Partnership to Advance Clean Energy-Deployment (PACE-D)(PACE-D)

“Strategy for Development of RE Hybrids in Karnataka”

September 11, 2015

• Background

• Technical Aspects of RE Hybrids

• Commercial/Financial Aspects of RE Hybrids

• Regulatory Aspects of RE Hybrids

• Potential Policy & Regulatory Intervention Measures

2

Content

Background

3

• With deployment of over 23 GW of Wind Power installations and over 4 GW

Solar Power, we have a matured market for Wind and Solar

• Government has announced ambitious target of over 100 GW of Solar and 60

GW of Wind capacity addition by 2022

• However, development of standalone Solar and Wind power projects have

following limitations : Limited scope for optimization of Land & harnessing of RE resource Higher capital cost and higher project development time Separate connectivity & evacuation infrastructure High cost of interconnection & evacuation infrastructure and lower utilisation Variable power generation profile with seasonal variation in power output

4

Driving Factors for Utility Scale Hybrid RE (Wind-Solar)

Large scale deployment of Wind Solar RE Hybrid can be preferred solution to achieve the

ambitious plans to accomplish RE capacity targets of 100 GW Solar and 60 GW Wind by 2022

This is crucial as vast requirement for land acquisition (procurement/lease) for 100 GW Solar can

be optimized and PE infrastructure available at existing wind farms can be exploited

• Karnataka is bestowed with vast Renewable Energy potential. Parts of the State is blessed with Wind and Solar Energy resources, ideal sites for implementation of utility scale Hybrid RE (Wind-Solar) Projects

• However, no utility scale Hybrid RE Project (Wind-Solar) has been implemented in any State across India

• In this context, a Comprehensive study for development of suitable framework for promotion of Wind-Solar Hybrid RE Projects in the state is necessary

• Study initiated by PACE-D TA program to comprehensively cover technical, commercial and regulatory aspects of RE Hybrid development :– Identifying challenges for deployment of RE Hybrids in the state of Karnataka

– Formulating suitable regulatory intervention measures and policy framework necessary to address the challenges

– Enabling framework for existing Wind / Solar Power Developers in the state to explore options for development of Brownfield & Greenfield Hybrid RE projects in the State

5

Background to Hybrid RE Study in Karnataka

Assessment of RE Hybrid potential in Karnataka

6

• Progress in RE development in Karnataka (As of July 2015, KREDL):

• While 65% of the state RE potential has been allocated for RE Project development,

only about 25% of such allotted RE project capacity has been commissioned so far

• Several high wind resource rich sites have not been exploited despite allotment.

• Difficulty in establishing sustainable supply chains has resulted in stranded investments

• Land acquisition is the biggest challenge to the deployment of RE in the state*

*Climate Parliament Nov’14 Report on Re-Energizing Karnataka7

RE Potential & Assessment in Karnataka

RE SourcePotential Capacity

(MW)Capacity Allotted

(MW)

Capacity Commissioned

(MW)Wind 13,983 13,245 2,686

Small Hydro 3,000 3,001 811

Solar Grid 10,000 1,100 101

Co-generation 2,000 1,779 1,191

Biomass 1,000 370 113

Municipal Solid Waste 135 26 0

TOTAL 30,118 19,521 4,902

8

Typical Load and Wind Generation Profile in Karnataka

Maximum Generation from Wind Energy at any point was ~ 1200 MW as against installed Wind Power Plant capacity of 2686MW in Karnataka. Thus, surplus capacity in existing Evacuation/Transmission N/W can be exploited

This presents an opportunity to improve Utilization factor for Grid/Tx network through Solar Power

and combination of Wind-Solar Hybrid RE installations

Source: Karnataka SLDC : Sample Daily Load-Wind Generation Profile

Wind & Solar Potential in Karnataka

Wind Power Potential in Karnataka

  Potential (MW)  Allotment (MW)  Commissioned (MW)

Solar Radiation (kWh/m2/day) in Karnataka

  < 5.0   5.31-5.40   5.0-5.10   5.41-5.50

  5.11-5.20

  5.50 & above

  5.21-5.30  

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RE resource (Solar & Wind) potential mapping for Karnataka

