India: System-Friendly Renewable Energy Procurement

Speeches Shim

India explores procurement design solutions that help minimize both generation and system integration costs. Solutions include time-based incentives and penalties, aggregators or virtual hybrids, physical hybrids, and locational signals.

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 October 31, 2019, USAID’s Partnership to Accelerate Clean Energy Deployment 2.0 Renewable Energy (PACE-D 2.0 RE) program held a workshop with the Solar Energy Corporation of India (SECI) and other energy stakeholders to discuss options for system-friendly competitive renewable energy procurement in India. This workshop served as the basis for a white paper, “System-Friendly Competitive Renewable Energy Procurement in India” (PDF 1MB).

The presentation covered the following topics:

  • How to procure resources that meet your power demand;  
  • Why you should consider the system costs and benefits of renewable energy in the award decision;
  • How to minimize both generation and system integration costs; ​
  • Procurement design solutions such as time-based incentives and penalties, aggregators or virtual hybrids, physical hybrids, and locational signals; and   
  • Global best practices on competitive procurement that are applicable to India.

After the successful bid of its 1.2 GW time-block tender in January 2020, SECI launched in March 2020 a bid of 5GW of round-the-clock power, marking a big transition toward system-friendly procurements of renewable energy in India that lower generation and integration costs. The SECI tenders incorporated several learnings and global best practices from USAID, such as:

  • Requiring time-based incentives to help match RE generation with the demand curve
  • Considering renewable energy grid integration costs in the award decision which vary with location
  • Making the tender technology agnostic which allowed developers the option of using a portfolio of technologies that delivered energy at the least cost
  • Prescribing strict Capacity Utilisation Factor limits which ensured a minimum quantum of power was available for off takers like the distribution companies. 
  • Allowing the use of energy storage or any RE generation available during peak hours to make RE more dispatchable.

According to SECI Director of Power Systems S.K. Mishra, USAID’s presentation on system-friendly renewable energy procurements informed both round-the-clock power tenders.

Happy woman relaxing with wind generators turbines beautiful sunset background.
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.
© Viktor Pravdica / Adobe Stock

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.

Date 
Thursday, October 31, 2019 - 12:45am

Last updated: June 15, 2022