Wind and Solar Energy Policies in India: Analysis and Recommendations

Abstract

Wind and solar energy are the most prominent and reliable source of renewable energy. In India, the First windmill was established in the way back in 1988 at Mandvi village in Gujarat and a new era had been commenced. Ministry of New and Renewable Energy (MNRE) has planned to deploy 175 GW renewable energy capacity for the duration of 2015 to 2022. At present India has wind installed capacity of 37 GW including project under execution (of 13 GW capacity). To meet such an ambitious target, the government has considered to utilize wind and solar energy concurrently. The fulfillment of this 175 GW renewable energy capacity target will annually avoid the CO2eq emission of 428.6 Mt. Wind as well as solar power deployment largely regulated by government policies. The hybrid wind-solar policy declared in 2018 has changed the dynamics of standalone power projects by introducing the scope for developing hybrid power projects for harnessing energy from wind and solar simultaneously. However, study of individual wind and solar energy policies are also essential to establish a common platform for optimal utilization of resources as individual wind or solar have many commonalities in Balance of Plants (BOP). The study aims to present a comprehensive review of existing individual wind and solar energy policies along with recently declared hybrid policy in India and associated impact on the techno economic structure of power projects. Further, various kinds of barriers faced by the project developers while establishing the renewable energy-based power projects have been elaborated to pinpoint the possible amendments to achieve fast deployment in combined wind- solar power generation. Economic assets significantly contributes to the growth of renewable energy based power generation projects. Availability of investment depends on the financial environment and policy structure offered by the government for the deployment of the project. In the present study, financial analysis of wind and solar power projects has been performed in the form of Levelized Cost of Electricity (LCOE). LCOE model involves factors like capital cost, annual cash flow, project terminal cost, discount rate, cost of capital, tax rate, capacity factor and technological degradation factor. It is found that the derived LCOE of wind and solar projects (based on the data of projects installed in 2012 and repowered in 2018) are ₹4.89/kWh ($0.0698/kWh) and ₹4.05/kWh ($0.0578/kWh) respectively, which can be lowered to ₹2.36/kWh ($0.0337/kWh) and ₹2.12/kWh ($0.0303/kWh) through proper policy support, improved financial framework and technological enhancements. * The present study also focuses on the interrelationship of various parameters on wind power generation growth of seven most wind energy prone states of India, that contain 97 % of India‘s total wind power potential. The impact of state-wise policy parameters viz., Feed-in Tariff (FIT) rate, Renewable Purchase Obligations (RPO) and Power Purchase Agreement (PPA) are evaluated in terms of aggregate policy indices that indicate the likelihood of wind power deployment in that state, through multivariate statistical analysis. This study provides an insight for policymakers for a quantitative assessment of the existing policies along with other factors and assists the project developers to compare and identify locations suitable forexecution of wind farms in near future. Further, the declaration of hybrid wind-solar policy has changed the dynamics of standalone power projects by introducing the scope for developing hybrid power projects for harnessing wind and solar energy simultaneously. The techno-economic structure and the possible scenarios of the fraction of combined wind-solar sectors play a key role in hybrid power projects development. Present work focuses on the existing individual wind and solar energy policies along with recently declared hybrid policy in India; and how this hybrid policy will affect the techno-economic structure of power projects and provide conducive environment to use renewable energy projects optimally considering the usage of land and power evacuation facilities.