India: Round-the-Clock Power Procurement

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India explores how a round-the-clock tender can reduce renewable energy utilization costs, minimize intermittency in renewable energy, and improve the match between power supply and demand.

USAID supports partner countries to accelerate the clean energy transition by helping design and implement auctions that can rapidly scale clean energy at low prices and advance national economic and clean energy goals. USAID provides support for auctions through bilateral and regional energy programs and a variety of programs managed out of Washington, D.C.

On June 12, 2020, USAID’s Partnership to Accelerate Clean Energy Deployment 2.0 Renewable Energy (PACE-D 2.0 RE) program hosted a webinar, “System-Friendly RE Procurement through Round-the-Clock (RTC) Power.” The webinar explored how India can reduce utilization costs, minimize intermittency in renewable energy, and improve the match between power supply and demand through round-the-clock power to supply electricity at all hours with no intermittency. The webinar also discussed the shift in India’s competitive procurement approach when the Solar Energy Corporation of India (SECI) awarded a time block–based tender of 1.2 GW in January 2020 and issued an additional tender of round-the-clock power, estimated at 2.5 GW as of March 2021. The tenders sought to facilitate grid integration and higher capacity utilization of renewable energy while lowering costs for consumers.

The webinar included a panel discussion featuring representatives from SECI, distribution companies, developers, the World Bank, and financiers. It was the first in a series of webinars on RTC power. To receive updates on upcoming webinars, follow PACE-D 2.0 RE on social media or visit the PACE-D 2.0 RE website.

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Auctions are best practice for procuring least-cost energy. This competitive, transparent process helps countries meet their energy and climate goals and attract investment into their clean energy futures.
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TOOLKIT – Auctions are best practice for procuring least-cost energy. This competitive, transparent process helps countries meet their energy and climate goals and attract investment into their clean energy futures.

In today’s rapidly evolving renewable energy marketplace, it can be challenging to keep track of current best practices in renewable energy policy, innovations, and market trends. USAID developed the Renewable Energy Auction Toolkit to help international development professionals, energy ministries, utilities, policymakers, and regulators to design and successfully implement energy auctions that expand access to affordable and sustainable clean energy.

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Through the Scaling Up Renewable Energy program, USAID helps partner countries power economies with renewable energy, meet international climate commitments, and open markets to private investment and competition.
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2017–ONGOING, GLOBAL – USAID’s Scaling Up Renewable Energy (SURE) program helps partner countries meet bold climate commitments by accelerating their transition to more affordable, reliable, and accessible energy that spurs growth, powers health systems, and reduces emissions.

Through SURE, USAID provides a variety of services to help policymakers, utilities, and regulators plan, procure, and integrate renewable energy, modernize energy sectors, and create policies that enable sustainable energy markets to flourish. As more countries aim to achieve net-zero emissions by 2050 and reduce hazardous waste, SURE’s Innovation Fund supports clean energy technology, energy efficiency innovation, and a circular economy for renewable energy equipment.

Video Transcript 
We're in together here and today we're in this particular webinar together as well and it's a great opportunity to discuss some of the important issues that not only get us to greater integration of renewable energy in South Asia and India. But also gets us to a place where we can think about resilience preparing for these kinds of global crises in the future. I want to start off of course by saying good afternoon to our esteemed panelists and participants. My name is Michael Satin. I'm the Director of the Clean Energy and Environment Office at USAID in India based at the American Embassy in New Delhi. On behalf of the US Agency for International Development, I welcome you all to say I'm grateful for this opportunity to interact with all of you today. There are two main reasons that we come together today. I'm so excited about this opportunity, first I really want to take a moment and congratulate the Government of India and the Solar Energy Corporation of India for their efforts and commitment to further the deployment of renewable energy in India. Despite all the challenges posed by the COVID 19 lockdown and its impact on economic activities, the Government of India has remained committed to this initiative not only because it is the right thing to do but they understand that going forward if we let it fall if we do not continue after it then it has a potential of blowing up on our face. We want to make sure this happens; it happens in a right amount of time. So, we saw some extraordinary outcomes like the successful management of power systems during the nine-minute event on April 5th. This showed the resilience and flexibility of the power to take on a significant amount of variable renewable energy or demand assessment. He concluded that the first RTC tender of 400 megawatts with a historic low first year tariff, the real-time power market was launched, and several new initiatives were announced to support renewable energy, like for example the amendment to the electricity Act of 2003 a big step forward for India that will have ramifications across the region. The second reason we're excited about today is to reiterate the commitment of USAID to support India's renewable energy revolution and even supporting expanding this to other parts of South Asia. Through our new Asia, enhanced in growth and development through energy or as we call it the Asia edge initiative a significant pillar of the US Indo-Pacific strategy, interestingly enough or perhaps not too surprising. But it's certainly the case the US and Indian governments have had a very successful partnership over a long time in the energy sector going back to the 1950s in 2009. Our two governments established the US-India partnership to advance clean energy, more popularly known as PACE-D, which was implemented in collaboration with the Ministry of New and Renewable Energy the Ministry of Power and other government of India agencies through the PACE-D program. USAID was able to make significant contributions to India's renewable energy journey, including solar resource assessments, investment in the first gigawatts of the National Solar Mission, building the ecosystems for green bonds in India and supporting the widespread deployment of rooftop solar. All of these are benchmarks that say we're going in the right direction and we're moving at a reasonable pace. A pace that we want to accelerate now going into the future and that's a part of what today's webinar is about. Today's webinar is being organized under the second phase of the PACE-D program, implemented in partnership with the Ministry of New and Renewable Energy the second phase PACE-D 2.0 renewable energy program is designed to help States take advantage of the economic environmental and technical systemic benefits offered by renewable energy, prepared DISCOMs for the transition to a new energy paradigm, and as you might imagine improve markets for private sector investments in renewable energy technologies a very incredibly important part of this whole renewable energy revolution. This is to be achieved by making renewable energy technologies more economical and reliable to meet India's energy and economic security objectives and the program has interventions in three separate, but interlinked components. Let me tell you a little bit about just to get your taste buds working first of all strategic energy planning this is meant to improve renewable energy procurement planning by DISCOMs through national renewable energy target setting, improving understanding of value propositions of renewable energy to DISCOMs business and service delivery and establishing robust demand forecasts and renewable energy resources plan to optimize power systems at the least cost. Of course, this is always about making sure it's efficient, least cost, best provision accounting for the contextual environment. The second phase of this is scaling the grid connected distributed photovoltaic. This component will help DISCOMs realize the benefits of distributed renewable energy resources and thirdly but certainly not last just as important innovative procurement of renewable energy technologies one of the most important things we're going to do in the next several years is to make sure that the financial industries and that private sector and those who are interested and motivated to get into this area have the resources available the capital, that they can go out and make these investments and plan for the future. One important global trend has been the increasing use of auctions as policymakers seek to procure renewables based electricity at the lowest price while fulfilling other objectives. And right from the start, I'll be the first to admit India has adopted auctions in its strategy for the national solar missions and expanded it to other renewable energy technologies as well leading to record-breaking low prices for solar and wind technologies leading renewable energy countries including India are focused on the design of auctions to achieve objectives beyond the least cost of renewable energy generation, through solar, wind, hybrids, round-the-clock-renewable energy with energy storage to drive the cost of renewable energy to the system. So I'm incredibly pleased today. We have Mr. SK Mishra from the Solar Energy Corporation of India. Mr. Mishra, we are so grateful for your engagement with the PACE-D 2.0 Renewable Energy Program and driving system friendly procurement of renewable energy in India. PACED 2.0 worked with the city to evolve the concepts, bring international experience and create awareness among key stakeholders on these new procurement options. In November 2019, the PACE-D 2.0 program released a white paper on system friendly renewable energy procurement in India. As mentioned before I am so pleased, India has already moved ahead with the RTC tenders at SECI. PACED 2.0 is currently working with Indian Railways to help them adopt new procurement approaches to meet their energy needs through renewable energy. Think how incredible it is in a country where rails are some of the most prolific and widespread forms of transportation and that the property owners that are Indian Railways have investments all over the country in the form of not just rails and trains, but buildings and warehouses and residential properties accounting for their staff and making life for their team that much better. We plan to be a part of Indian Railways future. Today we hope to drive discussions on the RTC tenders by hearing the perspectives of various stakeholders like SECI, project developers, distribution utilities, development finance institutions and an international expert. I hope this will bring more insights on how to further improve system friendly procurement in India, so let me just conclude by saying that our many successes have been based on partnerships on a shared vision on value and on trust. This is true across the board, USAID and the American government, with the Government of India and its various components as I mentioned in the railways and Ministry of new and renewable energy. We