Setting up a 700+ MW Ultra Mega Solar Power Park in Radhanesda village, Energy, Power and Allied Services Government of Gujarat Contents

Project Concept 3 Market Potential & Demand Supply 4 Growth Drivers 5 Gujarat – Competitive Advantage 6 Project Information 7 - Location/ Size - Infrastructure Availability/ Connectivity - Raw Material/ Manpower - Key Players/ Machinery Suppliers - Potential Collaboration Opportunities - Key Considerations Project Financials 12 Approvals & Incentives 14

Page 2 Project Concept

Radhanesda Solar Park: Brief Overview ► The Radhanesda Solar park will be the biggest solar park to come up in the state after the Charanka solar park set up in in 2012. Radhanesda ► The project is being executed by Gujarat Power Corporation Limited (GPCL) in collaboration with the Union Ministry of New & (MNRE).

► It is located in Radhanesda village, Vav Taluka, Banaskantha district , Gujarat

► Latitude: 24 o31’ 22” N

► Longitude: 71 o16’ 51” E

► Area: 1407 hectares

► NTPC proposed to set up Solar Projects in the Solar Park What is a Solar Photovoltaic (PV) Project?

► A Power system designed to supply usable solar power by means of photovoltaic modules that convert light directly to electricity. The maximum power that can be generated by this project () is 700 Megawatts.

Setting up a Solar Power Park

► Government of India has an ambitious target to set up 100,000 MW Solar Projects by 2022. As per guideline issued in June 2015. This 700+ MW Radhanesda Ultra Mega Solar Power Project is one of them.

► Coal-fired power plants account for 60.59% of the installed power capacity in Gujarat. While Gujarat has hydrocarbon reserves such as lignite, crude oil and natural gas, its major fuel source for generating power is coal. However, Gujarat has no coal reserves and has to depend on other states and imports to meet its requirements.

Source http://www.census2011.co.in/census/district/183-banaskantha.html http://www.dw.com/en/how-does-a-solar-power-plant-work/a-5073142

Page 3 Market Potential & Demand - Supply Thriving industries in near-by cities and special investment regions is expected to increase electricity requirement

► Many industrial cities such as , Ahmedabad, Euro Radhanesda Kandla, the upcoming Delhi Mumbai Industrial Corridor and Multivision SEZ (~230 kms) the Santalpur Special Investment region are located in (~110 kms) Morbi (~270 kms) close vicinity to the park. Ahmedaba d (~270 ► Euro Multivision Ltd., a Special Economic Zone for Non kms) Conventional Energy Sectors, including Solar Energy Equipment is also located close to the Solar park. ► Gujarat has an above average GSDP, which has been growing steadily. The Compounded Annual Growth Rate (CAGR) of Gujarat SDP’s is higher than that of India’s GDP. Favorable Government policies, such as providing 24X7 power supply to all villages and push for Make in India initiatives in the nearby industries will lead to massive energy demands. India’s GDP Trend (INR Tn) Gujarat’s GSDP Trend (INR Tn) CAGR: CAGR: 13.9% 12.7% 8.95 124.88 8.06 112.72 7.12 99.51 87.36 6.05

FY 12 FY 13 FY 14 FY 15 FY 12 FY 13 FY 14 FY 15 Source: MOSPI

► Total power consumption projection with the assumption of constant & Falling elasticity during 2014-2035 for two GDP growth scenarios along with the consequent Demand-Supply gap is exhibited below: Year Consumption Installed Demand and supply gap (MU) Capacity (MW) ► The requirement for power is projected to increase by 2035 Case: 8% GDP 2020 107,044 37,089 from 68 bkwh in 2013 to 274 bkwh with 8% growth rate of 2025 147,150 50,611 SGDP. With the higher growth rate of 10%, it will be 378 2030 201,361 66,700 bkwh. 2035 274,477 87,416 ► These imply that over 22 years power requirement would be Case: 10% GDP 4 to 5.5 times as large. 2020 118,491 37,886 2025 175,144 54,581 ► Correspondingly capacity will be 3.20 times to 4.50 times as 2030 257,706 76,160 large as the 27.27 GW of installed capacity that is required to 2035 377,720 105,933 meet Gujarat’s requirement in 2013.. Source: Source: Energy Statistics 2015 http://www.gidb.org/newsirs http://mospi.nic.in/Mospi_New/site/inner.aspx?status=3&menu_id=87 http://mospi.nic.in/Mospi_New/upload/Energy_stats_2015_26mar15.pdf

Page 4 Growth Drivers

Reduction of PV component costs ► Solar PV prices dropped significantly in the last three years primarily due to the rapid changes in the global solar markets. It can be seen that the system price has dropped by 65 percent (152 Million INR/MW to 53 Million INR/MW) between 2010-11 and 2016-17. Solar PV System costs’ trend (INR Million per MW) 152.0 144.2 CAGR: -16.1% 97.8 78.8 68.0 60.6 53.0

