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Inter-state transmission system (ISTS) consumers face some challenges upon buying energy generated from large renewable farms, whether solar, wind, or solar–wind hybrid.

  • Although renewables enjoy waiver of ISTS, transmission system cost for renewables is very high due to low plant load factors (PLFs).
  • RE generation suffers from variability, intermittency, and inability to supply 24×7 power; hence grid/thermal power plants are needed on standby. These plants pay fixed cost/kWh for transmission which can be optimized. Further the technologies would benefit from better scheduling ability and maintaining more uniform supply.


So far, most renewable energy generators did not have to worry about transmission costs or the cost of scheduling.

  • Wind or early solar projects, selling power under feed-in tariff (FIT) to distribution companies (DISCOMs), need only to connect to the grid. Additional transmission costs are not charged from either the generators or the consumers.
  • Open-access consumers buying power using the state grid pay transmission and wheeling charges in INR/ kWh and may see direct benefit of transmission capacity optimization.
  • Most states offer banking facility, and the banked power can be used up to a year. Generator does not need to optimize generation schedule to match demand with supply.

Inter-state transmission of renewable energy was exempted from charges based on a gazetted notification dated 28 January 2016 till recently. As per a revision on 30 September 2016, this benefit was limited to only DISCOMs buying renewable power using inter-state transmission system (ISTS). For wind, this relief is available till March 31, 2019. For solar, it expired in June 2017.

In the future, such waivers and support to renewables are likely to be progressively withdrawn and renewable energy capacities will have to compete with thermal power plants for power evacuation services without multi-layered supports.


Transmission costs for grids are charged in terms of INR/MW/m. Due to low plant load factors (PLFs) or MWh/MW transmitted, the transmission costs for renewable energy increase in terms of Rs /kWh.

The transmission costs for ISTS are profiled in Table 1. As can be seen, transmission charges are high per unit of solar or wind energy

  • Compared to generation costs, which touched ~ Rs 2.45/kWh for solar or wind projects in 2017, transmission would add significant costs of ~ Rs 0.73–2.66/kWh (30%–100%).
  • Generating higher MWh/MW lowers the transmission cost. Due to lower PLFs, standard solar installations at 1,600 MWh/MW would have the highest cost, and wind–solar hybrids at 3,100 MWh/MW would have the lowest cost.
  • Since thermal power plants are able to evacuate 6,500–7,800 MWh/MW, thermal units have an advantage with respect to transmission costs in the range of 0.3–0.6/kWh (~10%–15% of generation costs).


This section analyses various strategies that yield desired improvements in MWh/ MW and/or accuracy of schedules.

Choice of Technology

Choice of technology can improve the MWh/MW factor. For example, Solar plants with high DC:AC ratio, higher performance ratio, or plants with trackers (single-axis tracker having proved viability) can yield higher MWh/MW. To demonstrate this, we evaluated the annual energy production of a 5 MW solar plant in Jaisalmer, Rajasthan. With DC:AC ratio of 1.3, the plant can generate 2.03 GWh/ MW/annum. With tracker, the plant can generate 2.26 GWh/MW/annum. Clearly compared to 1.6 GWh/MW/annum generation from a solar plant with 1:1 DC:AC ratio, these figures are far superior and will result in 41% improvement in transmission cost. Similarly, wind–solar hybrid plants located in high wind zones can deliver more than 3.1 GWh/MW of capacity and would further optimize transmission cost per unit.

Procuring ‘capacity-capped’ part from renewable energy generation curve

Another strategy for reducing transmission costs would be to lower transmission capacity and procure only the ‘capacity-capped generation’.

One can see from Figure 1 that MWh/ MW will improve with lower capacity caps, because the use of the transmission capacity or the procurement area covered under the flat-top/cap (depth of the curve) versus transmission capacity (Total area under transmission capacity) increases as we move from higher transmission capacity to lower transmission capacity.

Our assessments indicate that decreasing transmission capacity can improve transmission efficiency without significant loss of generation. The transmission efficiency for a wind solar hybrid plant is better than solar projects and will improve even more when transmission capacity is limited. Our results (Table 2) indicate that solar– wind hybrids generate at much better transmission efficiency (1.5–1.9 times), compared to a solar plants. For one such site we assessed that with rated hybrid capacity being 73% of nominal capacity of solar the overall loss of generation is only 0.3%. Thus, transmission capacity optimization is a good strategy for reducing overall costs until costs of additional transmission capacity is lower than the cost of surplus energy (energy not supplied to grid due to lower transmission capacity).


In order to complete this assessment, we estimated that if a buyer procures only the energy supplied under the transmission cap, what percentage of generated power is left un-procured and how this surplus energy can be used.

The relative performance of various technologies under capped procurement is outlined in Table 3. This assessment indicates that wind–solar hybrids are better at delivering higher energy to a buyer with reduced transmission capacity as the percentage of energy procured is highest for the hybrid system when compared with solar installations alone.