Solar Radiation (kWh/m2/day) in Karnataka

Below 5.0

5.01-5.10

5.11-5.20

5.21-5.30

5.31-5.40

5.41-5.50

Above 5.50

Total No. of Substations (Belgaum)

124

220 kV 7

110 kV 53

33 kV 64

Total No. of Substations (Bagalkot)

64

220 kV 3

110 kV 36

33 kV 25

Total No. of Substations

(Chitradurga)

42

220 kV 3

110 kV 39

Total No. of Substations (Gadag)

22

220 kV 1

110 kV 14

33 kV 7

Total No. of Substations (Karnataka)

1401

Mapping of Solar & Wind Resource Potential suggests ideal location for Wind Solar Hybrids RE are Chitradurga, Bagalkot, Gadag and Belgaum

11

Voltage-wise Line Loading Capacity of substations – 1/2

However, CEA has published Manual for Transmission Planning

Criteria, 2013 which outlines special dispensation and additional criteria for

Wind and Solar Projects.

Sr. No.

Voltage (kV) Line Loading Capacity (MW)Sub-station Capacity (MVA)

as per CEA Technical Standards

1 400 450 1500 MVA

2 220 250 500 MVA

3 132 90 150 MVA

4 66 27 75 MVA

• CERC in its Regulations for ‘rates and charges for intervening transmission facility’ has specified the voltage-wise line loading capacity.

• Further, CEA (Technical Standards for Construction of Electrical Plants and Electric Lines) Regulations, 2007 and amendment in 2010, outline conditions for design of Substation Capacity and Transmission Lines

CEA’s Transmission Planning Criteria (Manual, 2013)

•The capacity factor for the purpose of maximum injection to plan the evacuation system, both for immediate connectivity with the ISTS/Intra-STS and for onward transmission requirement, may be taken as under:

•The ‘N-1’ criteria may not be applied to the immediate connectivity of wind/solar farms with the ISTS/Intra-STS grid i.e. the line connecting the farm to the grid and the step-up transformers at the grid station.

•As the generation of energy at a wind farm is possible only with the prevalence of wind, the thermal line loading limit of the lines connecting the wind machine(s)/farm to the nearest grid point may be assessed considering 12 km/hour wind speed.

12

Voltage-wise Line Loading Capacity of substations – 2/2

Additional Wind & Solar Generation capacity at Existing Grid S/S can be absorbed

without significant augmentation requirement.

13

Typical Generation Curve for Hybrid RE (Wind & Solar)

Typical Daily Solar Power Generation Pattern

Karnataka Typical Daily Wind Generation Pattern

Solar generation results in flattening

of the generation curve of Wind farm

and increases its predictability

Simulation of Energy Mix of Wind & Solar (1/2)

Wind Generation

Profiling

Solar Generation

Profiling

Simulation of Hybrid RE Gen.

at Pooling S/S

Sample data for Wind Power Project•3 days for 3 months•June to August•Time-blocks

Sample data for Solar Power Project•3 days for 3 months (same sample days)•June to August•Time-blocks

Extrapolation for 100 MW Wind PP

Extrapolation for Solar PP Capacities( 20/ 30 / 35 / 40 / 45 MW)

Boundary Conditions•Evacuation Capacity• Minimizing Generation curtailment

15

Simulation of Energy Mix for Wind & Solar (2/2)

Exploring the appropriate Wind – Solar Mix for Brownfield as well as for Greenfield

projects is the key for Optimum Utilization of the Evacuation system & cost saving

In the above scenarios, utilization of PE system up to 30-35% of existing Wind Capacity

is possible without constraint

Thus, additional Solar capacity upto 30% - 35% is feasible for RE Hybrid Projects 16

Simulation results forWind & Solar Generation Scenario

Technical Aspects of RE Hybrids

17

I. Interconnection Point

II. Metering Point

III. Transmission and Evacuation

IV. Energy Accounting

V. Scheduling and Forecasting

18

Key Technical Aspects for RE Hybrid

Interconnection & Metering Point: (1/2)

Solar Capacity to be added in existing wind farm through separate feeders

Interconnection & Metering Point: (2/2)

0

SG

0

SGSG SGProposed Solar installation (SG+ feeder+feeder bay)