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Source: CERC Increased focus on sustainability due to increased import spending on conventional fuels and depleting natural resources ► India racked up one of the highest energy import bills of over $100 billion in 2012-13 and hence, a long term renewable solution has become crucial. Coal imports have been witnessing robust growth rates owing to greater demand from thermal power plants and industries. Gujarat has no coal reserves and solely relies on imports. Its other hydrocarbon resources such as Natural Gas and Crude oil resources have also been depleting. Estimated Crude Oil reserves in Gujarat Estimated Natural Gas reserves in Gujarat (MMTA) (MMTA) CAGR: 78.2 CAGR: -1.2% 77.5 136.7 -2.6%

73.0 72.2 135.0

Mar-13 Mar-14 Mar-12 Mar-13 Mar-14 Mar-15

Source: Ministry of Petroleum & Natural Gas

Source http://cleantechnica.com/2015/05/26/solar-pv-costs-to-fall-another-25-per-cent-in-three-years Page 5 Gujarat - Competitive Advantage High potential for solar power in Gujarat Global Horizontal Irradiance - Annual Average ► The Ministry of New and Renewable Energy estimates the solar energy potential for Gujarat at ~40,000 MW. ► Gujarat receives one of the highest amounts of Solar Radiation in India. (range of 5.5 - 6 kilo Watt-hour per square meter per day) ► Gujarat has 2.60 million hectares of barren and uncultivable land, making it a hotspot of solar potential in India. ► Gujarat’s percentage of Wasteland is higher than the national average.

Barren & Total Uncultivabl % Area e land /Day) 2 Gujarat 19.62 2.60 13.25

SolarResource (kWh/m India 328.73 22.53 6.85 Land Area (Million square km) Source: National Renewable Energy Laboratory (USA) Source: Census 2011, Data in million hectares Proximity to non-conventional energy sector specific SEZ and other ancillary industries ► Euro Multivision Ltd., a Special Economic Zone for Non Conventional Energy Sectors, including Solar Energy Equipment is also located about 230 kms from the Solar park. Euro Photovoltaic India, which is a part of this SEZ manufactures Solar PV Cells and Modules.

► Gujarat has a strong manufacturing and MSME Registrations in Gujarat between 2006 and 2014 engineering base with the presence of Micro, % of total Industry Number Small and Medium Enterprises across the value registrations chain by manufacturing mounting structures Basic Metal & Products 19,644 7.5 (made of galvanized steel or aluminum), cables Electrical Machinery 5,907 2.3 (made of copper or aluminum) and other Apparatus electrical accessories required to set up a Source: Industries Commissionerate, Gujarat working PV system. Solar tariffs in Gujarat are relatively highly when compared to other states

► Solar tariffs in the country have reached an all time low of INR 4.35/kWh.

► However, Gujarat is one of the few states that has a relatively high solar tariff. In 2015-16, the Gujarat Electricity Regulatory Commission (GERC) has set the tariff at INR 7.04/kWh for companies claiming Accelerated Depreciation (AD) and INR 6.35 for companies not availing AD.

Source http://ic.gujarat.gov.in/?page_id=414 http://geda.gujarat.gov.in http://www.nrel.gov/docs/fy12osti/51946.pdf

Page 6 Project Information

Site image

Source: Google Maps Location

► The Radhanesda Solar Park is in Banaskantha district , a district in Northern Gujarat. The village is ~130 km from the district headquarters, Palanpur and ~250 km from the state capital, Gandhinagar. is nearest town to which is ~42km away

Land Status ► The proposed park area would be 1407 hectares, totally owned by the Government. ► Advance possession of Land received: 20/01/2016 ► Site area largely fall under eastern part of Rann of Kutch ► Existing ground level varies from 1 m to 6 m above ► Project site has been attached by water logging up to 1 feet during the month of September and October. ► Plotting of Land: Finalized ► Counter survey & Soil investigation report: Completed ► Hydrology study: Awarded to IIT Roorkee

Project schedule for a typical Solar PV Project

Milestone Timelines Date of issue of administrative approval Zero Date Land acquisition and Financial Closure 6 months from zero date Construction of Pooling Substation, Land Development and other 15 months from zero date Common facilities as per DPR Transmission line and Grid Connectivity 18 months from zero date Final instalment on completion 18 months from zero date Source: Ministry of New and Renewable Energy

Source http://mnre.gov.in/file-manager/grid-solar/Scheme-for%20development-of-Solar-Park-&-Ultra-Mega-Solar-Power-Project-2014-2019.pdf

Page 7 Project Information

Project Components

► Road Structure

► Water Supply Infrastructure

► Building and Establishments

► External Transmission System

► Internal Transmission System

Page 8 Project Information

Utility ► Water supply for industrial purposes in the district can be obtained from Water Gujarat Water Supply and Sewage Board, Irrigation Canal and Sardar Sarovar Narmada Nigam Limited (Main Canal is 25 km away.

