Curtailment of renewables….The problem and solutions ahead..

What is curtailment?

Curtailment is a deliberate action under which the offtaker denies to accept the oversupply of solar or wind power due to technical reasons of imbalance in the supply and demand of power in the grid. In the recent years, curtailment has been observed as a major risks governing the setting up of renewable power plants, even though, the Government of India has issued ‘Must run’ status to the renewable energy power plants except for the biomass power plants under the Central Electricity Regulatory Commission (Indian Electricity Grid Code) Regulations 2010 (Grid Code). This status is to ensure that the power from the solar or wind power projects cannot be curtailed for reasons other than that of safety of grid, equipment, or personnel and encourage the setting up of renewable energy power plant. The Ministry of New and Renewable Energy (MNRE) under the Government of India reiterated this in 2019 by issuing a letter and stated that any generation loss because of this curtailment shall be awarded compensations for the same.

Why is curtailment happening?

Even after the ‘Must run’ status provided to all the renewable power plants, these projects are still facing the issue of curtailment curtailment of power frequently in recent years. Some of the states like Tamil Nadu have gone to the extent that the ‘Must run’ status of renewables has been unfettered by the regulatory commission.

The backing down of the solar power plants can be attributed to the technical as well as commercial reasons. While the former has been highlighted as a major factor for curtailment of power from the power plants by the offtaker, the lines between the curtailment because of commercial reasons and technical reasons is highly blurred.

the renewables are variable in nature the power output from a large solar installation varies frequently with over shadow of a large cloud. During low demand periods the grid frequency overshoot’s beyond 50.05 Hz and in such a situation as load dispatch centres are curtailing the solar power injection in the grade on account of technical reason even though the solar power plants have got must run status. Though as load dispatch centers highlight curtailment of solar power plant due to technical reasons however the data needed to verify the technical reasons are not available to the developers and this leads to a conflict between the developers and Discoms

Typically the power purchased from the solar plants installed earlier is at a higher price as compared to the power purchased from the thermal power plants and in cases where the demand is low, the state Discoms are should curtail the thermal power generation first. However, citing various technical reasons the solar power plant is backed down, denting the revenue of the solar power developers. The PPA signed by the Solar Developer with the power of takers such as SECI or state Discoms does not compensate them for the loss of revenue due to curtailment.

The developer site curtailment is mostly of due to commercial reasons as we all know that the tariff accorded to solar power plant during last 10 years is much higher than the tariff accorded to thermal power plants which makes the cost of power procurement higher to discom and the underlying reason cited by the developers is more of commercial in nature we are in Discoms are reluctant to purchase solar power which is costlier and offer curtailment citing technical reasons.

Most of the solar power plants which signed PPA during the last decade with the offtakers like SECI or Discoms do not have the provision for compensation for curtailment which leads to the power developers being caught in a messy situation. 

What is the status?

This leads to the offtakers and developers fighting various legal battles against each other for various projects. Among the many case examples is the example of Tamil Nadu SLDC and the National Solar Energy Federation of India (NSEFI). NSEFI had filed a petition with the Tamil Nadu Electricity Regulatory commission (TNERC) against the SLDC. NSEFI in its report included the data acquired from 10 solar power plants and showed that during the first half of 2017, plants faced up to 100 per cent of generation curtailment on several days during a given month.

The data proved that these curtailments were not due to technical reasons because during the considered time period, the grid frequency crossed the limit of 50.10 Hertz (Hz) only 1 per cent of the time. Further, there is clear evidence of commercial motives as solar plants with a higher tariff of Rs 7 per unit, were curtailed more than newer plants with a lower tariff of Rs 5 per unit.

While the SLDC with no transparent records and clear evidence to indicate the threat to grid stability appeared to be in the line of fire as the TNERC to discourage curtailment, in its recent order, asked the SLDC to prepare a quarterly report of curtailed renewable generation with clearly documented reasons for each back down order. It further stated that ‘any whimsical backing down instruction would attract penal action under Section 142 of the Electricity Act on concerned officials’.

What are the Solutions?

In order to address the technical aspects of the curtailment CERC has issued for casting and deviation settlement regulations for solar and wind power projects which are yet to be adopted in most of the states. Once these regulations are operational, the technical reasons cited by a SLDC will have transparent records to cross-check the claim.

Another solution for this problem of curtailment is that in some of the upcoming tenders the curtailment issue is being and addressed and there are provisions to compensate the developers in case of technical issues of the group grade back down. For example in the Rewa solar project the issue of curtailment has been addressed in PPA by SECI.

Some of the upcoming tenders have also taken into consideration of the technical aspects of grid and stability and curtailment. SECI has now come up with the idea of round the clock renewables in which solar, wind and other thermal power are banded together to provide stable power in which at least 51 Percent of shares should be of renewables. This would enable more stable supply through a blended mix of renewables, thermal power and energy storage.

As the renewable penetration in the grid will increase and they become as a major sources of grid power supply, the “Must Run” status has to get vanish for renewables. Curtailment will become the reality to every solar or wind developer and they need to realize that the grid infrastructure can not be made to accommodate to absorb 100% of the power they produce. The reality is that here onwards according MUST RUN status to renewables will not be economical. Rather than a considering curtailment as a problem, it should be seen as a solution for grid balancing. The system operator should be able to control the spin of wind turbines and manage the grid. The large scale deployment of renewables in Indian electricity grid shall be only possible if we allow a reasonable curtailment of solar and wind power to manage the grid stability.