sustainable solution and is causing inefficiencies and higher power tariffs. Grid operators and Discoms have many tools to balance supply and demand more efficiently by aggregating plain vanilla solar, wind, and batteries at the grid level, utilizing network effects and aggregation economies at the pool level. This is far more efficient than attempting to do this at the generator level. It is the grid operator’s role to integrate these resources to deliver a profile that meets the demand . This task cannot be delegated to generators. Doing so will only lead to inefficiency and higher costs for consumers. It is useful to remember that grid operators have many more tools like demand response and can control the demand profile also to some extent , something that is outside the legerdemain of RE generators. As the eloquent Manu Srivastava puts it “bartenders don’t buy cocktails, they make them”.

The International Energy Agency (IEA) reports that global manufacturing is increasingly leaning on greater climate action and a faster energy transition. It’s worth noting that while global investments in solar PV manufacturing have more than doubled—to $80 billion—in 2023, policies such as the PLI scheme provide for enabling ecosystems, ensuring India steps up its domestic manufacturing capabilities.    Interesting report; give it a read.

Predicated on addressing 21st century challenges of global warming, universal access to clean and affordable energy—ReNew remains committed to creating an equitable and progressive world.   As we cross the 10 GW mark, we reflect on a journey that is unique, rooted in scientific inquiry and advancements—be it developing real-time tracking mechanisms, reducing carbon emissions, adopting and developing AI technologies, or raising capital.   With 150+ sites in 10 states, we work with governments to build our presence along India’s geographical contours, ensuring optimal utilisation of natural resources. ReNew believes in supporting a strong and resilient India that serves as a guiding force for the developing world.   Learn more: https://bit.ly/4cSkWCB MoEF&CC Ministry of New and Renewable Energy (MNRE) Vaishali Nigam Sinha Sumant Sinha #ReNewInAction #FutureOfEnergy #RELeaders #ReNewTheFuture

Land Acquisition in Solar Projects: A nuanced approach is needed A recent article in the #EconomicTimes ET EnergyWorld explores the complexities of #landacquisition for #largescale #solarprojects in India, featuring insights from industry leaders including our MD & CEO, Shivanand Nimbargi. The article goes beyond simply acknowledging land as a hurdle. It delves into the challenges posed by fragmented land ownership, lack of transparency in pricing, and lengthy bureaucratic processes. Our MD & CEO emphasizes the need for a collaborative effort: "While land availability is a concern, a focus on community engagement and transparent procedures can help expedite acquisitions and ensure social benefits." Read the full article here: https://lnkd.in/dEmfYx22 Share your thoughts on how we can navigate these complexities to accelerate India's solar #energytransition, thanks Aarushi Koundal!