► Transmission Substations: Radhanesda is 18 km away from Tadav (66 kV) Power & and 35 km away from Tharad (220 kV) Evacuation

Logistics & Connectivity

Rail ► Closest railway station is ~40 kms away in Lorwarda in Banaskantha district

► The park is connected to National Highway 68, through 3 state highways Road (GJSH 132, SH 63 and GJ SH 128) covering a distance of ~40 kms

► The district has an airstrip at Palanpur Air ► ~270 kms from domestic airport at Kandla ► ~270 kms from international airport at Ahmedabad

Port ► ~270 kms from port at Kandla.

Source http://www.globalgujarat.com/images/banas-kantha-district-profile.pdf http://dcmsme.gov.in/dips/DIP%20BK_guj.pdf

Page 9 Project Information

Raw Material required for setting up park ► Solar PV Cells/Panels: Electrical device that converts the energy of light into electricity ► Mounting Structures: Used to fix solar panels on roofs, building facades, or the ground ► Cables: Interconnect solar panels and other electrical components of a , designed to be UV resistant and weather resistant. ► : Device that orients the solar panels towards the sum ► : converts the variable direct current (DC) output of a photovoltaic (PV) into a utility frequency alternating current (AC) that can be fed into a commercial electrical grid Estimated Manpower Manpower Availability in Radhanesda Main ► Skilled labor such as masons, carpenters, welders, bar workers, binders, fitters are required for setting up the Solar PV 32, 2% Park. Marginal Non- ► Skilled labor are available at a daily wage ranging from Workers, workers, INR 400 – 600; however, the daily wage set by the 813, 47% 887, 51% Government does not exceed INR 300. ► Manpower cost is around 12-15% of civil cost.

Source: Census 2011 Leading technology players/machine suppliers Indian Solar PV Module Manufacturers Foreign Companies ► (China) ► Tata Solar India ► Green Energy (China) ► BHEL ► Suntech (China) ► Central Electronics Limited ► Bosch (Germany) ► HHV Solar Technologies ► Canadian Solar (Canada) ► XL Energy ► Mitsubishi Electric (Japan) ► Moser Bear Photovoltaic ► Panasonic (Japan) ► ICOMM Tele Limited ► REC (Norway) ► Kotak Urja ► Euro Photovoltaic Leading players in the field

Indian Solar PV Power Projects Global Solar PV Power Projects ► NTPC Ramagundam Solar Plant, Telangana (20 MW) ► Topaz Solar, USA (, 550MW) ► Welspun Solar Project, Madhya Pradesh ► Solar Star, USA (SunPower, 579 MW) (151 MW) ► Longyangxia Dam Solar Park, China ► Sakri Solar Plant, Maharashtra (125 MW) (PowerChina, 850 MW) ► Meuro Solar Park, Germany (Canadian Solar, 166 MW)

Source http://www.census2011.co.in/data/village/507372-radha-nesda-gujarat.html Page 10 Project Information

Possible collaboration opportunities – Gujarat Power Sector ► Holding Company: Gujarat Urja Vikas Nigam Limited (GUVNL) ► Generation: Gujarat State Electricity Corporation Limited (GSECL) ► Transmission: Gujarat Transmission Corporation Limited (GETCO ► Distribution: Uttar Gujarat VIJ Company Limited Key Considerations ►Environment ►No negative impact of the project activity on the environment. ►Using solar panels does not pollute the air – unlike traditional forms of electrical generation there is no release of carbon dioxide, nitrogen oxide, sulphur dioxide, or mercury into the atmosphere. ►Solar panels operate silently, have no moving parts, and don't release offensive smells Key Issues ► Declining Solar tariffs

► Solar tariffs fell below INR 5 per unit, due to aggressive bidding by global companies looking to get a foothold in India’s high-growth renewable energy market (100% FDI permitted under automatic route for renewable energy generation) Tariff Trends in Solar Bids (Weighted Average Price - INR/kWh) 12.16 8.36 8.34 8.05 6.45 5.75 5.36 8.79 4.63 6.48 4.35

NSM Batch 1NSM Batch 2 Orissa Karnataka Madhya Tamil Nadu Rajastan Andhra Madhya Andhra Rajasthan (Dec '10) (Dec '11) Phase 1 (Apr '12) Pradesh (Jun (Mar '13) (Mar '13) Pradesh (OctPradesh (Jun Pradesh (Jan '16) (Mar '12) '12) '14) '15) (Nov '15) Source: Ministry of New and Renewable Energy