In case of wind–solar hybrid even when a buyer procures only 40% of nominal capacity (53% of rated capacity), they would still procure ~78.5% of generated power. Similarly, at 60% of rated capacities,1 the buyer could procure more than 80% of energy generated by the system. It may be feasible to sell the balance 20% power to DISCOMs at lower value for local supply. Having local supply for surplus energy offers two benefits:

  • Realize value for surplus electricity beyond the cap.
  • Scheduling benefits: Schedules given to ISTS customers can be very accurate, and the variability could be absorbed by the local grid.


In order to explore the other uses for surplus power, we simulated the benefits of using energy storage2 in conjunction with renewable energy generation to improve the transmission efficiency for various technologies.

The following terms are defined for this study:

Capacity cap: Power load which is supplied to a customer, expressed as percentage of rated capacity of the plant.

Energy surplus: Means the energy surplus remaining after the capacity cap for ISTS buyer is supplied, can be expressed as percentage of plant generation.

  • Our assessments of wind-solar hybrids demonstrate that: Batteries will reduce energy surplus or MWh/MW as “capacity cap” is reduced.
  • Capacity cap reduction improves MWh/MW.
  • When capacity cap is reduced to 40% of rated capacity • With zero storage capacity, the system operates at 5,139 MWh/ MW and would need yield 32.4% surplus energy. • With 3 h storage, the system would operate at 7,057 MWh/ MW (which is equivalent to a thermal power plant) with 7.2% surplus energy.

It is evident from the profile in Figure 3 that with 3 h battery support and 76 MW cap, the system operates like a base load plant of 76 MW, except in the morning hours when the supply drops. The surplus power from this system would be exported during daytime hours, primarily between 9 a.m. and 4 p.m., peaking around 12–2 p.m.

1 Rated capacity of hybrids is equal to
the evacuation capacity controlled by a
2 Li-ion battery system with 7000 cycles
life, 20% DOD, round trip efficiency of

Use of energy storage with wind farms

Battery improves system MWh/MW even in the case of wind, but it leaves significantly high surplus energy to be sold to other customers, especially at reduced firm loads. For 40% firm load, wind–solar hybrid left only 7.2% surplus energy compared to 21.03% for wind-only case. The MWh/MW figures are also better for wind–solar hybrid compared to wind.

The supply curve to ISTS buyer, at 40% capacity cap, with 3 h battery, would appear as given in Figure 4. As evidenced in the surplus power profile and supply curve profile battery does not add significantly towards load firming.

Use of energy storage with solar farms

Battery support works quite efficiently with solar. With a 30% capacity cap a 3 h battery support leaves only 8.7% surplus energy and can achieve 7,901 MWh/MW supply for ISTS buyer. We assessed the impact of storage with 2 h battery support so as to limit battery costs. Generation was found to uniform for most of the day 8 am to 9 pm leaving only a few night time hours of no generation. This would work to support the peak load times and would be useful in grid balancing.


As we can see, battery impacts system performance by improving MWh/ MW as well as reducing surplus energy. However, does it make economic sense? We modelled battery costs at $650/kWh (42,000/kWh), which reflects the likely market prices for li-ion battery systems today. This can be expected to result in an annualized rental value of the storage system of approximately Rs 8,050/kWh. At these cost levels, overall cost of delivered energy would increase to Rs 12.19/kWh on using battery system. Despite improved performance and grid benefits for the wind-solar hybrid the high cost of storage may be prohibitive.3 If the costs of battery system fall to $100/kWh in the next 4–5 years, the cost profile will improve significantly. The delivered costs will be brought down to below Rs 3.5/kWh with 1 h battery support. With the added benefits of reducing scheduling errors and unscheduled interchange (UI) charges, the overall benefits of batteries will be positive for capacities between 0.25 and 1.0 h. We conclude that at the present cost– performance levels, batteries will not yield any improvements in the delivered costs 3 This assessment assumes a discount of Rs 1.0/kWh on surplus energy sale and assumes Renewable Energy Certificate (REC) benefits. of energy. However, in the future, batteries may become an economic and useful component of renewable energy systems.

3 This assessment assumes a discount of
Rs 1.0/kWh on surplus energy sale and
assumes Renewable Energy Certificate
(REC) benefits.


Our assessments indicate that significant improvements are possible in transmission charges payable by renewable energy systems, by capping capacities to below 60% of nominal capacities. Wind–solar hybrids are most efficient in terms of transmission charges at present. Energy storage would allow generators to reduce surplus energy when working with lower capacity caps. However, at the current cost levels of li-ion batteries, the benefits of storage are not economical for saving transmission charges. As storage prices reduce going forward, the benefits will become substantial over time.

Ms Snigdha Kala is Senior Manager- Investments, Emergent Ventures India Pvt. Ltd., Gurugram, Haryana, India.

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