WTG

Feed

ers

SGFeed

ers

To be JMR point for

Hybrid RE

Existing JMR point

Level of Metering Description0 Individual WTG/SG level

1 & 2 33 kV feeder level3 EHV side of pooling S/S at site4 Grid Substation of KPTCL

• Clear demarcation of Solar Generation and Wind Power Generation is important from perspective of energy accounting, scheduling requirement and RPO compliance

• Rules for Interconnection, Metering arrangement for RE Hybrids need to address these requirements

21

Interconnection Point

Presently Grid substation to which the Wind project is connected

Metering Point

Presently Grid substation

Existing framework not suitable for Hybrid

Existing framework considers single metering point for entire wind farm

Single metering point cannot account for Wind & solar generation separately for RPO

From perspective of RPO compliance Wind and Solar need to be separately metered

Interconnection point to be defined as HV side of Pooling substation

Metering points to be defined as either feeder level or individual generator level

(i.e., level ‘0’ or ‘1’)

As a pre-condition, incoming feeders of pooling station to have all solar or all WTGs connected to it

Existing Practice Challenges Recommendation for Hybrid

Technical Aspects-Interconnection & Metering Point

22

JMR conducted at grid substation

Energy credit on account of individual generator arrived at based on JMR reading & WTG controller data

Loss apportioning done among WTGs based on JMR reading & WTG controller data

Separate energy credit for Solar generators is not possible with no separate feeder metering at pooling station

Separate loss apportionment for Solar generator is not possible

JMR to be done at HV side as well as at incoming feeder level of the pooling substation Additional Metering infrastructure to be in place at each incoming feeder level

Energy accounting and loss apportionment to individual generator to be based on JMR reading at new metering point at pooling substation and the controller reading

Existing Practice Challenges Recommendation for Hybrid

Technical Aspects-Energy & Loss accounting

23

Entity for connectivity & planning -STU /Utility

Responsibility of setting up evacuation facility up to grid S/S – by Generator

Cost of setting up evacuation facility up to grid S/S – by Generator

Evacuation infrastructure in RE pockets to be strengthened

Evacuation infrastructure planning - no specific consideration for RE evacuation

No mechanism in place for sharing cost of evacuation with Utility

Transmission infrastructure planning to strengthen grid at wind-solar pockets of State

State level planning code to give priority for grid planning for RE Hybrid

SNA to assess & notify Hybrid Potential areas to STU to enable timely grid strengthening

Existing Practice Challenges Recommendation for Hybrid

Technical Aspects-Transmission & Evacuation

Brownfield project Upstream evacuation infrastructure

need not be upgraded – avoided cost for Utility

Green field project Optimum capacity evacuation

substation to be planned depending on Wind-Solar Hybrid potential in the region

Scheduling & Forecasting

• Forecast: Composite tool to be deployed for forecasting both wind and solar

at the same site

• Generation schedule: Schedule to be generated at pooling station level

• Challenge: Treatment for deviation settlement for wind and solar is still

evolving.

• IEGC/SEGC: Grid codes to have special provisions of deviation settlement

of RE hybrid projects

24

Technical Aspects -Scheduling & Forecasting

Commercial/Financial Aspects of RE Hybrids

25

Case I- Wind (Existing) & Solar (New) - Brownfield

• Existing PE facilities could be shared, however some augmentation would be required

like in transformers/Bays at the pooling stations for Dynamic loading

• Additional land would be required avoiding the area falling under zone of shadow

• Savings in O&M Cost (Common manpower for managing SCADA, security etc);

O&M is panel cleaning, which requires water and such are not common to wind O&M

Case-2: Wind & Solar (Both New) – Greenfield

• The infrastructure will be utilised optimally by the Hybrid RE system

• The general facilities like approach roads and logistical support will be shared.

