Why it’s always sunny in India’s renewable power market

India is the world’s biggest market for renewable energy auctions, in which wind and solar project developers compete to offer the lowest possible prices for zero-carbon power. Last month, the country added a twist: a call for “round-the-clock” renewable power. The winning bid was higher than the going rates for wind and solar in previous auctions. But it was also lower than what it would cost to meet peak demand with coal-fired power in some India markets.

It’s worth unpacking the mechanics of India’s round-the-clock renewables plan, beginning with what “round-the-clock” actually means. It’s not 24-7 renewable power generation from one project; rather, it’s a requirement to provide 400 megawatts of renewable power at least 80% of the time over the course of the year, and at least 70% of the time in any given month.

Wind and solar are India’s cheapest sources of renewable power, but those 70-80% capacity factor requirements are impossible to meet with one wind or solar project on its own, for two reasons.

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