look forward to continuing this partnership and working closely with them. NRI, our interstates and all of you to achieve significant results in support of India's clean energy goals. So, with that let me just say thank you all for joining us. Let me again wish you the best, the healthiest and the safest future for you and your family. And with all of that I look forward to a robust discussion today. And then presentations. I'd like to turn it over to my colleague, Anurag Mishra from USAID/ India who will present some of the elements of the RTC tenders to set the context and provide some background on RTC. Over to you buddy. Thanks, Mike, for providing the background. Good afternoon everyone. So, this presentation is put together to kind of lay the ground for the discussion with the set of panelists we have. And I'd like to kind of speak for a few minutes. India is achieving its large renewable energy. So, I will go to some of the initial slides which are just to set the context. And all of us are part of India s progress. We already have significant deployment of renewable energy in India, around 90, and in the last five years we have seen that pace of deployment is increased. But on the other hand, it has also driven the solar and wind coming and we just make them really cost competitive with the strong support from all the stakeholders engaged, as the most renewable energy development in the world which is critical for India as we can move to words and it's easy for those and to begin I speak kind of significantly pleased the renewability mix in our total capacity. It will happen some questions that is what I speak to it is couple of slides. But before I do that, I think just kind of hard reminder getting soft coming to a place where Indians we want to clean, we have already achieved cost competitiveness and knock. We have the stage we are kind of trying to integrate renewables into the system and that is where the whole discussion of system friendly procurement, round-the-clock power or other ways of improving the flexibility in the system into play and that is where we're going to discuss most of the shoes which are coming up the stage. If you're able to kind of resolve these issues, specifically, we can definitely move to the next stage as we all the three attributes of renewables variability uncertainty specific are the three critical challenges for renewables to meet round-the-clock power requirements. And, today, we'll discuss how innovative procurement approaches can kind of drive that by providing a combination of technologies to provide renewables. We have a number of issues which have emerged based on the current approaches. I will not say that the current approaches were wrong. They were really important for us to come to a stage where we have a significant deployment of renewable energy. We also have given significant cost reduction, but if you continue on these steps we will face a lot of challenges and in late a few the forces as we increase the deployment of solar invent which are the highly variable renewable energy technologies we will bring more variability the system but that also leads to a very high initial cost second is are these will also food for increase the burden on the grid management and operation where the with managers to look for more results beeping more flexibility to other blends balancing resources building new transmission capacities. I knew a lot of things that obviously led into the system. The third is it will also impact the existing resources as you see from the right hand side green box just an example where a state which has around 2000 a megawatt of total demand suddenly had a very big out of solar you will imagine what happens when the solar is generating suddenly we are going to displace the resources which is almost one third of existing and that will have a major impact from the existing resources which are already contracted to so for a number of years three challenges are basically the struggle which this comes and consumers will have in managing the variation which comes through the regime and we have also seen us so far the demand side approach is not fully utilized these days we can kind of use planning for future manipulation procurement so far we have gone through our tenders we will talk about the capacity like I need is a capacity of solar this much of win rather looking into what is the right size of renewable energy for me to which kick and need my resident and who are the best sectors who can kind of serve those needs by get a helping need match with their supply sources and the last point to discuss is why we have focused a lot on the hundreds of generation through options and all but now we have to kind of move to supply to the gazebos which include and where we have not been looking into a kind of a specific technology but we are trying to be that we are optimizing the renewables in our makes in a way that it does not burden the it's moving forward so in this context are definitely our system friendly with you provides us an apostrophe I extended the number of benefits which are driven from system finding equipment like it will reduce burden on consumers and abilities to manage the it will also benefit help us manage all our need depending on the time of the year where we need different types of capacities to meet demand it will also kind of help optimize the overall capacity as well as sources which are required which may be the most the best fit to provide for that kind of demand in the system there are a number of ways the system federal procurement approaches can be adopted I listed a few and they've all differently different places these are kind of us variations of on each other like round-the-clock our time based procurement hybrid solutions budget and today we have Fabian, one of our speaker who will touch on some of these aspects of procurement, bringing some the initial experience to this. So quickly moving on to our experience with RTC in India, this is very recent development. The Government of India has come out with the guidelines for around-the-clock power. SECI has done three tenders so far totaling a capacity of 6,000 600 megawatts and there is a huge interest in the market where we see in all the rounds of bidding there has been a significant bits which have come from the market but it also kind of showed that the pricing has been quite competitive and that's where we saw that very recently I mean any kind of lay division where they steam RE. Although these items you'll see are from India’s and leading this hot process and actual procurement and deployment to these approaches. I mean, is definitely a framework which will allow these kinds of tenders to go forward primarily focusing on meeting the needs of the states to make their RE pious but then also increase the deployment of renewable energy and achieve. It does allow for notice to be integrated including a finish energy storage as well as there are two different ways of bidding which can happen in terms of tariffs is a concept of composite leading an alternative mechanism and we will hear some of these from our speakers who have participated in these tenders as well as the one who actually designed the second program. And then the second program, which has gone through three rounds of tender, already two are kind of close already awarded and the third one is the procurement where we see that there is been a kind of a variation of options which are adopted like for example the who's trained or what whether get megawatt of ICS where it was focus more on supplying think our renewable energy with the register which the next round which is more recent one is to provide hundred percent renewable supported by register, raised around the clock. so not just focusing polio because but then only the kind of you can get this power on the day of when you need it and the third tender which is can order right now. So RTC, what it really does, it really kind of take the advantages of the capacity and understanding of the developers in understanding the profiles of different technologies and the availability of resources in the photography's and model them and provide hat to serve the need of a customer whether there's a distribution company or consumer and it also integrates our new technologies and ID platforms to really manage that process because this is all kind of real-time there are three made aware we can this RTC can happen what as we have seen in in years let or the packages demand whether you set up a kind of an amount of power you need for the day and the developer is kind of can provide that to me that they've got business on different second is you can also decide to change based x course when you can decide on different is needed for different fields laws and then a developer can design their equipment and the third one is so I think they're currently at the stage one but there is possibility that you can also start pursuing some of the other options as you go forward with these approaches in India all of the three options which are have certain benefits and challenges for example the fixed continuous demand procurement is a simple model both was supplied by and it is also expected to receive her responses from supplier but on the technical side because of this phase it can lead to a lot of surface generation of power and the question of how do we apply the top or if you're not really creating a city then there's a question the second one complex in terms of design clockwise a fixed amount of human but it will definitely allow for high potential to meet the big demand it also has certain features for exact it's kind of collectively flex in terms of design and could probably lead to a higher power the third one is higher for mature energy markets to in place therefore we will experience with that so from the program perspective we cleaned out a number of considerations for procurement of RTC power for buyers in developments I not going to all the details but definitely somewhere wire has to decide whether they would like to go for low tariffs or they would like to go for a high share of it because we have seen from our garlic that has been increased the renewable energy shape the cost of power goes off they also have to think about our different procurement options or the seasonal we are how much of the variation is there in the demand in terms of different seasons for example the variation in a state which is highly dependent on agriculture will have a huge seasonal variation versus a consumer which is like a given this probably will not have that much of seasonal variation so all of them will have impact on the design as well as the response and cost of that on the developer side are definitely the consideration for the market and how will it could the market is where they can sell their excess power or buy power to meet their demand is quite critical but there are other kind of important factors for them to consider like what are the feasible balancing options for them to are also considering different geographies to really bring in the resources which are complementary to be in the amount of consumer so from the project sign we have laid some kind of suggestions in how do we kind of improve this process going forward Italy in the short term we have to really think about objective of integrating renewables but in the long term we definitely have to think about how do we a make renewables hundred-person responsive to the demand which would require a number of other actions to happen like requirements of generation curves which have to be morning or 100 percent flexible curves or demand to fill the need of the consumer order of this come. There are other elements of project structure regulatory requirements as well as procurement processes, which we like to kind of discuss in this presentation, but in the interest of time, I will not go into the detail of each of them, and with that I'm just going