• Allocation of common costs and shared infrastructure cost between wind and solar

could be challenge.26

Cost Benefit Parameters

Impact on CUF

Shear Effect

• Defined as the variation of

wind speed with height above

ground level

• Have significant impact on

wind turbine performance,

aerodynamics and structural

loads

Wake Effect

• Depends on the thrust and the turbulence level at the turbine

• Generally considered in the design of a wind farm in order to maximize the energy output & lifetime of machines

• Main effects are reduction in wind speed & increase in wind turbulence

Shadow Effect

• Bullet

• Alternating changes in light intensity that can occur at times when the rotating blades of wind turbines cast moving shadows on the ground or on structures

• Dependent upon wind direction and time of day

• Result in 1% to 2% loss in Solar CUF

Additional Impacts: •Decrease in wind PLF due to roughness factor of surface area by 0.5% if the solar panels are installed betn two turbines•Turbine Blades flicker to impact the CUF of Solar

COG & Tariff Workings

Assumptions

• Capital cost savings in terms of

– Land Cost and site development cost

– Cables and Transformers

– Evacuation Infrastructure

• Savings in terms of O&M expense

– (Sharing of common O&M contract)

• Reduction in CUF of Wind and Solar owing to

– Shear Effect

– Wake Effect

– Shadow Effect

COG & Tariff Workings

• Capital Cost (Considering W:S capacity ratio of 70:30)

S. No ParticularsSolar (Rs.

Lakh/MW)

Wind (Rs.

Lakh/MW)

Total Cost (Rs.Lakh/2MW)

Total Cost (Rs.

Lakh/MW)

Total Cost (Rs. Lakh

/2MW)Remarks

Total Cost (Rs.

Lakh/MW)

       A+B

Wind+Solar (without cost

saving)Hybrid (A, B)   Hybrid (A, B)

  Capacity 1MW 1 MW 2MW 1MW 2MW   1MW

1 Cost of Module per MW 356 330 686 343 686   343

2 Land and Site development cost 25 30 55 28 46 20% reduction 23

3 Civil and Ground works 50 30 80 40 80   40

4 Mounting Structure/tower 50 60 110 55 110   55

5 Power Conditioning Unit 45 0 45 23 45   23

6 Cables and Transformers 43 42 85 43 805% reduction @pooling S/S

40

7Preliminary and operative expense IDC etc. (10% of total capital cost)

49 60 109 54 109   54

8 Evacuation transmission charges 10 42 52 26 5220% reduction on Evacuation cost

26

9 Connectivity Charges 2 6 8 4 8   4

10 Total capital cost 630 600 1230 615 1216   608

COG & Tariff Workings

• Capital Cost scenario analysis for various Wind Solar Mix

602 605 608 611 614

600 L/MW

630 L/MW

615 L/MW

580

590

600

610

620

630

640

Case 1(W:S=50:50)

Case 2(W:S=60:40)

Case 3(W:S=70:30)

Case 4(W:S=80:20)

Case 5(W:S=90:10)

Rs L

/MW

Capital Cost

Hybrid Capital Cost Stand alone Wind Stand alone Solar Wind+Solar

COG & Tariff Workings

• CUF scenario analysis for various Wind Solar Mix

22% 23% 24% 24% 25%

26%

20%

0%

5%

10%

15%

20%

25%

30%

Case 1(W:S=50:50)

Case 2(W:S=60:40)

Case 3(W:S=70:30)

Case 4(W:S=80:20)

Case 5(W:S=90:10)

% C

UF

CUF

Hybrid CUF Stand alone Wind Stand alone Solar Wind+Solar

COG & Tariff Workings

• COG scenario analysis for various Wind Solar Mix

5.76 5.62 5.50 5.37 5.26

4.82 Rs/kWh

6.94 Rs/kWh

0.001.002.003.004.005.006.007.008.00

Case 1(W:S=50:50)

Case 2(W:S=60:40)

Case 3(W:S=70:30)

Case 4(W:S=80:20)

Case 5(W:S=90:10)

Rs/

kWh

CoG

Hybrid CoG Stand alone Wind Stand alone Solar Wind+Solar

Estimated Benefit for Utility

No. of Districts with predominant RE-hybrid potential in Karnataka

Chitradurga, Bagalkot, Gadag & Belgaum

Installed capacity of wind farms in each such Districts

Chitradurga 726 MW

Bagalkot ~50 MW

Gadag 716 MW

Belgaum 317 MW

Total 1809 MW

Solar capacity that could be added to existing Wind farms without PE infrastructure augmentation

