Hybrid tenders: A catalyst for achieving India's clean energy goals

The Indian government has recently invited hybrid tenders in the conventional and renewable energy sector in the country. This is set to redefine India’s future, as the nation aims to reach its target to become carbon neutral by 2070, while meeting the increasing demand as India races towards a USD 10 trillion economy by 2032, positioning itself as the world’s third-largest economy by 2030.

 

This growth will be driven by the manufacturing sector and initiatives like 'Make in India,' with exports projected to account for 25 per cent of GDP by 2030. Hybrid tenders, combining traditional and renewable energy sources, are crucial for shaping a country's energy future.

 

 

Power, mining sectors taking up clean energy measures

 

India has taken several steps to decarbonise its power and mining sectors. Most public sector companies, including Coal India Limited (CIL), Oil and Natural Gas Corporation (ONGC) and National Thermal Power Corporation (NTPC), have announced alignment with India’s Net Zero Target by 2070 and making investments in renewable power to decarbonise its operations. The coal sector aims to ramp up renewable energy capacity to over 9 GW by the year 2030. ONGC plans to scale up its renewable portfolio to 10 GW by 2030. NTPC has set a target to achieve 60 GW of renewable energy capacity by 2032.

 

One of the most critical factors in the clean energy transition is “just transition” - a just and equitable transition of the workforce. By using this model, existing workforce in the conventional mining and power sector can be trained to work in renewable projects as well. Imparting necessary skill development and training measures will enable manpower engaged in fossil fuel extraction to be ‘future ready’.

 

This move will ensure sustainable growth in the renewable sector while maintaining grid stability and reliability. Energy transition would also smoothen through the integration of cleaner sources like solar and wind with conventional energy sources. By leveraging such diverse energy sources, hybrid tenders will eventually reduce reliance on fossil fuels, lower emissions, and enhance energy security.

 

Hybrid tenders: A forward-looking strategy

 

This initiative from the Indian government towards hybrid tenders is a forward-looking strategy that accommodates the nation’s growing energy demands while transitioning to a cleaner energy portfolio.

 

India has reached significant milestones in its journey towards a greener tomorrow, already surpassing 200 GW of installed renewable energy capacity, which aligns with its ambitious goal of achieving 500 GW of renewable energy by 2030. This only goes on to show the government’s dedicated approach in finding the right solutions to achieve commitments made at COP 26.

 

With the formalisation of the planned compliance carbon market under the Carbon Credit Trading Scheme (CCTS), these hybrid tenders will also de-risk the plants against future regulatory risks by reducing the emission intensity of the plants, when coal-based plants are added to the compliance mechanism.

 

The government's policies include competitive bidding processes for tenders, promoting fair competition and transparency. The government has also established guidelines to promote transparency and accountability in the tendering process. These guidelines have contributed to the development of both national and global players in the green energy sector, enhancing its competitiveness.

 

Hybrid tendering can accelerate achievement of India’s Nationally Determined Contribution (NDC) target of 500 GW of renewable and 50 per cent cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030 through merging different renewable sources into single projects. This hybrid mode of power projects will give further boost to achieve and go beyond the NDC target of 500 GW renewable energy. This can be implemented in sync with other policies of utilising renewable energy for repurposing exiting coal power plants under planned retirement.

 

Support to workers and communities

 

Integrating the concept of a just transition into hybrid energy tenders, which combine renewable and conventional energy sources, is essential to ensure that India’s shift to a low-carbon future is both sustainable and equitable. These tenders can support workers and communities impacted by the transition by including provisions for retraining, job creation, and economic opportunities in renewable energy sectors. Additionally, hybrid projects can ensure affordable energy access for vulnerable populations and promote sustainable economic development, particularly in regions dependent on fossil fuels. By incorporating environmental and social safeguards, hybrid tenders can help make India’s energy transition not only effective but also inclusive, ensuring that no one is left behind in the process.

 

A developing country like India needs to ensure it not just manages to scale its energy targets, but also performs strongly on the economic front. For the right balance, hybrid projects are more than just need of the hour, they are also the catalysts for Indian energy industry needs. With projects merging the conventional and the renewable sector, a new workforce that understands the transition will not just benefit India, but several countries across the world in the decades to come.

 

A broader outlook shows that this initiative also comes with its fair share of challenges. The first hurdle to cross is the expertise in transition. While solar, wind and hydro sources are relatively newer power generation mechanisms, traditional sources such as coal and petroleum have been in use for centuries now. However, there’s a silver lining as well. Within a hybrid framework, experienced hands across traditional forces (read: corporations) would continue their usage of conventional energy sources and meanwhile, would also gradually move towards healthier sources. This would create an experienced group for a quicker transition in the future.

 

Some questions have also been raised about the environmental sensibility and sensitivity in usage of conventional sources in hybrid projects. It is critical to understand that India is an energy-deficient nation, on both conventional and renewable fronts. Thus, to ensure the energy grid is maintained while we shift to healthier modules, hybrid models are the only modern solution. This will ensure that there is no brake on India’s development as an economic power, while we continue to work towards our goal of a net zero by 2070.

 

For a developing nation like India that fulfills over 75% of its energy needs from traditional sources, moves such as hybrid tendering will bring innovation, technological advancements and world-class operational methods and smooth shift towards just transition. It will also witness new infusion of capital in research and development for continued improvement in the continuously-budding sector. For instance, companies that integrate energy storage technologies with solar or wind will contribute to optimising energy usage and reliability.

 

Hybrid projects beneficial for nation’s economy

 

Integration of renewable energy sources with traditional power generation can also offset the massive initial capital investments required for the renewable sector. According to IRENA, 2020, the average cost of solar photovoltaics has dropped by around 89 per cent since 2009, making them a more lucrative option when coupled with thermal power. With efficiency and affordability, hybrid projects can leverage lower operational costs and improved generation efficiency, ultimately benefiting consumers and the nation’s economy.

 

India's largest energy conglomerate National Thermal Power Corporation (NTPC) has already developed technology for low-cost option for adding green power to the existing coal-based generation fleet through Solar thermal hybrid applications. The hybrid system will inject solar-generated steam, resulting in a lower reliance on fossil fuels. This approach solves the problem of fluctuations in output associated with solar power and hence maintains the reliability of supply to the grid. Solar energy can be used to either increase power or reduce fuel consumption. This technology has already been used for integration of solar thermal plants with the 210 MW coal fired unit of NTPC Dadri (Unit #4).

 

It is clear that hybrid contracts have the potential to help balance energy supply while supporting long-term sustainable development. They are instrumental in engaging traditional energy players, leveraging their expertise and resources to navigate the evolving energy landscape and ensure a smoother transition. Ultimately, such policies will support broader goals of energy security, economic growth, environmental sustainability, and a just transition, positioning India to benefit from a forward-looking energy strategy that meets both current and future needs.  (The writer is an environment and climate policy expert. He is the co-founder of Pristine Planet, a climate advisory firm)    Disclaimer: These are the personal opinions of the writer. They do not reflect the views of www.business-standard.com or the Business Standard newspaper