Suggested Citation: Aggarwal, Manu, and Kanika Chawla. 2019. Grid Integration Guarantee: A financial buffer to address renewable energy curtailment. New Delhi: Council on Energy, Environment and Water.
Source: CEEW-CEF Analysis
This study presents a proposed solution to the risk of renewable energy (RE) curtailment – a grid integration guarantee (GIG), which offers cover against tail-end curtailment risk with market-reflective pricing. It showcases the design, feasibility, and applications of the proposed GIG and delves into its aspects such as risk coverage, governance, capitalisation, and product features. It highlights the drivers that would support the successful deployment of the GIG and the barriers to its uptake.
The curtailment of RE generation results in the inefficient utilisation of installed RE capacity and lower than expected returns for developers and investors. The declining viability of projects with the backdown could potentially result in stressed assets for banks and equity investors. In this study, the use case has been designed for the state of Gujarat using data for solar and wind generation spanning January 2015 to July 2017.
Drivers for the uptake of a grid integration guarantee
Barriers to the uptake of a grid integration guarantee