30% of 1800 MW = 540 MW (considering 30% additional of existing wind installed capacity)

Avoided cost for KPTCL of setting up of evacuation infrastructure for 540 MW (including transmission substation and line cost for 400 kV or 220 kV level)

Rs. 540 Crore - Rs 650 Crore(Considering expected per MW cost of 1 Cr to 1.2 Cr for PE infrastructure)

Regulatory Aspects of RE Hybrids

34

35

Tariff Aspects

Separate FIT for Wind & Solar generation. Actual generation for Wind & Solar need to be metered

separately

Every unit of generation whether from wind or solar will receive the same tariff. Capacity share of Wind &

Solar shall be the key determinant

For each hybrid project separate tariff order depending on case specific parameters

will have to be issued

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Tariff Aspects: A Comparison

Separate Wind/Solar FIT Composite Tariff Case Specific Tariff

Limited Regulatory Process Regulatory Process required to get tariff

approved Regulatory Process required to get Tariff

Approved for every project

Flexibility for choosing the most economical wind: solar ratio will be

highest

Flexibility for choosing the most economical wind: solar ratio will be low. The regulators are unlikely to determine

tariff for a range of ratios.

Flexibility for choosing the most economical wind: solar ratio will be retained. But the rationale behind the

ratio may have to be explained before the Commission during the proceedings

For commercial purposes, wind and solar units will be operating separately

Commercially and technically, the plant will be identified as a single source of

energy

Commercially and technically, the plant will be identified as a single source of

energy

Suitable for Greenfield as well as Brownfield project since it does not

require revision of existing PPA

Suitable for Greenfield projects since the existing PPA will not be

applicable for and tariff is re-determined

Suitable for Greenfield projects since the existing PPA will not be applicable for and tariff is

determined for every project

•Exploring appropriate Tariff Model for Wind-Solar Hybrid is need of the hour

•Ease of implementation with separate accounting of Wind/Solar is important for RPO compliance

•Selected tariff model to be suitable for both Greenfield and Brownfield Projects

•Considering the above benefits, Separate Wind/Solar FiT Tariff is recommended

Potential Policy & Regulatory Intervention Measures

37

38

Required Intervention Measures

• Enabling Regulatory

environment for RE

Hybrid by KERC

• Facilitative

framework of FiT,

RPO and REC

regulations and grid

connectivity for RE

Hybrids to be in

place

• Guidelines & Eligibility

Criteria for recognition

of Hybrid RE

• Funding Support to

STU/CTU through

NCEF

• Provisioning of Fiscal

Incentives/Benefits

• Amendment to

Metering

Procedure/Protocol

• Simplified procedures

for Energy Accounting

& Commercial

Settlement

• Priority of preference

in Transmission

/Evacuation Planning

39

Potential Policy Interventions

• Guidelines & Eligibility Criteria for recognition of Hybrid RE

– MNRE to formulate suitable policy guidelines for promoting Hybrid RE

– Eligibility criteria for Brownfield/Greenfield RE hybrids and eligible technology options to be

framed;

– Potential for Hybrid RE to be assessed or SNA to be identified for the same

• Funding Support to STU/CTU through NCEF

– Funding support to STUs/CTUs through NCEF for augmenting Evacuation infrastructure

development for Greenfield/Brownfield Wind-Solar Hybrid projects

– Soft funding for Hybrid RE project developers from IREDA/REC/PFC

• Fiscal Incentives/Benefits

– To attract wind farm owners to set up hybrid RE projects (brown field/green field) in the form of

VAT exemptions, Tax benefits (Brownfield), continuation of AD benefits etc.

– Concession/ Exemption on stamp duties, local taxes/entry taxes etc.

– To compensate Loss of revenue to Wind farm owners due to loss of generation during

construction & commissioning of Solar Power in case of Brownfield Hybrid RE project

40

Potential Regulatory Interventions

• Grid Code provision for RE Hybrid

– Planning Code to be amended to add provision for consideration of strengthening of Evacuation

Infrastructure in RE pockets of the State

– Grid connectivity framework to be in place

– Planning standards for Pooling S/S and Transmission Line Loading conditions to be modified to

address RE Hybrid Installed Capacity requirements.