to conclude my presentation. Thank you so much. Thank You Anurag for sharing challenges and current approaches as well as sharing the solutions for system friendly procurement. Now I would like to introduce Mr. Fabian, Associate Director with Navigant-Germany. Fabian is an expert in energy policy and power sector reform in particular renewable energy and energy efficiency policy and energy procurement. He earned an M.S. degree in International Political Economy from the London School of Economics. Mr. Fabian is going to provide us with an overview of international experience in round the clock and system friendly procurement and renewable energy procurement. But before he starts, I would like to request everyone to please switch off the camera and mute their mics, except the speakers. Over to you, Fabian. Thank you very much. This is Fabian Wigand. It's a pleasure to talk to you today. I hope you can get me well and I will leave out the video for now and turn it on in the presentation, to make sure we have a sufficient quality and connection. Here I'm not sure, I'm supposed to share my presentation. All right, oh you're showing. Yes, you can start your video. Thank you. Thank you very much. Well thank you so much for joining this presentation on system friendly procurement, around the clock and auctions and basically looking at internationally examples and experiences from that and I mean we what we can see basically is that we see with higher shares of renewable energy in power systems worldwide new approaches are needed to meet these challenges in our system there will be responses in the demand side integration part the grid integration strategic energy planning mark integration holistic approach is needed but particularly procurement there's as a large role to play in addressing these challenges and round-the-clock new energy procurement is a major field of engagement intervention for that so what we see that there are basically three types of benefits of round-the-clock power procurement and that's something that anorak also alluded to already it's basically that renewable energy can be made more vegetable to more clothes to follow the supply and demand curve that rubra energy should become more firm less intermittent and this can be done through on-site measures or two different locations and that renewable energy should be well be more managed by the cell actually and that the duration management should be more in the realm of the seller of the developer and that might know certain elements of the market enough of gyration patterns much better than the buyer and I will show a couple of examples from around the world where elements of this round-the-clock human have been implemented already although I have to say that few countries went as far and as whereas Mona and it approaches as India. So, the first example is the example of Chile. Here we can say that it was a major goal of the buyer to make sure that the duration patterns would more closely follow the demand patterns of the different distribution companies so what the distribution companies did they basically forecasted the long term demand patterns they put a lot of effort and there to try and somehow find out best how demand patterns would evolve over the next 15 years and then the regulator aggregated these projected supply acquirements conducted an election and what was special in this case the left hand you can see that they basically had three different supply blocks so bidders were not just bidding to produce power all the time but they were bidding for different blocks to which they would put his power and these blocks were in the end therefore following the demand requirements of the distribution companies not in real time but rather the projector determined and bidders could therefore achieve higher prices for example that's at for some an evening peak block where yeah it might be more difficult for certain suppliers to provide power than doing noon of the day what we can see is that the developers basically were pledging they were promising that they would bid and that they understood but they will also provide power during this time of the day and if they would not meet this obligation that would have to pay a penalty or in this case a clear they would simply have to provide power from the wholesale market as an alternative what was the outcome of this so you can see that actually in this auction that happened 2017 all the power that was contracted in all the blocks was for renewable energy and there wasn't any new interesting development because in the past usually and usually is certain evening blocks on item blocks ye offer supplied by power from conventional sources and in this situation renewable energy producers in conventional sources when competing together for these blocks but nevertheless all the protesters were being awarded we're from new energy sources and the price was also quite lower so I think we can see that the average contracting prices were about two point five rupees per kilowatt hour there was significantly lower than average spot market prices of course we saw that in certain blocks prices were higher but the overall distribution of price was still quite promising so it's chilly interesting example to learn from yes because prices were so low and therefore the option was high success in terms of price reduction I know in terms of providing more specialty power and it is bit too early to see to what extent this will actually work in the practice because most of this developers are currently I'm still billing these projects so we have to see whether they can really meet the supply the supply needs that they promised originally and we have to see that for being able to forecast future demand and therefore ensure that future human is meeting future demand and this comes had elaborative process to really find out what are the demands drivers in the future and how can demand it hasn't evolved in future, because it should not be based on current demand. But about the demand in the next 10 to 15 years, another example we can see is basically the case of Nevada and the USA of interesting round-the-clock human elements I think he will basically see that the utility is stated in the state wanted to ensure that they would reach the 50 percent remember in generation target by 2030 and therefore they had a PV plus storage procurement and art restoration was that in the summertime mu2t notes that would meet at a particular need for power in the evening hours and therefore basically they had like two different types of blocks and prices that's could come so bidders provide on one hand an offer for an off-peak price basically all the other times of the year and then of a four-on-three price so knowing that they might actually achieve a higher price from 4:00 to 9:00 p.m. in the evening hours and yes exactly in the end these on peak prices actually achieved Nevada was six times higher than the office prices and but therefore it does ensure that they would be able to provide power through so much in these evening times so overall prices in Nevada has been extremely low as well so the off-peak price range between one point six at one point nine rupees per kilowatt hour and the on peak price or however was rather high so the price to supply power during the summertime in the evening was from ten point four rupees two 12.1 rupees per kilowatt-hour so what we can see here of Korean from that also here it's the case that these auction became was rather recent important that are still being built what would be a way to reduce the rather high and unpick prices and summertime I think in this case cause the unpick price is only paid in summertime and bidders are basically forced to make rather expensive investments and to battery storage and for covering this evening peak which was only being practical like more compensated in the summertime so I think by a not maybe using this on a seasonal basis but having it all year round actually price could have been introduced a bit that's all so that similar to the situation and see key for round-the-clock tender and in India we've seen basically and there was competitive procurement this one point to bigger what is TS connected projects with a short power speaks power supply India and India helps also several and peak blocks and so morning people look and even peak block for which they basically am had a different output different bits and we can see that doing this peak blocks the prices were considerably lower than father of peacocks and what we can what can be see here that it might have been I mean the supply blocks that that sick he asked for from the bidders were rather long right after twelve o'clock at night and we know that the more you basically include late evening late evening production obligations that actually the longer the storage components need for that the batteries the high other the bits right so it could be mixed so maybe for say key to look at this very long supply blocks and evening and to have a precise date about that and to see it what extent may be shorter products in the evening could reduce that the cost of storage and therefore reduce the overall bits now what element is of course here that we does need to do a good job and the duration the buyers as well to really forecast both duration patterns, demand patterns and what patterns actually currently doing. So, this program, here's actually also supporting this comes to better forecast demand patterns and therefore better assess what would be good block in the evening how she longed for this block in the evening be to provide a peep our another interesting example is the idea of virtual power plants aggregators and if we have a look at a situation in Jeremy now we can see that there basically is the virtual power plant and that is bundling different renewable energy generation demand and storage assets and thereby virtually is providing the power of a power plant so a control center operates is connected and it is dispatching these assets basically based on trading on to markets and they're basically two revenue streams for these type of power plants a one hand there is reserve market so by providing reserve capacity with the grid operators providing certain payments to the special power plants and the second options to simply sell power on the wholesale market and through basically yeah like operating this rate is vegetable to geographically just a little creative power plants is in the end through some top sometimes complementary and duration profiles sometimes different demand and supply situations and different regions it is really able to provide rather third power and although it is commanding a rather and the special plans what we can learn from that case of Quattro power plants is that in in in Germany I think was quite successful initially to really provide firm reserve power and through this paneling of components and however you do journeyed in these cases you would need rather liquid power market or reserve market to these virtual power plants that consult Oh or alternatively like long-term PBS with large consumers that see additional value in this especially power and I willing and able to pay more for it we can see that India also has some examples already in some experiences aggregators so for example and I think it's particularly interesting that that India has through a large geographical system and variation in the system it has actually very complimentary feet in patterns often for no wind at a few locations or even for solar and wind at the same location and Indian status comes to financing constitutions we can see that these powers power plants of this vegetable stole up on the power of thermal power actually funded currently with solar PV and we also see that there currently some banking arrangements between this comes to take advantage of seasonal variations and final presentation I want to do one owner cases is another