Curtailment of solar and wind projects
India has made tremendous strides in renewable energy (RE) deployment in recent years. However, one of the major challenges facing the sector is curtailment of wind and solar projects. Curtailment refers to the situation when the electricity generated by a renewable energy project is not used due to grid congestion or system constraints, resulting in revenue losses to the developers.
The penetration of RE in India is geographically concentrated, with the top six states – Karnataka, Andhra Pradesh, Tamil Nadu, Maharashtra, Gujarat, and Rajasthan – accounting for nearly 80% of the intermittent renewable capacity installed nationally. Among these states, Andhra Pradesh faces significant system integration and RE curtailment challenges.
During summer and monsoon, the number of curtailment events rise significantly from that in the rest of the year due to high RE generation. Although RE generators have a must-run status in India, which means curtailment may not be permitted due to commercial reasons, many plants are curtailed due to system constraints such as insufficient flexibility of generators within the state.
This highlights the need for a large balancing area and promoting inter-regional transfer of surplus generation from these states to facilitate RE integration required for India to meet its Nationally Determined Contributions (NDC) targets. The NDC is a pledge made by India as part of the Paris Agreement to reduce greenhouse gas emissions and promote sustainable development.
Apart from the revenue losses to the developers, curtailment also results in increased costs for the grid operators and the consumers. It leads to inefficient use of resources, creates uncertainty for investors, and hinders the growth of the RE sector.
To address this issue, the government of India has taken several steps such as setting up a Green Energy Corridor to evacuate RE power, strengthening the grid infrastructure, promoting inter-state transmission, and introducing market-based mechanisms such as the Renewable Energy Certificate (REC) mechanism to incentivize RE deployment.
In conclusion, curtailment of wind and solar projects is a significant challenge facing the Indian electricity market, particularly in RE-rich states such as Andhra Pradesh. To ensure sustainable growth of the RE sector and meet the country’s NDC targets, it is imperative to promote inter-regional transfer of surplus generation, strengthen the grid infrastructure, and introduce market-based mechanisms to incentivize RE deployment.