Renewable Energy Targets: India and MP

Solar ( 100 GW)

Wind (60 GW)

Bio Energy (10 GW)

Small Hydro (5 GW)

Solar (5675 MW)

Bio Energy (118 MW)

Wind (6200 MW)

Small Hydro

(25 MW)

GoI targets by 2022 MP targets by 2022

Total 175 GW of Power through renewable energy source Total 12 GW of Power through renewable energy source

Madhya Pradesh will contribute ~7% of country’s renewable energy capacity by the end of 2022

Source:- MNRE Website

RPO Targets for MP

1.0%

2.8%

4.8%

6.8% 7.3%

7.8% 8.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Solar RPO Target • Increasing Solar RPO

requirements over the year for Discom in Madhya Pradesh

• 8 fold increase in the Solar RPO by 2022 will allow solar players in the world to increase their investment in the State of Madhya Pradesh.

RUMS: Just another JV

• Approval: State Cabinet approval in April 2015

• Formation: Formed in June 2015

• Staff: No full-time employee

• Infrastructure: No office

• BoD: Board of 3(2 from SECI)

Do your own thing

• Request for freedom to ‘do your own thing’;

• Allowed, but no VGF support;

• Fixed tariff under VGF falls from Rs 5 to Rs 4.50;

Previous Solar Bids Results

State and Project Project Capacity (MW) Lowest Tariff Discovered

Andhra Pradesh – Gani Solar Park 500 Rs. 4.63/kWh

Rajasthan – Bhadla Solar Park 420 Rs. 4.34/kWh

Karnataka – Pavagada Solar Park 500 Rs. 4.78/kWh

Karnataka – Pavagada Solar Park 100 Rs. 4.84/kWh

State and Project Project Capacity (MW) Fixed Tariff (Rs./kWh)

Lowest VGF

Uttar Pradesh - UP Solar Park 440 Rs. 4.43/kWh VGF – Rs. 74.99 lakhs/MW (DCR)

Andhra Pradesh - Anantapuramu Solar Park

500 Rs. 4.43/kWh VGF – Rs. 44.50 lakhs/MW

Gujarat – Charanka Solar Pak 250 Rs. 4.43/kWh VGF – Rs. 69.75 lakhs/MW

UP – Solar Park 315 Rs. 4.43/kWh VGF – Rs. 99.95 lakhs/MW

SECI

NTPC

Rewa Results

Unit Winner 1st Year Tariff

1 Mahindra Susten 2.979

2 Acme 2.970

3 Solenergi 2.974

List of Bidders: 20 totalling 7500 MW Foreign Companies Indian Multinational Companies

SB Cleantech Seven Ltd. (Soft Bank, Japan) Azure Power Thirty Four Pvt. Ltd.

GDF Suez Energy India (Engie, France) Shapoorji Pallonji Infrastructure Pvt Ltd

Green Infra Wind Energy Ltd. (Sembcorp, Singapore) Aditya Birla Renewables

Enel Green Power Development S.R.L. (Italy) ReNew Power Ventures Pvt. Ltd.

Solenergi Power (Mauritius, a company of Ostro Energy) Hero Solar Energy Private Limited

Canadian Solar Energy Holding Singapore 3 Pte Limited Acme Solar Holdings Private Ltd.

Mahindra Susten Pvt. Ltd.

Torrent Power

AMPL Cleantech Pvt. Ltd.

Orange Renewable Power Private Limited

ACB (India) Ltd.

Narmada Hydropower Development Company

Rose Petal Solar Energy Pvt. Ltd. (Adani)

Rattan India Solar 5 Limited

Enhancements that make low tariff possible without VGF

FOOTER

• Proactive consultations to address project specific risks • Discussions with not just bidders, but their lenders • Reputed Transaction Advisers

Carefully managed transaction process

• First solar project with inter-State open access consumer • PPAs extensively negotiated with end procurers

End-procurer issues tied upfront

• Enhanced bankability of agreements • Credit enhancement: State Guarantee for MPPMCL obligations • Three tier Payment Security

Strong Project Structure

• One of the lowest charges across solar parks • World Bank funding • CTF funding

Low Charges

• 95% land in hand prior to bid • Bid tariffs for specific plots, after full due diligence • PGCIL & internal evacuation infrastructure ready

Project preparedness

Key areas of improvements in the bid

• Change in Law

• Payment Security Mechanism

• Termination Compensation

• Operation and Maintenance charges in solar parks

• Evacuation Infrastructure

• Deemed Generation

• Equity Infusion

• Treatment of PBGs in case of delays by SPDs

Key Features which make Rewa UMSPP unique

First Solar Project in India having different Categories of Off-takers: ◦ MPPMCL and Discoms (Licensed Utilities)

◦ DMRC (Open Access Consumer)

First project to get funding from Clean Technology Fund (CTF) in India

Innovative design of Contracts to address the varying demand pattern of the off-takers.

Three tier payment security Mechanism – First time in India

Largest solar power tender led by a State: other recent bids in news are led by CPSUs

No use of Viability Gap Funding

Bidders allowed unprecedented flexibility in bidding for Projects – Unique reverse auction being tried for first time in India

World Bank funding first solar park in India

Project Participants • Grant for Solar Park infra & Payment Security Fund MNRE

• Land & State Guarantee of MPPMCL’s obligations GoMP

• Implementation Agency: 50-50 JV between SECI & MPUVNL

RUMSL

• Power Procurers MPPMCL & DMRC

• External Evacuation Infrastructure PGCIL

• Lead Transaction Adviser IFC

• Loan through MNRE for infrastructure World Bank

• Project Management Consultant for internal evacuation infra MPPTCL

• Invest about INR 4000 crore to develop solar projects Developers

Power procurement through Optimum Scheduling

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Time block wise Optimum Scheduling explained for a day

Total DMRC Consumption Total Generation for 750 MW Generation in conventional (99 MW)

DMRC demand for each of the time blocks

Generation of 99 MW Solar power in case of conventional scheduling

99 MW DMRC LTOA

Generation for 750 MW solar Park

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Time block wise Optimum Scheduling explained for a day

DMRC Drawal MPPMCL Drawal Total DMRC Consumption Total Generation for 750 MW Generation in conventional (99 MW)

All Energy generated scheduled to DMRC

Again all Energy generated scheduled to DMRC

Energy scheduled to MPPMCL beyond DMRC consumption or 99 MW limit

99 MW DMRC LTOA

Power procurement through Optimum Scheduling

Benefit to the procurers MPPMCL:

Total Power Purchase from Rewa: 1,233 MUs annually;

Current average power purchase cost in FY 16-17: Rs. 3.10/kWh

Average Power Procurement cost from Solar energy: Rs. 7.03/kWh (Lowest being Rs. 5.05/kWh)

Benefit to MPPMCL over 25 years (NPV basis, considering their current lowest solar power procurement): Rs. 2,086 Crores

DMRC:

Total Power Purchase from Rewa: 345 MUs annually;

DMRC current tariff from Discoms:

Benefit to DMRC over 25 years (NPV basis, considering their current procurement from Discoms): Rs. 1,220 Crores

Thanks!