Context:

Ministry of new and renewable energy (MNRE) has proposed ‘bundling’ scheme to boost to renewable energy.

About:

• MNRE ‘bundling scheme’: In order to boost the renewable energy sector, MNRE has come out with the draft framework for a scheme to supply round-the-clock (RTC) power from wind and solar plants.
• The scheme proposes to sell renewable energy and thermal power together in a ‘bundle’ so that buyers can get the assurance of receiving fi rm uninterrupted electricity supply.
• Objective: The scheme aims at addressing issues of intermittency, limited hours of supply and low capacity utilisation at renewable power plants, and make them more attractive for stateowned power distribution companies (discoms).
• Working of the scheme: MNRE has proposed that a government authorised intermediary agency would carry out auctions where power sellers can quote single composite tariffs for renewable energy-based power, combined with one single thermal fuel source (coal or gas)
• The intermediary agency would then sell the power to discoms.
• Energy structure in India: Approximately, 70 per cent of India’s power requirements are coalbased. The higher cost of thermal power is attributed to rising in the cost of coal imports and no signifi cant capacity addition. Solar and wind tariffs are cheaper than the cost of thermal power.

Details of bundling scheme

• Renewable energy supply: The generator is required to supply at least 51% of electricity sold under this scheme from renewable sources.
• Renewable power may include a combination of solar, wind, small hydro with or without any energy storage system.
• The renewable energy component bought under this scheme shall be eligible for complying with renewable purchase obligation (RPO) norms.
• Composite tariff: The composite tariff would consist of 51% renewable energy tariff, 30% thermal fuel cost and the remaining would account for the fi xed thermal tariff.
• The proportion of thermal tariff shall be adjusted to cover the possible changes in coal or gas prices, as per the index to be notifi ed by the regulatory commission.
• Responsibility with power generator: Power generator will be responsible for supplying thecomposite power, hence, discoms will no more have to integrate renewable power into the grid.