Solar Energy Corporation of Limited A Government of India Enterprise Schedule-A Central Public Sector Undertaking Presentation Structure

1. Introduction to SECI

2. Government initiatives for promoting RE

3. SECI initiatives for development of RE

4. SECI competitive bidding for RE 1. Introduction to SECI About SECI :

➢ Incorporated on 20th September 2011 (not for profit) ➢ Converted into a Commercial Company on 9th Nov, 2015 ➢ Scope covers all forms of Renewable Energy ➢ Authorised share capital: Rs. 2000 Cr. ➢ Paid up share capital: Rs. 354 Cr. ➢ Debt-free company ➢ Category I (highest) Power Trading Licensee by CERC ➢ Dividend paying company since 2015-16 Business Areas :

• Solar, Wind, hybrid, energy • 11 MW commissioned storage tenders • 10 MW under execution • Schemes for Rooftop solar • Over 450 MW under due- • Solar parks diligence in floating solar, energy storage technologies • CPSU scheme • Upcoming technologies: Off- Projects MNRE shore wind (Own) Schemes • Solar street lights, • 100 MW completed Lanterns, home lighting • 450 MW under systems Off-grid SECI PMC implementation • Assisting Village systems activities • Major clients: PSUs and Electrification under Govt. agencies DDUGJY Power Consulting Trading • Technical and financial due • Traded 16+ BU of electricity from diligence, Feasibility studies, solar and wind projects Detailed project reports, Resource assessment etc.

8 2. Govt. initiatives to promote RE Initiatives to achieve RE target

• Renewable Purchase Obligation (RPO) trajectory declared for up to 2022; • Waiver of Inter State Transmission System charges and losses for solar and wind power for projects commissioned till March, 2022; • Standard guidelines for procurement of solar/wind power through tariff based competitive bidding process issued. • Technical Standards for Solar/Wind PV systems notified • New Initiatives such as Floating Solar, Solar Wind hybrid, Domestic Manufacturing, Energy Storage etc.

7 Major existing Schemes for Solar Sector

❑ Solar Park Scheme - Target: 50 solar parks, 40000 MW

❑ VGF Scheme – Commissioned: 5200 MW, Now no VGF required

❑ CPSU scheme:- Target: 13000 MW, Allocated: 2908 MW, Commissioned: 881 MW

❑ Bundling Scheme:- Capacity: 3000 MW, Commissioned: 2950 MW

❑ Rooftop Scheme, Canal Bank and Canal Top Scheme, Defence Scheme

❑ Off-grid schemes- Solar Pumps, Street Lights, Home Lights, Study Lamps, Small plants

8 3. SECI initiatives for development of RE Large-Scale Solar Projects:

• Central Implementing agency for large-scale tenders for Solar Energy

• Tendered capacity: 48 GW, • Capacity awarded: 18.3 GW, • Commissioned projects: 5.3 GW Large-Scale Wind and Hybrid Projects

• Central Implementing agency for large-scale tenders for Wind and Solar-Wind Hybrid technologies • 12.6 GW tendered, • 9.4 GW awarded, • 1.7 GW commissioned • Hybrid: 4 GW tendered, 1.4 GW awarded Innovative tenders by SECI:

7.5 • Solar PV Projects in Leh and Kargil Districts, GW Jammu & Kashmir

• ISTS Connected Solar PV project linked with 2 GW (per Annum) Solar Manufacturing Facility 7 GW with Green-Shoe option

1.2 • ISTS Connected Solar PV projects (ISTS-VII) with Peak Power Supply for 6 hours (off-peak hour GW tariff-2.88, peak hour tariff to be discovered)

• RTC power (availability factor of 85% , tariff to be 0.4 GW discovered which shall be escalated 4% annually upto 15 years) Project Management Consultancy

• Undertaking project management consultancy for solar projects on turnkey basis • Major clients: Govt. agencies/ PSUs • 100 MW capacity commissioned • 400+ MW under implementation Projects through own Investment

• 11 MW of solar projects under commercial operation (Rajasthan, A&N) • 10 MW under execution (Karnataka) • Upcoming projects:

• 160 MW solar-wind-battery hybrid project in Andhra Pradesh • 150 MW Floating solar project in Jharkhand • 200 MW Floating solar project in Uttarakhand • 100 MW Solar + Storage project in Chhattisgarh • Diesel replacement project in Lakshadweep Rooftop solar and off-grid systems

• Implementing agency for tenders under MNRE subsidy/incentive schemes • 647 MW awarded, 350+ MW commissioned

• PMC- 5.76 MW commissioned for GAIL, 8 MW for BHU is under execution • CAPEX- 1 MW in Andaman & Nicobar • Decentralised systems- lanterns, home lighting systems, streetlights etc. Solar Parks:

Objective:

The aims to provide a huge impetus to solar energy generation by acting as a flagship demonstration facility to • encourage project developers and investors, • prompting additional projects of similar nature, • triggering economies of scale for cost-reductions, • technical improvements and achieving large scale reductions in greenhouse gas (GHG) emissions.

“The solar park is a concentrated zone of development of solar power generation projects and provides developers an area that is well characterized, with proper infrastructure and access to amenities and where the risk of the projects can be minimized. Solar Park will also facilitate developers by reducing the number of required approvals.” Solar Parks

• Implementing MNRE scheme for setting up of solar parks in different states (23499 MW) • Solar Parks in 6 states being set up through JV of SECI with State agencies: • Andhra Pradesh Solar Power Corporation Limited • Karnataka Solar Power Development Corporation Private Limited • Lucknow Solar Power Development Corporation Limited • Renewable Power Corporation of Kerala Limited • Rewa Ultra Mega Solar Limited • Himachal Renewables Limited • Over 10 GW of parks under implementation through JVs Solar Parks in India:

Progress of solar parks:

a) Total solar parks: 35+ b) Solar parks cover states like Andhra Pradesh, Rajasthan, Gujarat, Tamil Nadu, Karnataka, Madhya Pradesh, Kerala, Odisha, Maharashtra, Uttar Pradesh, West Bengal, Jharkhand, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland etc. c) Total Project Capacity: 22879 MW d) Project Commissioned Capacity: 7030 MW e) Projects under execution: 3015 MW f) Projects under Tendering: 3725 MW g) Total Project Capacity to be tendered/ under DPR: 9109 MW 4. Competitive bidding process and selection process Key tender provisions for B-O-O Projects Project scope & RfS overview

Projects to be implemented under the Build-Own-Operate (BOO) basis. Successful bidders to be selected through a competitive e-bidding, followed by e-Reverse Auction process

Scope of the developer includes setting up of Solar/Wind/Hybrid Power Projects along with implementation of power evacuation and transmission infrastructure, up to the Interconnection Point.

Power to be purchased by SECI at the tariff discovered, and is sold to Buying Utilities at discovered tariffs, with an additional trading margin being levied by SECI.

Bidding and reverse auction carried out on VGF/tariff/both being the parameters. Average Term of Agreements: 25 years Key tender provisions for B-O-O Projects Major RfS provisions

Cumulative project capacity to be awarded to a single Company including its Parent, Affiliate or Ultimate Parent-or any Group Company. Min. & max. limits fixed depending on tender capacity

Bid submission deadline generally fixed at about 45 days from the date of issuance of tender documents

Financial Closure to be achieved within 12 months from the Effective Date of PPA Commissioning deadline: 18 months from the Effective Date of PPA

Bidders to meet the General and financial eligibility criteria as per provisions of RfS

Bidders to submit cost of RfS document (fixed irrespective of quoted capacity) and bid processing fee (based on no. of projects quoted for) EMD: upto 2% of the estimated Project cost PBG: upto 5% of the estimated Project cost Key tender provisions for B-O-O Projects General Eligibility Criteria