Gujarat has a higher solar tariff when compared to the above bids. However, the solar tariffs in the state have also been on a decreasing trend. Tariff for projects availing Accelerated Depreciation Tariff for projects not availing AD (INR/kWh) (AD) – INR/kWh CAGR: CAGR: 10.92 -16.5% -10.1% 10.15 9.70 9.44 9.02 8.39 7.04 6.35

2012-13 2013-14 2014-15 2015-16 2012-13 2013-14 2014-15 2015-16 Source Source: Gujarat Electricity Regulatory Commission http://www.gsecl.in http://www.gseb.com/guvnl/index.aspx http://www.getco.co.in/getco_new http://www.ugvcl.com Page 11 Project Financials

Estimated Project Cost and Means of Finance

► Project cost: The estimated cost of setting up a 700 MW Solar Photovoltaic project is INR 1725.6 million. The major expense area would be setting up of Internal Power Infrastructure.

► Means of Finance: Majority of funds will be raised through debt finance from banks and financial institutions, a part of it will be financed through promoters’ equity.

► Major Infrastructure: The major infrastructure required for the proposed project is:

► Land: 1407 hectares

S. No Cost parameters Total Cost (INR Million) 1 Site Development 239.1 2 Road Structure 426.2 3 Water Supply Infrastructure 167.2 4 Power Infrastructure – Internal 869.5 5 Building and Establishments 23.6 Total 1725.6

► For the proposed project, debt equity ratio of 3:1 is considered. On this basis, the means of finance proposed is as given below:

S. No Means of Finance Cost (INR million) 1 Promoters contribution 431.4 2 Term loan 1294.2 Total means of finance 1725.6

► On the basis of profitability estimates, the breakeven point for the project is as follows:

Breakeven 1 year Efficiency assumption 75% operating 12 hours per day Solar tariff INR 6.35 per kWh Interest rate assumption 18%

Page 12 Project Financials

Implementation Model

► Role of Solar Power Park Developer(SPPD, GPCL): ► Acquisition of Land ► Getting land related clearances ► Developing approach road to each plot ► Developing internal transmission system & Maintaining it ► Making arrangement to connect to the grid ► Providing basic drainage ► Providing water supply ► Role of Solar Power Park Developer(SPD)(NTPC): ► Act as project implementing agency ► Carry out internal design ► Design plant capacity ► Internal infrastructure facility ► Signing of PPA ► Take Necessary action for prospective developers

Page 13 Approvals & Incentives

Approvals required

. Consent to Establish from Gujarat Pollution Control Board . Consent to Operate from Gujarat Pollution Control Board . Basic designed approval from Chief Electrical Inspector on safety aspect . Registration to Gujarat Energy Development Agency (GEDA) which is nodal agency for renewable energy in Gujarat. . Commissioning certificate to be obtained from GEDA. . Connectivity approval from GETCO/distribution company depending upon voltage level.

Incentives

National Schemes: ► Tax holidays: The benefits of tax holidays as provided under Section 80 (I) (A) of the Income Tax Act for development, operation and maintenance of power plants, airports, ports, waste management facilities, water treatment plants, etc. is available to the developer. A 10-year tax holiday is available for solar power projects. ► Concession on excise duties and import duties on components and equipment required to set up solar plant. ► Accelerated Depreciation: Section 32 of IT Act provides Accelerated Depreciation of 80 % of the invested capital to companies with tax liability ► Feed in Tariffs: a payment made to businesses generating their own electricity through the use of methods that do not contribute to the depletion of natural resources, proportional to the amount of power generated

State-specific (Gujarat) Schemes ► Viability Gap Funding Scheme: Gujarat Infrastructure Development Board supports PPP projects financially (20% of the cost of the project). The scheme is applicable to PPP projects where private sector is selected through competitive public bidding as prescribed under section 9 of the Gujarat Infrastructure Development Act, 1999. ► Electricity Duty Exemption on generated solar power ► CSS Exemption on generated solar energy ► Cross Subsidy surcharge & Additional surcharge exemption on the generated solar power

Source http://mnre.gov.in/file- manager/UserFiles/guidelines_sbd_tariff_gridconnected_res/Gujarat%20Solar%20Power%20Policy%202009.pdf

Page 14 Energy and Petro Chemicals Department www.guj-epd.gov.in

Gujarat Power Corporation Ltd www.gpcl.gujarat.gov.in

Industries & Mines Department www.imd-gujarat.gov.in

Office of Industries Commissioner www.ic.gujarat.gov.in

Industrial Extension Bureau www.indextb.com

This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope. It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision.

Address : Block No. 8, Sixth Floor, Udhyog Bhavan, Sector 11, Gandhinagar – 382 011 Phone : 079 – 23251255-60 Fax : 91-79-23251254 Website : gpcl.gujarat.gov.in