casement from Indian example actually might be welcome in the office it's the idea of physical hybrids where basically by physically co-locating solar and wind farms and sometimes also storage elements at one location you actually can have three examples three advantages you can have on one hand you often have a more efficient use of land and you can lower transmission costs and you usually have more power and so with yourself thank you what a learnings from the India's and physical hybrids and we can basis you that price at work shift in in secret unless 2018-2019 or a rather low there are only a little bit higher than and solo on it tend us but we're basically bringing along much more benefits for example the lower good connection costs and there are several sites are very good often complimentary solar wind resources available in India and we see that often yeah this basically have a great potential to be used further I think that the challenge might be that that in the past we have seen that that by having a busy applying uniform ceiling prices to hybrids projects all around India and in some kind of some regions some states furs might not be competitive and compared to others so we might there might be a case for further regional distinguish between ceiling prices but overall these kind of yeah colocation of projects physical hybrids of wind and solar farms have done a really good job in bringing down good connection costs so what can we learn as conclusion here I mean the round-the-clock principle is like particular to India because it is like a very modern approach but we can see that base maybe system friendly approaches are also piloted in other countries and I think there's something we can we can know a lot from India but also some elements. I'd be interested to be true to be in the Indian discussion as well and the key takeaways here is that that yes artists e-procurement elements are being on the rise worldwide with higher energy levels it challenges that often these elements are rather new and the procurement auctions are rather recent and therefore something is this you can make our early assumptions on the prices which are chief these auctions were actually quite promising we cannot let make so many assumptions yet on how reliable these progress were and actually supply the power in do it because many of them have not been built yet we can see the time based incentives we can really increase the supply demand match and reduce an emergency of rarer renewables but that only works if we have sufficient information on how demand patterns are evolving over time and when we have a system where we can recognize and pay for this value of more disposable film supply virtual hybrids back educators enable especially renewal energy for flexible power and hybrid projects can reduce the transmission costs of produce by co-locating them it is very important that we understand that system integration of renewables is basically an area well different types of power sector markets and regulation have to work together so yes we can achieve a lot and brought the clock requirement but overall we have to have need to have more market form we need more liquid policy markets and other elements ICT to ensure that the power system becomes more flexible. Thank you so much and look forward to this discussion. Thank You Fabian for this great presentation. Now I request all the attendees to please share their questions in the chat box. We’ll be taking up later after this panel discussion. Now I request Mr. Ronnie Khanna to moderate the panel discussion on RTC and its meaning and opportunities for the Indian power market. Over to you Ronnie. Thank you so much, Yogeeta. Thank you, presenters, to lay down the context so well. What I would like to do is as follows. I have a set of questions which I have already prepared. But we would also request the participants to provide their questions. I know some of you already have, but kindly do this, do so through the chat box and we will try and take as many of them as possible. As of now I would start by inviting our panel’s panelists. First of all, can I invite Mr. Mishra. Welcome. So nice to see you. Then can I invite Mahesh. With us Mr. Mahesh. Can you unmute yourself, if possible, share your screen? Fabian is already there. Thank You Fabian for joining. Mr. Abhishek Ranjan, I don't know if he is logged on. I mean there should be and Deepak, yes thank you all for joining us. This is how I propose to conduct this webinar. I will first give each of you an opportunity to speak for three to four minutes. The idea would be to, you know, please make your opening remarks about the topic of the webinar. I would also suggest a few questions which I have for the panelists, if they can try and answer this in the introduction, it will be very good. Subsequently, what we will do is that once you've gone through this one round, you know, these comments and remarks we will then try and take specific questions or we will subsequently, we can have a more open discussion. Not again. Some questions from the participants. So first and start with Mr. Mishra sir. Your comments, but before we start, I have a couple of you know questions which of you could address as a part of your introductory remarks. One would be what in your view is the long-term vision for RE in India and how does RTC play into it. I mean you know what you see is the role? How does that fit into that vision? The other is do you see a majority of the tenders coming out considering the success that's that you see a majority of the tenders that are coming out. These are the questions, if you can. Thank you, Ronnie. We because of the cost issues then convert it to the energy terms and the present tender is 80 percent is the annual CVA and the 70 percent is the monthly swear that penalties are very used not picking the next nation clause will not be implemented for that particular year and in the case of picking power tender this hundred megawatt tender is there then 300 megawatt hour daily you to supply 200 with evening ended in the morning and there is 80% month this wave is also the year it is not known at least wave in this episode so these are the wheels we understood the issues we ultimately aim is to make the renewal is the complete replacement of the conventional power that is aim but since because of the technological issue cost issue we have to go slowly on that so we thought of going in these two modes. Next we are thinking of the what model what Mr. Fabian was giving in the presentation. Thank you, Fabian. What ways that also we are trying to design the tender we have already asked for the stakeholder, second we want to so that I may not be needing the power 24 hour they may be needing power only was I able to design tender like that but I try to make it more firm that power instead of too much intermittency and all these issues but that doesn't mean SECI we are doing only round-the-clock, we are doing our type of tenders, every place has different requirement. Currently we are working with one of the states for the agriculture needs so that we are doing plane solar, that is also a huge capacity by segregating the aggregated feeder. So this type of thing will continue to come but our main aim is to make it more firm and slowly we take it a special power without any interruption as perfect as these are the initial comments. Thank you so much. This is really insightful and it's I'm glad to know that you know there is a whole bouquet of you know the procurement side that you are looking at to serve the different needs of the consumers and the DISCOMs. If I may and now take this opportunity to move to my second panelist. is Mahesh there. Mahesh, I can't see you. Mahesh Vipradas. Yes, I am there. Yes okay Mahes the overall background that has been provided by the presenters and by Mishra Sir. I wanted to take you back to a discussion that we had the other day and reconnect there, and I think this is something which the audience would really benefit by. You know we have been introducing the news. The new kind of as instruments of discerning path and obviously that instrument has to fit into the overall regulatory and policy framework that India. So, I wanted to know your views going forward that what do you see are the key challenges that will come when you take this theory or concept that you have RTC and you start implementing it on the ground. What do you think developers will face when they actually win the bid? I want to win for it and typically for it what do they need to look at to get more clarity. Good afternoon, everybody. What we have done in the last one year is slightly moving away from completely variable renewable project offering, which is plain vanilla to a slightly more dispatchable slightly more smooth in terms of daily generation kind of an offer to the DISCOMs which gives you rightly more comfort as a computer of power. So that's I think a direction that we have already taken in the right direction that we also need to look at how to make this work in terms of the regulatory framework that we have great which has slight bottlenecks, which will come up when we actually go and implement these projects on the ground. One of the things which immediately comes to my mind is the discourse definition or discontent expectation of RTC is basically when making RTC it has to be one megawatt all 96 time blocks in a day so there I think slightly more education of this comes when we submitted renewable RTC power that we are going to give there is slightly difference between what there should be expecting that we have no worker that is one second from a system point of view and I like your title of the ebon R which actually looks into hosting because had this RTC project which obviously require two or more technologies to be to be you, if they are relocated as a cool acquitted project there are. I think very few problems that one would face even from the regulatory side but what I cannot understand is the moment we're looking at projects which we located at different locations and chaotically, they may be in two different regions also that poses a slightly different regulatory challenge, which needs to be there, because we are not come across anything like this where the power is injected as injection points which could be in a few different regions and as everybody knows the scheduling happens at the state level still in the region so where would we fit in in these two injection points before we get the injection there is also an issue of access to the grid and the current regulation is that if you have an L away from say key you can get in long term access based on that elevator into that yellow now what would happen is obviously when we are designing a project for an RTC power. Within the definition of the RTC there will be slightly or more over sizing of individual quantum of the key welcome access at whatever multiple injection points that you have and current regulation in that case OHS problem and may require an amendment and similar the thought can be about how do you go into shade all this power and different injection points. Especially if they're going to be different regions because if we are no optimize on costs you would go to a best wind resource area and best solar resource area which may not be eminent in the same region so there are few because that would come on in terms of regulatory side which we will have to address as we as we go along but I think we are moving obviously in a very correct direction and this could be resolved as we move across and as we learn more. Thank you, Mahesh. That's insightful and I would go around. I would really like it if Mishra sir could also throw some light on the thinking that SECI has around some of the problems that you have already addressed going forward in the next round. Now moving forward, I just wanted to check if Abhishek is there. Mr. Abhishek Ranjan from BSES. Hello Ronnie, how are you thank