Representative image. Renewable energy
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William_Potter
There seems to be a greater preference for hybrid renewable energy projects, as Independent Power Producers who participated in India’s clean energy auctions in 2024 were seen moving away from standalone solar and wind projects. Higher returns and steady power supply are likely reasons for this choice, say experts.
In the auctions held during calendar year 2024, hybrid projects — a mix of solar and wind projects — accounted for half of the total volumes of auctions for complex projects awarded, states BloombergNEF in its recent report.
“India’s annual clean power auctions grew 2.3 times to reach 59 GW (alternating current) in 2024. Power producers are moving away from standalone solar and wind auctions to hybrid projects having a combination of wind and solar projects. These hybrid projects accounted for more than half of the complex auction volumes awarded in 2024,” said Rohit Gadres, Specialist, India – BloombergNEF in response to a questionnaire mailed to the entity.
The total complex auctions in 2024 were 36.7 GW. Of these, the hybrid projects accounted for 18.9 GW. “The data from 2024 auctions show that IPPs are doing more hybrid projects. There are two likely reasons for this shift. The IPPs are looking to deliver more stable electricity in the future through these hybrid projects that have a mix of solar and wind,” Gadres added.
The tariffs discovered through these auctions have also been steadily rising. “The expected equity returns in such hybrid projects are typically higher than standalone solar and wind projects, which are seen as riskier. The annual capacity-weighted average tariffs (rupees/kWh) discovered at hybrid auctions show a steady rise between calendar years 2021 and 2024. The tariffs offered by these hybrid projects have risen from Rs 2.42 per unit in 2021 to Rs 3.42 in 2024,” he added.
In comparison to hybrid projects, the weighted average tariff at standalone solar auctions dipped 2 percent in 2024 to ₹2,597 per megawatt-hour (₹2.60 per unit). The tariffs discovered at wind auctions rose by 13 percent to ₹3,607 /MWh (₹3.61 per unit).
Increasing cost of wind power
When asked about the reasons behind the rising cost of wind power, Kailash Tarachandani, Group CEO – Renewables Business, INOXGFL Group stated, “Wind power remains one of the most affordable sources of energy in India, competing closely with solar while being significantly cheaper than the country’s average power procurement cost. Although capital expenditure per megawatt has risen due to the adoption of higher-capacity turbines, this should not be mistaken for an overall increase in costs. The key metric to consider is the Levelized Cost of Energy (LCoE), which remains one of the lowest among all power sources. Additionally, most developers are now investing in Hybrid, Round-The-Clock (RTC), and Firm & Dispatchable Renewable Energy (FDRE) projects. These advanced setups enable higher efficiency, better grid utilization, continuous power generation, and ultimately lower costs, making wind energy an even more attractive option for long-term sustainability.”
“Wind energy remains competitively priced compared to solar in India. Recent auction tariffs indicate that hybrid wind projects are priced between ₹3.2-3.3 per unit, while standalone wind power projects range from ₹3.5-3.6 per unit. More advanced Firm & Dispatchable Renewable Energy (FDRE) projects, which ensure consistent power supply, are slightly higher at ₹4.25-4.56 per unit. In contrast, recent solar auctions conducted by SECI have seen tariffs between ₹3-3.1 per unit. Despite the marginal difference, wind power, especially in hybrid configurations, continues to be a cost-effective and reliable alternative to conventional energy sources, making it a valuable part of India’s renewable energy mix,” Tarachandani added.
Published on April 6, 2025
