Snapshot India

Hybrid solar and wind energy systems surging

In the first half of 2024, hybrid solar PV and onshore wind energy systems represented 40% of the total awarded renewable energy capacity in India. These systems involve the co-location of solar PV, onshore wind and often battery storage technologies. They are attractive for electricity utilities and corporate buyers of power purchase agreements because they help reduce the variability in electricity generation and facilitate the integration of renewables into the grid.

According to the International Energy Agency, India is a pioneer in promoting hybrid renewable power plants and can provide useful lessons for other countries seeking to minimise the impacts of variable renewable energy on their electricity network infrastructure. The overall awarded capacity for hybrid systems in India more than doubled from around 5 GW in 2023 to around 12 GW in just the first half of 2024. This represents a significant acceleration in annual growth following the launch of a solar-wind hybrid policy in 2018 by India's Ministry of New and Renewable Energy.

The goal of the policy was to establish a framework to promote large-scale, grid-connected wind-solar PV hybrid systems and to provide incentives to developers. Solar-wind hybrid systems have numerous benefits, including:

efficient use of transmission infrastructure and land;

increased capacity utilisation factors (CUF) compared to stand-alone solar PV and onshore wind plants;

lower variability in generation due to complementary generation profiles (i.e., generating electricity from solar during the day and from wind at night); and

cost-competitive tariffs compared to stand-alone wind power systems.

Hybrid solar-wind systems represented 40% of the total awarded renewables capacity in India in the first half of 2024.

India's solar-wind hybrid policy also permits the use of battery storage to provide more reliable and balanced power output. Several state governments in India have announced their own policies and incentives to promote hybrid projects. A study from Ember found that the tariff rates for hybrid projects in India range in between those for solar and wind projects.

For a 1,350 megawatt (MW) auctioned wind capacity (closed bidding), tariffs were in the range of INR 3.60-3.70 (USD 0.042-0.043) per kilowatt-hour (kWh), with a minimum CUF requirement of 22%.

For a 1,200 MW auctioned wind-solar hybrid capacity, discovered tariffs were in the range of INR 3.43-3.46 (USD 0.040-0.041) per kWh, with a minimum CUF requirement of 30%.

For a 1,200 MW auctioned solar capacity, discovered tariffs were INR 2.48 (USD 0.029) per kWh, with a minimum CUF requirement of 17%.

In India, hybrid projects with battery storage or with firm and dispatchable renewable energy commitments have higher tariffs in the range of INR 3.5-5.6 (USD 0.041-0.066) per kWh. The falling prices of batteries are expected to drive down the cost of these hybrid systems. Meanwhile, higher tariffs through the integration of battery storage will need to be weighed against the benefits of more reliable and balanced output.

Key challenges faced in installing hybrid systems include land constraints (given that many of India's high-potential wind sites have been saturated), grid integration challenges and the lack of a skilled workforce to execute the systems. Despite these constraints, hybrid systems are expected to grow further, with estimates of 30 GW of projects in the pipeline in India as of September 2024.

Source: See endnote 80 for this section.