you for having me on the panel today. You so now officially you are the third member of that very important panel that we call in this energy system which is the DISCOM. Sir at the end of the day, you are the one who has to use that power and so I wanted to start by asking you how do you see this new RTC scheme I mean considering the fact that Mishra Sir said that there is now a way of possibilities that are going to come to or for this forms to meet your different needs but how do you evaluate it. What do you see the benefits that will accrue to the DISCOMs and what are the challenges specifically you know? I know there are you know when you get into the nitty-gritty there are these 80 percent you have the 70 percent see you have when did when where does that leave you how do you interpret it and I'd like to hear your views on those. So as a part of your introductory comments. Sure am I audible. Yes. First of all thank you and Anurag and Fabian for your wonderful presentation and all the kinds of different models that you presented in terms of making our emo dispatchable you have given options like slot wise and then to your time etcetera. Yes we have moved on a long way from pure vanilla kind of product now towards making them dispatchable maybe hybrid, physical hybrids and now we may also go towards a virtual power plant model also in near future. Now having said that now that we are aware RE can be made dispatchable. It can be made firm there are multiple ways of doing it. There are multiple ways in which you can mix them, maybe solar wind, storage technology, different technologies are there in many proportions depending upon what kind of product that you desire, and this is the beauty of RE. This is the flexibility in the RE which can be used as I was speaking to you yesterday in the load following and you know aligning itself with the demand and also demand have spoken alive with the supply there is a flexibility on both the sides so with this beauty RTC product which has come in the market is a step ahead I will say and definitely I'll not go into the “nitty gritties” as of now, as you said this is the opening remark, but RTC product on the way of establishing flexibility on the way of establishing reliability and a dressings to some extent the problem of variability is a very good step and some good designs have been trying to be put in like 80% animal CUF and 70 percent monthly sewer. It has to be looked into that the demand profile of different distribution utilities would be different given this nation of multiple climatic zones so the beauty of re is it can be you know customized basis the requirement and also optimizing upon the cost so the ingredients when you mix them in a particular and also determine the past if you have any slot wise form-based what kind of power at me the costliest one second is the other extreme end is complete variable re as a must run I mean it changes as for the force of nature that is the second extreme so in between where do you want to put yourself is also a function of what kind of cost you want to pay so then comes the question of resource planning what is the optimization result what is the most important or most optimized value for you this could be different for different distribution utility I'll take a pause here more when we discuss. Thank you Abhishek. Thank you so much now keeping in view that we would like to get a more rounded you know larger view of panelists. Next panelist is Surbhi. Can you hear me? Yes, I can hear you. Yes, Surbhi, now you come in with a very interesting profile into this discussion because you're not only a sort of a banker but you're also a development banker and I know that has more roles than just looking at the IRR of projects and looking at what the DSA as are it has a lot of element angle to it so I'll let me start by asking looking at a macro picture how do you see the impact of RTC on the overall power market and how do you see the impact in terms of and also how do you see the impact on RTC of the you know of the reforms and the new initiatives that are being brought in from the power market in terms of you know the trading the opened up instantaneous trading message that's happening right now real-time trading so if you could throw light on these and the other question I had from you as a financier what and RTC project ideally which what Mahesh mentioned would have multiple assets all over the place and some of these assets might have you know in financed earlier you might have financed some of them might have been unfinished also they can be of different levels of finance. How would you look at it while sensing this wannabe what are the challenges you will face and if any and what are the what will give you the assurance? Sure, thank you so much, Ronnie. So I would like to take a first question first about how it's going to be shaping the wholesale electricity markets and specifically given that the real-time markets have now been recently launched so my understanding is that you know the standalone renewable energy is much more challenging to handle and as has been multiple times repeated in this entire webinar that renewable energy being variable in nature we really need to make sure that how we are able to ensure the delivery to the final consumer the distribution companies and etc. So from that perspective and be clubbed any kind of to RE resources together or will bring in thermal or we bring in battery or we bring in you know all of them together it's going to bring us for more power as compared to standalone renewable energy and this is going to play an important role when we are moving forward and when we are opening up the markets and I would say if I can deepening the markets to bring more re projects to allow for bidding in such markets so around-the-clock power supply depending on what definition it has in on any day will be much better than the standalone renewable energy project in terms of handling the balancing the flexibility required in the system and etc. so those challenges we are still maybe not there on you know moving to the hundred percent around the clock that it's a step towards the right direction and from the bankers perspective we all are in favor in fact we have been working with multiple utilities including SECI at much deeper level that how we can bring those synergies into the system so from that perspective I would say that this is definitely much more wanted and much more welcomed approach from the end of from SECI and the like institutions coming to the second question of yours where you talk about define anxious perspective if the assets are dis aggregated and they are located at different locations my point is that first of all I think it depends on two aspects if you are bringing all the assets being proposed for this particular tender as new assets then it's much easier of course but most of the times what we will be trying to do is say Club the existing renewable energy assets which are maybe not dispatchable due to say hi you know variability or lower cost etc. or maybe in the thermal projects which are say not generating over last many years due to not being able to be listed under the merit order dispatch so there are different financials which would have already come into the picture from my perspective and if I can say it to a bigger extent from the commercial bankers who are out there in the market what would be most important for consideration would be that how the revenue profiles from the entire project would look like uber financing could be ring-fence to the assets that we are being so we are supporting but when we are looking at that this project will ensure revenues and net inflows of cash so that the repayments could be made the entire project has to be like in a holistic manner there are multiple moving parts when a financial will look at it from that you know perspective so I will stop myself here and over to you Ronnie. Thank You Surbhi. Thank you so much, moving on. We will again go to the next panelist, Deepak. So you know I will not dwell upon the issues that we've already talked about basically I wanted to ask you a couple of questions which were there was you know we talked about the fact that that you know meeting these requirements at the RTC power will require oversizing of the assets most of the places if you are looking at an only re situation so the impact you are in the of using impact this would have on you know basically this excess power being put into the market the impact of that it just recovered as a part of your introductory responses and the other thing which I am really interested in asking you because I know or you know you've won different hats throughout their career is one of that is also to look at new technologies and new ideas is you know what form power is this environment stirs you from powerful renewables like in a biofuels or hydro. Whatever we had an opportunity for these technologies to develop on submarines. Thanks, Ronnie, so maybe I'll answer your second question first or even before that just half a minute of introduction in sense of what we believe is the way to go about it because that would inform the other two questions so this is the first and a very right effort by SECI to get into RTC kind of a construct and we have started made a very good beginning with 80% Anglesey you have construct and a 70% month lease we have construct so first we'd have to acknowledge what it will do for the discourse but it will do for the discourses bring down their challenges by a significant level so in our typical plain-vanilla wind or a plain vanilla solar construct where in the CFS are anywhere between 25 to 35 percent they are left to manage the remaining 65 to 75 percent of the time locks on their own and even because of very limited sort of re assets on the other side on the generation side the variability is also a lot more and that's what we are seeing as a cause of curtailment as a cause of problems as a cause of concern for discourse but the practical aspect of it is that actually describes simply have a lot of assets at their hand like thermal assets and hydro sets which they use efficiently as much as possible to control such vagaries of renewable energy now with that background when you say whether hydro or biomass has any role to play obviously they have a role to play now whether they have a role to play integrated with the generator at the generation end or whether discounts can actually make them play that role I mean that's something which can be totally driven by one bits are constructed and second the outlook of the sector as a whole so as any of the successful bidders of any of the psyche projects either RTC or peak power one has the option to go for hydro pump hydro one has the option to go for battery storage but again what really matters in Indian context is also the pricing of such power finally if the pricing of such power becomes so high that it is not acceptable to the distribution companies who have to serve all kind of consumers then any product whatever we may say is not worth it and I say it with a lot of commitment when I say this because it is very much possible to make a hundred percent firm schedulable re power project by and against some of the ugliest speakers spoke about colocation the benefits of colocation absolutely there are benefits of colocation absolutely there are benefits of co-locating a lot of energy storage but is Indian system one ready for it in a way to be able to pay for that kind of investments and second do we even need those kind of investments when actually we have a lot of excess assets sitting elsewhere in the system so we have to really answer some of those questions first before we really deviate a lot from what we have already found a success in as the current RTC construct now coming back to your first question what will be the role or how will access power play its role so factor means currently Indian