Power Minister Outlines Steps Taken to Integrate Renewables into the National Grid

Union Power Minister R.K Singh, in a written reply to Lok Sabha (LS), highlighted the steps taken by the central government to facilitate renewable energy integration in the national interconnected grid.

Singh said that the Center has set up Regional Energy Management Centers (REMCs) for accurate forecasting of renewable power and assisting grid operators in managing variability and intermittency of renewable power. The government has also introduced solar-wind hybrid projects, RE projects with energy storage systems, and a renewable power supply balanced with power from non-renewable sources to reduce intermittency.

The central government has initiated the construction of intra-state and inter-state transmission systems for renewable power evacuation.

The government also allows flexibility in generating and scheduling thermal and hydropower stations through renewable energy and storage power bundling.

Singh mentioned implementing Green Term Ahead Market (GTAM) and Green Day Ahead Market (GDAM) to sell renewable energy and a waiver of inter-state transmission charges on the transmission of the electricity generated from solar and wind.

To tide over the liquidity problems of the power sector exacerbated by the outbreak of COVID-19, the Government of India announced a Liquidity Infusion Program as a part of Aatmanirbhar Bharat Abhiyan on May 13, 2020. Under this intervention, REC Limited and Power Finance Corporation are extending special long-term transition loans up to 10 years to distribution companies (DISCOMs) to liquidate their outstanding dues of central public sector enterprise, transmission companies, independent power producers, and renewable energy generators.

The standard bidding guidelines for solar, wind, and hybrid projects have a specific provision for termination compensation in case of unilateral termination of the power purchase agreement. The guidelines also provide a three-tier payment security mechanism through a letter of credit, payment security fund, and tri-partite agreement between the State Governments, Reserve Bank of India, and Government of India.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, had approved the Green Energy Corridor Phase-II program for intrastate transmission systems. The program aims to add around 10,750 circuit kilometers (ckm) of transmission lines and 27,500 Mega Volt-Amperes (MVA) transformation capacity of substations. The program will facilitate grid integration and electricity evacuation of around 20 GW of renewable energy projects in states like Gujarat, Himachal Pradesh, Karnataka, Kerala, Rajasthan, Tamil Nadu, and Uttar Pradesh.

Last month, PFC and REC reduced their lending rates by 40 basis points for all types of loans. The companies revised lending rates to 8.25% for loans of renewable energy projects to give the sector a boost, where long-term funding is required. The rates were reduced due to both companies’ lower cost of borrowings in the past year.