Restriction on electricity injection into the national power network is blowing the wind out of wind power generation units.
According to India Ratings, a rating firm, electricity networks all over the country have reduced receipt of wind turbine generated power which is starting to threaten credit worthiness of renewable energy projects.
“It has the potential to impede capacity addition,”says India Ratings and Research (Ind-Ra). Non-availability of network to push the power generated by wind projects has majorly impaired operational strength of some wind projects, given the sizable installed capacities.
The national power network carries electricity from generators and supplies it to utilities who then on supplies it to consumers. This network, referred to as grid is severely short of requisite capacity to hand power generated from wind projects.
“The failure to address grid issues can gradually destabilise the solar projects in the ensuing years. Restriction of power injection by the grid is unpredictable, thus the ill-equipped developers have been grappling to manage their finances, barring the large ones,” the India Ratings report said.
Wind power generation depends on the speed of wind at the project locations and it is uncertain, while curtailment of power receipt by the grid is controlled by the authorities that manage the grid is, this practise of not accepting wind power by the grid is slowly shaking the fledgling renewable energy sector.
“Tamil Nadu, with the largest number of wind power project has been widely curtailing grid availability for power projects in the last three years; the phenomenon appears to have spread to Rajasthan in FY17 and FY16,” it said.
Ind-Ra believes that inadequate forecasting systems have compelled the utilities to curtail the grid. In Ind-Ra’s view, due to the relative source certainty in solar projects, generation in solar is more predictable than in wind projects.
Anecdotal evidence suggests that solar capacities in Tamil Nadu have also encountered grid issues in FY17.
The average annual grid availability for wind assets in Tamil nadu from FY14 – FY16 stood at less than 80%, while the average annual grid availability from FY11 – FY13 was around 95 per cent.
Drastic reduction in availability from FY14 onwards didn’t coincide with any major capacity addition, since total capacity of merely 604MW was added in the period FY14 to FY16 compared to total installed capacity of around 7600MW.
Grid availability and increased wind supply in 1QFY17 has significantly improved the wind energy generation (94 per cent increase over 1QFY16, source: Southern Region Load Despatch Centre). Providing certainty in grid availability can make Tamil nadu attractive for repowering of old wind turbines (1900 MW installed till 2003).
There is large solar capacity additions envisaged to come on track in Rajasthan in 2016; however the lack of assurance on the evacuation infrastructure and the grid availability can affect the credit profile of the upcoming projects.
Forecasting and scheduling regulations have been notified, wherein the generator will be penalised in case of inaccurate forecasts.
On the other hand, there is no mandate on the transmission and distribution utilities to manage the grid to ensure the ‘must run’ status which is conferred on renewable energy projects is adhered to.
Ind-Ra notes that there is no provision for compensation in case a renewable energy project is unable to supply power in the event of grid curtailment. The lack of this provision, leaves the renewable energy project stranded whenever there is curtailment and they appeal to the regulators over the non-compliance of the must run status.
Technical and commercial challenges are emerging for the distribution utilities because of changes in the energy mix. Efforts to address these challenges are trailing behind the envisaged pace of capacity addition.
The monopoly in distribution infrastructure and lack of technology aids – to predict the source risk, tests the endurance of renewable projects and consequently renewable energy remains hostage to state utilities. There is also a need to address the costs of integration of renewable energy in the grid in an equitable manner. Alex English Womens JerseyShare This