markets are not very deep they are relatively shallow but again we have a very firm view and with the introduction of real-time markets just about 15 days lack it's very difficult to really pinpoint whether it is successful or it is not I believe we are moving in the right direction opening up multiple kind of frameworks to be able to trade in market to be able to deal in market and then at the same time there is a talk of ancillary service market there is a discussion on green energy products coming up in market with all the exchanges in India supportive of that kind of interventions so I do believe whatever Axis powers in whatever access power gets generated there will be ample opportunities to be able to sell that power into the marketplace pricing obviously but matter as in any market place and yes generators have to take that risk when they are bidding for these projects I'll take a pause. Thank You Deepak. Spoken at a very comprehensive reply as and I must say that I learned now what you do is we'll go to look at some international experience and to finish the round I talk to Fabian and then we will do some random questions across the system. Fabian, you see in the markets all over the world and what I wanted to do was put you in a tight spot, a difficult spot, which is to ask you what do you see are the best practices across the world and what do you see are comparing them to what they're doing in India right now, the areas that we could adopt some of those best practices from across the world now keeping in mind the fact that missions already said that we are now looking at that RTC is not the single one who the product that's good answer all the needs of the consumers are the DISCOMs but you know where do you see RTC going from here? Are there places where they can be improved and what we can learn from international experience? Hey yeah, so thank you so much for the wonderful statements by the different participants thanks for putting me to the tight spot because yes I agree we have to be careful that we acknowledge that different countries have different objectives when introducing a system for any procurement right some countries have strongly increasing demand or shifting demand patterns pointed towards even in Peaks maybe and other countries already have a lot of power and so for countries where they have like a strong increase in demand for them it is particularly important to basically improve this demand supply gap right while in other countries which already have excess power maybe the intermittency of the power is more issue than we have different kinds of different situations in terms of flower power some flexibility right so India has the advantage of being a very large country which is already you helping to some geographical smoothing already and other countries in Europe for example which are well integrated with the neighbors they can basically use this larger system to better integrate things in the power system countries that are smaller or rather insulated are facing much more challenges of course then is also question how much renewables do we have in the system I do have rather small chairs or do we have it like in India increasingly very high shares and all these different like these different situations basically kind of require different approaches and what I liked about the coming off of Deepak right now was basically to make sure what is how much I were willing to pay for it and what is the best solution for our country for our system and that is both in terms of reliable supply but also cost efficient supply let me make it with examples so I think we can see that that in I think there's well the discussion right now on 100% renewables I think which is a which is very good and I think the around-the-clock tenders ass-kisser renewables we should not forget the demand side so for example an interesting thing we see in in in in the state of New York and what con Edison does there your American utility is that the basically have to decide we do we want to do we need to expand the distribution grid what they did in the end they basically had a procurement where they didn't just put your generation power but they also procured demand side services and storage solutions and therefore suddenly they basically had a solution where the need for distribution grid extension actually was falling so I think something similar is here also the case and if you if you basically have to decide is there if there's a particular time block that you know to provide generation will be very expensive you can also look at opportunities to maybe even ensure that you have demand-side management service doing this time and therefore needs reduce the need and to fill that demand again so there are definite different experiences and something I also want to mention is kind of the flexibility and I think that is an issue office that that so already alluded to when she said basically what do we do when we basically are now merging and now are now an aggregate old and new assets together what our challenges with the financing side I think this can also be in a way advantageous right so we see that for example we have several projects which maybe the PPA is not it's not valid anymore they're looking for new object opportunities I think basically the more after materials we have for these actors be it through aggregators that can operate this power be it through commercial PPAs be through the wholesale market that is liquid enough that is really increasing all of this increasing flexibility and I think the more we have options for different types of renewables and other special technologies to have different types of off take us the more we actually increasing the overall exhibition system and the more enabling PPAs that are shorter or PPAs that are following eventually more a real time demand right and I think that's something that we can move to a limit on basically right thank you thank you favorite that's a very interesting take on what's happening around the world. Can I just quickly, before I go back to Misha sir, I'd like to go back to Abhishek. I wish I had a question because that that Fabian got me thinking about this and I know that you have been a champion of promoting renewables and you know quite a few of these renewables around decentralization equals do you see as a distribution company to bring in more you know firmness into the into the pattern the distribution company acting as some sort of an advocate of not only you know the renewables that are coming in from outside like for example in the RTC tender but also trying to be an RTC system provider in the way because you've already started doing storage at the distribution level you have solar rooftop you have an understanding of how your demand patterns are changing unless you know how much of plain-vanilla are you're getting over there so do you see a business model involved possible business model involving in the future where instead of getting just you know RTC path being done by it maybe the utility can be a quasi RTC aggregator like the case an example being of Germany which they've been talking about now. Thank You Ronnie. I think German example being quoted is of more of a virtual power plant where in the role of and the flexibility inside the distribution arena wherein you have multiple generators embedded generators as well as the demand which can be flexed they coexist and this can be obviously tabbed in through implementation of solution akin to like for example dumb solution disputed energy response planning system or the infinity having said that yes the distribution company for its own territory the obligation given to this under the federal act for supply of economic and reliable power supply dispatch for that it can tap into the flexibility of the distribution side and blend this with the help of multiple options like example I one of my favorite example is community storage you're talking about referring to for example distribution transformer level storages and now we are already today in the morning we had a some meeting tele meeting in seminar we talked about how we can have some solar plus storage systems portable ones we are trying to work with somebody for under a MNRE scheme and also use this with our consumer side and that will be subjected to demand response or they'll be visible even if they are behind the meter they'll be visible to that so they act as a component of a virtual power plant in the distribution. Yes, so the aggregator role can be played by the utility either on its own or through environment as we are doing in case of solar for example we are doing also playing the role of demand aggregator in the rooftop solar as you know and we are doing this as of now on our own we can also do this in terms of aggregating the demand side flexibility aggregator or we can load some tender or impanel them and ask them to give us some demand in terms of flexibility so much flexibility is required whether it is RTC flexibility or a strong or by flexibility that can be done and that we are looking forward to but the very important challenge over there is to predict demand. Net demand means the demand from the grid that is total demand minus embedded generation so that is where is the important challenge and we are working on the same. Third is balancing the grid or a long-term re supply or the medium term RE supply from outside the territory balancing that with the I said that you have inside your grid. Now that is also possible that is also we are looking into there is another project we are finally doing with also that is also possible so the way of stabilizing the RE could be at multiple nodes in the entire value change starting from the generation we are talking about where the RTC tenders and peak power tenders and now many other versions would come out second days we are putting it on the transmission substation recently for example as we you might be aware flew and submitted certain bits in Australia very recently a week back replacing the transmission aside for example. Third is distribution side where in the support and balancing can be provided within embedded and the distribution MV medium voltage network medium voltage Network so yes the distribution utilities will be very eager to play the role of demand flexibility aggregator as we are also doing the playing the role for aggregating embedded generation demand or regeneration resources in the supply moving towards a virtual power plant scenario which is the German. Over to you, Ronnie. Thank You, Abhishek. Mishra sir if I can request you to kindly switch on your mic sir. First of all I have been meaning to ask you since I heard Mahesh I thought to be better to go around all the panelists Mahesh pointed to a number of challenges that are going to be there and I know that you have a very long history of working at VGC I also am saying you're the best person to answer this so first of all you know you see those challenges which Mahesh has pointed out how you addressing those challenges the second question I had for you sir is that do you think that with RTC coming in it might actually also bring in a certain amount of a second wave for the thermal assets underutilized in the market. Your views on those, sir. This all has been addressed. I don’t find any issue. That is not getting a team that when they are putting their additional plants and they are paying that will also mitigate it in that respect and future the batteries will also come there very good chance to replace this type of plant ultimately what matters of the rate finally you are giving to the point is that we ultimately what is the end price for the new thermal plant. we sent $10 of you have seen the recent discovery of the rate for the thermal plants and neutral plants because you have to see that part also new and stress part there is the difference on that so that is a very high the four point seven nine is approximately can