• “Companies” as defined under Companies Act 2013, or respective national laws (in case of foreign bidders) are eligible. • Consortium also allowed (No JVs), with one member acting as the Lead Member, to carry out bid submission on behalf of consortium. In this case, financial eligibility criteria required to be met in line with the equity commitment ratio as declared in Consortium Agreement. • In case of foreign bidders as well as Consortia, it is mandatory to incorporate a Company in India under Companies Act, 2013, as an SPV. Multiple SPVs can be incorporated for multiple Projects. Agreements are signed with the SPVs. • Indian bidders can also execute Projects through SPVs in case of award of Projects. Key tender provisions for B-O-O Projects Financial Eligibility Criteria

• Net-worth: Minimum Net-worth required @ 20% of the total estimated project cost of the cumulative capacity quoted. • Liquidity: Bidder shall be required to demonstrate at least one of the following parameters: • Minimum annual turnover @INR 6 million/MW (wind & hybrid)/@INR 5million/MW (solar) of the total quoted capacity. • Minimum PBDIT amount @ INR 1.2 million/MW (wind & hybrid)/@INR 1 million/MW (solar) of the total quoted capacity. • Line of Credit for a minimum amount @ INR 1.5 million/MW (wind & hybrid)/@INR 1.25 million/MW (solar) of the total quoted capacity. • Above parameters to be met as on the last date of previous Financial Year Key tender provisions for B-O-O Projects Plant Performance • CUF to be declared at the time of bid submission, may be revised once in the 1st year of COD (for solar/hybrid) & once within first 3 years of COD (for wind) • Minimum CUF quoted should be 17% (solar), 22% (wind), 30% (hybrid) • Performance criteria • Specify a range within which deviations from the quoted CUF is allowed, without any penalty. Takes into account the degradation factor in case of Solar Projects. • Shortfall in generation to be levied penalty as per provisions of RfS • Generation compensation to be provided in case of offtake constraints on account of transmission constraint, Grid unavailability and backdown • Excess generation and early commissioned power to be purchased @ 75% of the PPA tariff Key tender provisions for B-O-O Projects Project Commissioning

Scheduled Commissioning Date (SCD): 18 months from Effective Date of PPA.

Project declared as “fully commissioned” when the entire rated capacity has been installed and power flows into the grid.

Part commissioning allowed for min.50% of the Contracted Capacity. Project to be commissioned in line with commissioning guidelines issued by SECI.

Liquidated Damages: PBGs to be encashed until the first six months (solar)/ nine months (wind/hybrid) from the SCD, on pro-rata basis, proportionate to the capacity not commissioned.

In case of further delay, PPA stands terminated limited to the capacity commissioned until the above deadline including liquidated damages. Selection Process: Bid evaluation

Step 1

Techno commercial evaluation of the bidders

Step 2 First round Tariff of the techno Financial Bid Evaluation commercially qualified bidders evaluated and ranking done on ascending order.

Step 3

Shortlisting of bidders for reverse auction Shortlisting Process: Eligibility for e-RA

• Bidders provided opportunity to reduce tariffs/VGF • Elimination of bidders prior to e-RA: competitive First round tariffs/VGF

Example

(i) In case ST <1200 MW, SE = 0.8 X ST

SE (ii) In case ST ≥ 1200 MW, SE = 0.8 X ST, subject to maximum eligible capacity being tender capacity Where m =Total number of techno- If (T-m) is even m+(T-m)/2, if Sm≥ SE commercially qualified bidders (after ranking is done in ascending order n = { from L1 onwards) such that (S < S If (T-m) is odd m+(T-m+1)/2, if Sm ≥ SE m-1 E MW and Sm ≥ SE) and 1≤m≤T

• T= Total techno-commercially shortlisted bidders

• ST = Total bid capacity of techno-commercially shortlisted bidders • SE =Eligible capacity for award • n=Total eligible bidders for e-Reverse Auction Shortlisting Process: Eligibility for e-RA

Example-continue.. If (T-m) is even

Sl. Techno Rank Capacity Cumulative T m SE n Shortlisted No. commercially (MW) Capacity Bidders for e- qualified Bidder (MW) RA 1 B3 L1 250 250 10 8 1200 9** B3 2 B5 L2 200 450 MW* B5 3 B1 L3 300 750 B1 4 B4 L3 100 850 B4 5 B2 L4 50 900 B2 6 B6 L5 70 970 B6 7 B7 L6 80 1050 B7 8 B8 L7 240 1290 B8 9 B9 L8 450 1740 B9 10 B10 L9 600 2340

