Grid availability improvement during the wind season in several states, particularly Tamil Nadu, is possibly an offshoot of concerted efforts by state power utilities and stakeholders says India Ratings and Research (Ind-Ra). However, the government's continued thrust on forecasting and scheduling support is crucial for higher wind and solar power evacuation since a single wind cycle of grid availability is inadequate to conclude the programme's success. Some states continue to adopt grid curtailment as the primary tool for reducing high cost power offtake.
Large developers such as Renew Power Ventures Private Limited, Energon Power Resources Private Limited and Mytrah Energy (India) Private Limited ('IND BBB'/Stable) predict and track wind movements and share these data points with the state utilities. As per the agency, deployment of better forecasting and scheduling methods also play a major role in the overall improvement in the scenario other than strengthening of transmission infrastructure by the utilities.
Project locations in Ind-Ra's portfolio displayed grid availability improvement of about 90bp yoy to 98.42% in 1QFY18.
Despite the final forecasting and scheduling guidelines, Karnataka lags behind in implementation as reflected by low grid availability in many projects. Gujarat's availability was strong with a grid availability of 99.94% in 1QFY18, while grid availability in Tamil Nadu surged over 700bp yoy in 1QFY18 to 98.86%.
In terms of the overall improvement, Tamil Nadu contributed a major chunk with a 19.16% yoy improvement in grid availability to 89.17% in FY17.
The improvement in grid availability bodes well for existing as well as upcoming plants, particularly those in remote locations. As per the guidelines for tariff-based competitive bidding process for procurement of power from grid connected solar plants issued by the Ministry of Power on 3 August 2017, the generator needs to be compensated for generation loss arising from grid unavailability or any back down due to scheduling constraints. Therefore, as mentioned in Ind-Ra's publication dated 23 May 2017, upcoming projects would benefit will an inclusion of a compensation clause in the new power purchase agreements (PPAs), subject to adaption by respective state regulators. However, the improvement in the overall grid availability will also benefit the existing plants. Major drivers incentivising the states to improve grid availability are avoiding compensation payment to generators in future as per the guidelines and reducing risk perception of installing plants in their states by major renewable players, thereby reducing discovered tariffs in future auctions. This is because all the states would want the auctioned tariffs to be below INR2.64 per kwh, which was discovered in the second round of wind power e-auctions conducted by Solar Energy Corporation of India and an all-time low tariff of INR2.44 per Kwh for Bhadla solar project. Moreover, the recent spike in the power prices in the spot market and exchanges may have also incentivised the distribution companies to offtake more power by declaring additional grid availability.
Status-wise status on implementation of regulation on forecasting and scheduling, and deviation settlement mechanism for wind and solar generating stations at end-September 2017 is as follows:
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