manage that with the level power requirement as it has happened in the Chile what the Fabian has presented. The tender was for all the technologies. it undergoes for the all the technology it is not like that it was further developed it but all the renewal is one this is ultimately when numbers will matter in the future and we should not look in this direction we should go for the RTC only we should go because it has to go as per the DISCOMs requirement this if DISCOMs says I need the power from power and six of us and very well so you have to design a tender like that this DISCOM says I need 12-hour powers only and more power tonight to you to design power like that that all is possible and the next and Roosevelt end of that will come in in that direction and more or less near to Chile model. This is our journey towards ultimately firming up the power and with renewal that renewal is the policy of the government for 50 GW what we have to do this will keep the great chance to really want to integrate with a lot of capacity that is why it is that is the way we will we will plan to do any regulation challenges any technological any challenges that needs to be solved that we will solve it there is no issue and all the concerned authorities are supporting like anything both CERC, POSOCO, CTU, CA they all are supporting the I do not find any no worry on these assets. Thank you, sir. I think that that would come as a great you know relief to everyone who intends to bid for these. Deepak, I know, has been raising his hand for some time. Deepak, over to you. Thanks Ronnie. You know I just raised it once and kept it raised. All laughs. So you know I just wanted to add a couple more points because I know and thank you Mishra ji for clarifying that actually we don't see any regulatory risk as such, when SECI is totally designed for product and consultation so at least we being the winners don't see such regulation. Regulation obviously would have to be created and factor means most of the regulations that we have in the country are still aligned to the old way of doing things and CERC has made a lot of progress not to say that they have not but a lot of further progress needs to be made as we have seen by introduction of RTM and stuff like that they are already moving in that direction. but just two more specific points I want you to make on this RTC. One thing is ah I think we need to think about these questions and if this this forum can help which I'm sure they you are already working with Mishra Ji and SECI team but number one question is where is it that storage particularly the large amount of storage we best place that is it better to tie it to a specific project and therefore then extract its value in contractual terms which my personal belief and again this is not a new belief my personal belief it is it could be a bit limiting in the long term if we tie up large quantum of storage in our particular contract and that's what we are seeing actually happening even in our thermal projects here and we have long-term tie ups only and very limited supply available in open market but storage being tied up actually would have even further impact because that otherwise could be a very flexible and very good resource for distribution companies across the country if you rather do it as a separate either as a services construct. Second is also a very detailed assessment at a country level when we exactly need large quantities of storage. Do we need it two years down the line or do we actually need it five years down the line and again a Mishra ji and his team is fully aware of looking at whatever data we have but also to this other group like the audience who is there and the other participants who are there I think these are the questions unless answered we should we would not want to get into a situation where we tie up DISCOMs by virtue of products projects into a long-term high-cost solution which they may not be very happy with three years or four years down the line when storage costs actually become sort of a terrible estimates have seen probably half of what they currently are. So to that extent SECI has been obviously very I mean on the on the front foot and have been understanding all these things designing all the tenders that they're doing but also to the to the USAID team who has been very graciously helping India if some of these aspects you are already considering then it would be good for us as stakeholders of the sector to know what our you are well evaluations coming up to and what are the results and what are your sort of recommendations as an independent entity. Thank you. Thank you. I am glad to hear that you have some expectations and we hope to address some of those in the near future but that brings me to another question which I have is for Surbhi. I know and that's because I know a little bit about your work, you walked on this conceptualizing this hybrid project in Andhra Pradesh where there was storage so I just wanted to know what they did to evaluate the impact of storage as we are talking about at different levels and can you share some more insights on that if you have. That will help the audience understand the maximum. Sure so the background is that you know when we got engaged with the SECI on promoting the new nascent technologies one of the foremost ideas that we had in our mind as house to bring together we used to knowledge ease and there the story began of combining solar and wind and not that we invented it, it was under the discussions by capillarity so we just didn't help that form up three more in terms of you know so that it's investment ready and then what we tried to do was to bring battery storage solutions to it as well so what was the role of the battery storage was being evaluated at that time at very many levels and we know all of us know who are working in the battery storage solution sector that the value stacking of batteries is still lacking in the country not only in the country but in most of the other parts of the world as well .so what are they because SECI is not a commercial entity we have to take their aspects their objectives also into the consideration so the couple of value starting services that we could immediately make outer from the battery storage solution was that maybe to avoid ESM penalties maybe to avoid curtailment and these were the two or three value services which were immediately you know visible not that the others are not but they are still not monetized so that's why we concentrated our battery storage solution to very small sizes but it was like a step in the right direction and I'm sure that this also contributed to the future tenders that have been coming up through SECI and the various policies that are being coming up through MNRE. Because battery storage solution at that point in time proved that it could be combined with solar wind etc. and can provide some value services to the market and can you know start the journey towards dispatchable renewable energy power. Now going forward also there are a couple of projects that we are working along with SECI on and there are certain battery storage solutions we are planning to deploy along with them but nonetheless I would like to just one more point on the table that we are also working with NITI Ayog in which we are looking at the entire gamut of the sector we are working with power grid and CEA and the SoCo on the study of the battery storage requirements at the ISDS level then you are also working with a couple of states including Gujarat, Madhya Pradesh where we are the value stacking services. First of all we are trying to identify impact storage solutions are required or even I would say the energy solutions are required if batteries could be one of the proposals if that is the way to go ahead then what are the hotspots values could be deployed in what will be the value stacking for those particular deployment of services. So country is moving very fast NITI Ayog and MFP MMN all of them are very much keen to take it forward see you shortly see you know more developments happening on the other side the wholesale electricity markets are also being deepened there a lot of things that are happening we are again supporting MOP on that so there is a lot of buzz going around so Deepak I can assure you that sooner or later you'll find more feelers from the market you'll find more clarity from the ministries and the policy and regulatory bodies in the country to take this forward. Thank you Surbhi. That's really insightful because what you're saying is that that let's not look at RTC in the renewable storage or maybe there is the markets are going to ruin it you know basically how various value propositions of different technologies upon layout is going to change with time, how the policies are going to evolve, how the regulators are going to look at it and then how the commercial entities are going to start working on it. Thank you. That's really insightful. Before I go to Fabian for the last question around, maybe that we take a couple of participant questions. I'll go to Mahesh. Mahesh, as a putting your hat on as a developer are you there? That you are a very imaginative developer do you see markets beyond just the DISCOM that for a concept like RTC or system friendly procurement? Do you see it doesn't give more options to large consumers to become more independent as far as the energy supply is? Definitely, there is a requirement especially of large consumers with a dispatchable power. I won't say steady for dispatchable power definitely it would help those consumers if we keep on developing these products and especially there are large consumers who require power almost around the clock and if renewable energy combined with either storage or over sizing or combining it with conventional generation can provide that at a cost which is possibly due to competitive. I see a big market opening up for renewable energy power, if you're going to solve these smaller issues. Thank you, Mahesh. Fabian, last question to you and my round of questions because I think we will have to start winding up soon one of the things was that the most mentioned by couple of panelists and I think I know that you know the demand curves are not going to be what they are today we are procuring for 25 years just because we have a life cycle of certain technologies as many five years but as the markets are emerging evolving, do you think that is a role for a short of UPS and then impact and then what would be the impact on the commercials that are going to be there the second part of it is have you seen any cases where instead of moving for a very long term PPA with a very you know like we talked about the Chile example where they were given the demand curve do you see a little more flexibility in the system somewhere else and what has been the amp you know the amplitude of the pricing there in terms of you know maybe higher prices because you're building in more flexibility to the contractual aspects. Yeah thanks so much um I think it is a very difficult balance beam to strike right in the one hand we want to project if develop us some kind of revenue certainty because we know that with prices coming down actually the share of financing costs as project cost us the simply getting began bigger right so I think financing costs and the bank ability of offtake contracts is as some partners never before um on the other hand we it has certain risk that if you look at now look in basically with twenty-year Power Purchase Agreements certain duration patterns that we might not want and ten years from now we have difficulty as well right so I think that's a really difficult balance to strike between somehow giving the developers some revenue certainty and at the other hand making sure that bidders have the buyers have more flexibility in terms of making sure that that generation is following them and. I think I mean yeah I think you mentioned Chile for