*SE=0.8x2340=1872, subject to maximum tender capacity i.e. 1200 MW **n=8+(10-8)/2=9 as per above formula Shortlisting Process: Eligibility for e-RA

Example-continue.. If (T-m) is odd

Sl. Techno Rank Capacity Cumulative T m SE n Shortlisted No. commercially (MW) Capacity Bidders for e- qualified Bidder (MW) RA 1 B3 L1 250 250 10 9 1200 10** B3 2 B5 L2 200 450 MW* B5 3 B1 L3 300 750 B1 4 B4 L3 100 850 B4 5 B2 L4 50 900 B2 6 B6 L5 70 970 B6 7 B7 L6 80 1050 B7 8 B8 L7 100 1150 B8 9 B9 L8 540 1690 B9 10 B10 L9 650 2340 B10

*SE=0.8x2340=1872, subject to maximum tender capacity i.e. 1200 MW **n=9+(10-9+1)/2=10 as per above formula Shortlisting Process: Eligibility for e-RA

Example-continue.. If (T-m) is odd

Sl. Techno Rank Capacity Cumulative T m SE n Shortlisted No. commercially (MW) Capacity Bidders for e- qualified Bidder (MW) RA 1 B3 L1 250 250 11 8 1200 10** B3 MW* 2 B5 L2 200 450 B5 3 B1 L3 300 750 B1 4 B4 L3 100 850 B4 5 B2 L4 50 900 B2 6 B6 L5 70 970 B6 7 B7 L6 80 1050 B7 8 B8 L7 240 1290 B8 9 B9 L8 450 1740 B9 10 B10 L9 600 2340 B10 11 B11 L10 200 2540

*SE=0.8x2540=2032, subject to maximum tender capacity i.e. 1200 MW **n=8+(11-8+1)/2=10 as per above formula Shortlisting Process: Eligibility for e-RA

Example-continue.. If (T-m) is even

Sl. Techno Rank Capacity Cumulative T m SE n Shortlisted No. commercially (MW) Capacity Bidders for e- qualified Bidder (MW) RA 1 B3 L1 250 250 11 7 1200 9** B3 MW* 2 B5 L2 200 450 B5 3 B1 L3 300 750 B1 4 B4 L3 100 850 B4 5 B2 L4 50 900 B2 6 B6 L5 70 970 B6 7 B7 L6 240 1210 B7 8 B8 L7 100 1310 B8 9 B9 L8 350 1660 B9 10 B10 L9 140 1800 B10 11 B11 L10 200 2000

*SE=0.8x2000=1600, subject to maximum tender capacity i.e. 1200 MW **n=7+(11-7)/2=9 as per above formula Selection Process: e-Reverse Auction

Reverse Auction: Conducted on an independent portal- live & transparent process.

Bidders can improve their ranking by quoting revising their last quoted tariff/VGF by any number of decrements. No revision allowed in quoted capacity. Bucket filling process: L1 bidder allotted its quoted project capacity, the next higher bidder allotted its quoted capacity and process continues till total capacity is exhausted. Time stamping of bids as tie-breaker: In case of tie, among two or more bidders, they are considered in the chronological order of their last bid with preference to that bidder who has quoted his last bid earlier than others. Transparent process

e-RA results: Pseudo identities e-RA results: Names of bidders

2000 MW ISTS-connected Wind Power Projects (Tranche-III)

6 Case study: Bhadla Solar Parks

• Total capacity of 750 MW divided into 2 Solar Parks in Rajasthan: 500 MW (Phase-III) and 250 MW (Phase-IV). • Each Park divided into 5 Projects: 5X100 MW and 5X50 MW • Provided opportunities to everyone-’large’ companies as well as ‘smaller’ players, they could quote for a single Project or for the entire Parks: Resulted in aggressive bidding

• The e-RA for 250 MW was held before that for 500 MW. • The period between above 2 auctions was kept just sufficient to give bidders time to analyze and rework based on the discovered tariff. • Limited time between the auctions effectively ruled out possibility of cartelization.