• FiT framework

– Notifying norms for composite tariff for Greenfield Hybrid RE project & Hybrid RE tariff

determination

– Provision for Brown field & Green field projects : project specific tariff and separate Solar – wind

tariff to be continued to be applicable for Brownfield Hybrid RE projects

• Modification to RPO and REC regulations for RE Hybrid

– Separate RPO target for hybrid RE projects

– Alternately, multiple Factor for RECs for Wind/Solar Generation by Hybrid RE project

41

Potential Utility Process Interventions

• Amendment to Metering Procedure/Protocol

– JMR to be carried out at incoming feeder of LV side of pooling station

– Additional JMR to be carried out at HV side of Pooling substation

• Simplified procedures for Energy Accounting & Commercial Settlement

– Generation credit notes to be issued based on new JMR practice separately for Solar and Wind

for hybrid RE projects

• Priority of preference in Transmission /Evacuation Planning

– Transmission planning to consider potential RE hybrid pockets in the State

– SNA to undertake hybrid RE potential assessment at clusters and intimate STU for grid

strengthening in the region

– Cost of strengthening of evacuation infrastructure beyond pooling substation (inter-connection

point) to be borne by STU/Utility

42

Way Forward

• Model Policy Guidelines for Hybrid RE Project development

– Brownfield Hybrid RE projects

– Greenfield Hybrid RE projects

• Model Regulatory Framework for RE Hybrid

– FIT Framework and norms for hybrid RE

– Modifications for Grid connectivity, Metering Code and Planning Code

• Development of Pilot Hybrid RE project scheme

– Support in development of Brownfield hybrid RE project scheme and

implementation support through regulatory process

Thank You

43

44

Potential Regulatory Interventions

Grid Code

Part 5 of the Karnataka Electricity Grid Code cover the transmission system planning and security standard. Clause 1.0 under Part 5 of the Grid Code provides the scope of the standards which currently focus on conventional generation sources based transmission planning. The said scope to be amended for including ‘additional criteria for evacuation planning for Wind-Solar Hybrid projects’

Provisions for consideration: The ‘N-1’ criteria may not be applied to the immediate connectivity of wind/solar farms with the grid i.e. the line connecting the farm to the grid and the step-up transformers at the grid station. The thermal line loading limit of the lines connecting the wind machine(s)/farm to the nearest grid point may be assessed considering average annual wind speed of the region. Transmission infrastructure shall be planned on priority to evacuate power from RE pockets (wind-solar resource rich area) of the States...

45

Potential Regulatory Interventions

FIT frame work

RPO framework

GreenfieldKERC to issue the Composite FIT for RE-Hybrid projects specifying tariff norms Tariff norms under Composite FIT order could act as ceiling norms for projects wanting ‘project specific tariff’ in the StateBrownfieldKERC Wind tariff order dated Feb 24, 2015 and Solar tariff order dated July 30, 2015 may be extended to hybrid technology such that Brownfield hybrid projects can avail separate FIT for wind and solar Similar to model PPA for wind & solar technologies, model PPA for hybrid RE projects to be approved by KERC

KERC RPO Regulation, 2011 to is up for amendment (third)Definition of ‘Renewable sources of energy’ in the said regulations, to be amended as below:“Renewable sources of energy means non-conventional, renewable electricity generating sources such as mini hydel, micro-hydel, wind, solar, biomass, urban/municipal waste, hybrid non-conventional sources or such other sources as approved by the MNRE, Govt. of India or Govt. of Karnataka”

46

Potential Utility Process Interventions

PPA for RE

Hybrid

Model PPA for Wind-Solar hybrid projects approved by KERC to

provide clarity on following aspects which shall be considered by

Utility while executing PPA with Hybrid RE projects :

Interconnection Point : HV side of pooling substation

Metering points: at interconnection point as well as at individual

incoming feeders at LV side of the pooling substation and wind

generation and solar generation shall be separately metered.

Joint Meter Reading (JMR) to be carried out both the metering

points (at interconnection point as well as at individual incoming

feeders at LV side of the pooling substation); Utility may be paid

additional administrative charges as approved by the Commission

Generation Credit Note shall be issued separately for wind and

solar generation and separately accounted for.