example which is kind of trying to provide this this long-term revenue certainty by actually fixing these glide locks for a long time fear of time I think electro doves are by also if you have rather well-functioning a herd of markets right so for example if you have a wholesome arc which is rather well-functioning then we see a case for example up in Denmark where we're developers saying we actually don't need any anymore with the government or with private who uses that they only sell at the merchants market I think there was a strong trend particularly in Europe we saw that the people expected that how its market prices would increase and therefore suddenly wholesale markets became much more attractive the long term PPAs because often the revenues you could actually get at long term housing markets were higher than the revenues would get it at PPAs that trend has been reversed a bit now through the COVID 19 situation right I mean with economic lockdowns with the fear of economic recessions how it's a market prices also in countries where they were rather well developed they sometimes dropped by 25% 30% and I think that's of course for bidders that are going after consumer projects is rather challenging so actually something interim something while you basically have bit shorter PPAs can be attractive but they can only be attractive if the developers know that after a certain amount of years when the PPA is over they will still be able to sell the power and something that actually I found very interesting and in India which seems to be a to applied sometimes is that some developers are now already ensuring that a certain share of the power is being delivered to ummm through PPA to the DISCOM on a long term offtake contract – giving them some revenue certainty and another share of the generation is basically sold really at the wholesale market which currently is at least half a year ago was quite attractive so we might also be seen situations where developers are trying to get a certain revenue certainty by selling some of the power on rather long term offtake contracts and other parts of the power reacting more on short term requirements and I think that's something we can basically see that could be retroactive to we have somehow have a system where we have basically more flexibility through more of take opportunities for developers the other hand we still be able to provide them the certain revenue certainty while you're taking off part of the power on long term price in. Over to you. Thank you, Fabian. Now I will just take a couple of questions from the audience if that's okay and one of the questions I have from a very old and respected renewable energy storage well I think this is this is for Mr. Mishra and Abhishek the question is could you clarify if the RTC tenders are leading to deployment of dispatchable RE what is the preference of DISCOMs between firm peaking bartenders versus RTC tenders given that many DISCOMs already have long term contracts signed for meeting their base demand curve and what is what are they going to do with the surplus path availability or any of the opinions this. RTC tender has been designed to the pretty month for the day right any talks at the signing up then this this thing I know it's from the developer to manage this issue of you know the sizing of the project but there are chances that to meet the requirements of the of the contract they would be over sizing their plan says there is going to be especially in peak period to the peak solar periods like you know during the summers somewhere around moved there's going to be excess power available and that power of course be the first thing is for a project point of view is going to get into the oil to the trading market but then as this size of these tenders in increases or other solar comes in do you see a huge black coming in to the market especially when you're looking at it from the time value of solar and are there any thoughts on how what these implications will be just your thoughts I mean I know you those are not something that you can deliberate much on but your initial thoughts. About this basically extra power whatever they are going to generate because of the while bidding during the bidding they must have overrated all these things. Abhishek, any thoughts on will go specifically to the question that was there in terms of the difference or the preference for RTC versus you know specific peaking power that you know. Ronnie there could be optimal mix of both the things it's not a question at all so today I will tell you what is happening the problem with us is the way like Delhi for example if you take Delhi as an example there if you take the variability in the lower it is very high on a daily on a seasonal time. The banking was an option to optimize that but then often it what we have seen is banking slot wise is not available it is only RTC so today also if you imagine today we are sitting in June we due to the weather vagaries we are both selling as well as purchasing in the exchange on daily basis I mean dam and this is due to the peculiar nature that the minimum technical limit of the conventional coal base resources and the optimal mix as per my portfolio the PPA has to be half sign is forcing you to do that now with the upcoming tenders like RTC and the peaking power both kinds of flavors are available from SECI’s portfolio we can have a suitable mix which optimizes on a the surplus during the off-peak periods where I am today forced to sell on the exchange at a rate which is lower than many a times which is lower than the rate of procurement. RTC in two terms we will see as Mr. Asser also said I mean as per the requirement the RTC also what kind of see you because the renewable power now we is no longer ginseng when we are talking about the firmness and the variability has to be catered to when you talk about that aspect we are also looking at renewable power as a power resource not only as our power resource purchase obligation so only COF will not solve the issue so COF is I know in the back end it is tied up with the firm kilowatt a megawatt capacity aspect so yes to answer your query a suitable mix of portfolio both the RTC flavor as well as peaking power flavor will be suitable for the city like Delhi the ratio could vary from state to state depending upon the demand curve be a very important fact which has come up too and we are also facing the challenge what people are saying or even the regulator might be saying I'm not sure to need your power and RPO obligation local purchase obligation there are two ways a you have this dispatchable renewable energy power source, B why don't you go for a conventional coal based source plus RE so which is more competitive in terms of price because both ways you are going to get some kind of firmness so that is another aspect we have to see when we are designing such kind of contracts especially now that there is some regulation from CERC they have said that one rupee per unit is the ceiling tariff for re c known solar and solar both so that is also another round of opportunity as a challenge that we have to see so I am in favor like for example if we have a dispatchable RE and that price competitive not feeling that so anything which is over and above conventional non clean sources even if the non-clean sources are cheaper is better but now that one step is already achieved that grid parity of the pure vanilla RE is there the next challenge is to make that dispatchable RE or two grid parity so grid parity put the one of the definition could be at what rate these conventional power is available plus RE. I'll pause here. Right sir, thank you Abhishek. Thank You Mishra Sir. Thank you for those insights and I think I can I can just to sum up I think I think we have very out of time we exceeded not only the time limit set for our panel discussion but I think the time limit set for the webinar I think we are now in peeping into other people's time for meetings so I think we wrap up this panel discussion I'd like to say only one thing that you know when we came into this webinar and we started designing it we thought that they would be an X number of issues but let me tell you having talked to you there are maybe X plus y number of issues and a lot more possibilities and opportunities as well so I think this is going to be a fascinating topic of discussion going forward in the next one or two years. I would like to thank SECI for bringing this wonderful concept up there. I would like to thank the developers renewable actually providing their insights, those were really very quality based insights and already like. Thanks to Surbhi and Fabian. You know coming in from a lender's perspective and the researchers perspective and giving us you know how to take it forward and of course bringing in the you know the perpetual player in the games part of you which is the DISCOM. So with this I would like to thank all the panelists and you know basically let them know that I think they have done a very good job of actually clarifying a lot of these issues that a number of people would have in terms of how this market develops into seeds. On that note I will hand over the rest of the moderation of this session to Yogeeta. Yogeeta take it forward. Thank you very much. Thank you all for the great discussion we all had here on this platform. With this now we come to the end of this webinar and I would like to invite Dr. Rakesh Goyal, who is the team leader, PACE-D program and the Vice President, Tetra Tech, India office, to give his concluding remarks. Thank you. Good afternoon everybody. Concluding Remarks, there are three goals to be played thanking everybody summing the discussion and telling about what is coming next which I will do very briefly within the time limits so first of a start of the day. We are very thankful to the USAID. Mr. Satin and Mr. Anurag Mishra for guiding us and encouraging us to conduct this webinar on this very upcoming and important topic. We are thankful to esteemed panelists who have taken out time from their busy schedule and contributed in this term there with their thought leadership and mass sector experiences and as already pointed out we have more issues to deal with, not just, but we thought of. We are thankful to the participants who participated in large number 130 who joined this webinar shared their questions, which will help us in terms of deciding the next course of action and all those questions which we could not answer because of the paucity of time, let me assure them, that we will take that and one-to-one basis will respond to that essence. Regarding the summary of this webinar, many things what is RTC, why RTC, what our global experience, why it is relevant for India and if you like to sum up all the learnings of a webinar, I like to say the RE procurement design can help in reducing the system integration faster. This should make use of it by choosing the model that best suited to that we discussed in the webinar, several models, but there can be also many other models with this comes may like to develop based on their own requirement. It is a low-hanging fruit, you said not only in India, but in several other countries also supporting our RE-procurement actions and to share all the learnings. A compendium is developed, which will be called toolkit, which is going to be released next month. The details are provided on the slide which has been presented here. So look out for those platforms which are mentioned on the PACE-D website and where that will be available for that. Thank you once again and goodbye. Thank you all we'll be sharing the recording of this webinar on our website as well as on the social media handles. All the presentations will be available on our website by late evening today. We will be uploading everything on these digital platforms. Thank you everyone.

Last updated: September 22, 2022

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