• Bids that were submitted on 19/04/2017 had their e-RA conducted on 09/05/2017 (in just 19 days), which created ripples in the market. Bhadla Solar Parks: Historic results • e-RA for 250 MW Bhadla Phase-IV Park: • Began at the tariff of INR 3.93/kWh at 14:00 Hrs on 09/05/2017 • Non-stop 9.5 hours’ session-closed at 23:30 PM on 09/05/2017 • Resulted in a record low fixed tariff of INR 2.62/kWh (US Cents 4.05/kWh).

• e-RA for 500 MW Bhadla Phase-III Park • Began at the tariff of INR 3.93/kWh at 14:00 Hrs on 11/05/2017 • Non-stop 20 hours’ marathon session, closed at 10:00 Hrs. on 12/05/2017 • Resulted in lowest ever fixed tariff of INR 2.44/kWh (US Cents 3.78/kWh).

• Highlight: None of the bidders shortlisted for e-RA opted for VGF, although it was part of the tender.

• Unprecedented market response: • 250 MW Park-27 bidders with 3250 MW bid capacity (oversubscribed by 13 times) • 500 MW Park-24 bidders with 5500 MW bid capacity (oversubscribed by 11 times) • Participation from several international players, including SoftBank (Japan), Phelan Energy (South Africa), EDF Energy (UK), (France), Alfanar (Saudi Arabia), etc Results for Bhadla Phase-III

Bidder's Quantity Awarded capacity Bidder's Name Tariff (INR/kWh) (MW) (MW) ACME Solar Holdings Private Limited 200 2.44 200 SBG Cleantech One Limited 500 2.45 300 Hero Solar Energy Private Limited 300 2.46 --- ReNew Solar Power Private Limited 500 2.47 --- Avaada Power Private Limited 200 2.60 --- Shapoorji Pallonji Infrastructure 400 2.65 --- Capital Company Pvt. Ltd. RattanIndia Solar 3 Private Limited 100 2.87 --- Duroc Solar Private Limited 100 2.88 --- Orange Renewable Power Private 200 2.95 --- Limited Lightsource Renewable Energy 100 2.98 --- Holdings Limited Solairedirect Energy India Private 300 3.08 --- Limited Mahoba Solar (UP) Private Limited 300 3.14 --- Aditya Birla Renewables Limited 200 3.18 --- Results for Bhadla Phase-IV Bidder's Quantity Awarded capacity Bidder's Name Tariff (INR/kWh) (MW) (MW) Phelan Energy Group Ltd 50 2.62 50.00 Avaada Power Private Limited 100 2.62 100.00 SBG Cleantech Three Limited 250 2.63 100.00 Mahoba Solar (UP) Private Limited 250 2.71 --- ReNew Solar Power Private Limited 250 2.74 --- Natems Power Private Limited 50 2.75 --- Forty Five Pvt. Ltd. 100 2.80 --- Mira Zavas Private Limited 50 2.92 --- Cambronne Solar Private Limited 50 2.94 --- Orange Renewable Power Private 50 3.00 --- Limited IL&FS Energy Development Company 50 3.12 --- Limited ACME Solar Holdings Private Limited 50 3.36 --- RattanIndia Solar 4 Private Limited 50 3.37 --- Mahindra Renewables Private 100 3.59 --- Limited Key highlights/Learning

Fall in solar tariffs, a result of combination of various factors, most important being the GoI’s initiative to cover solar/wind power procurement by SECI under the ambit of Tripartite Agreement- Payment Security Mechanism

Other factors include: higher CUF in Rajasthan, drop in module prices in international market, strengthening of Indian rupee against US dollar, innovative financing methods adopted by successful bidders.

SECI’s Contract Agreements-considered bankable by international lending agencies- low capital cost, long tenure capital flow, attracting first time international players and investors in the Indian market.

Every possibility of the above success being replicated in other countries, if such innovations are adopted. No. of market players, business environment of the country, order booking position of the key players along with extensive market research play key roles, depending on each country Thank You