International Journal of Management (IJM) Volume 11, Issue 8, August 2020, pp. 1226-1244, Article ID: IJM_11_08_111 Available online at http://iaeme.com/Home/issue/IJM?Volume=11&Issue=8 ISSN Print: 0976-6502 and ISSN Online: 0976-6510 DOI: 10.34218/IJM.11.8.2020.111

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A CASE STUDY ON PLANNING OF REWA ULTRA MEGA PROJECT

Kesha Patel Teaching Assistant, IndukakaIpcowala Institute of Management (I2IM), Constituent Institute of Charotar University of Science and Technology (CHARUSAT), Changa, Gujarat,

Govind B. Dave Dean, Faculty of Management Studies (FMS) Principal, IndukakaIpcowala Institute of Management (I2IM), Constituent Institute of Charotar University of Science and Technology (CHARUSAT), Changa, Gujarat, India

ABSTRACT The Objective of this study explains the Study on Planning of Power Project. India has improved to 2nd from 3rd position, According to the report published by the "[1] Country Attractiveness Index." This has been on account of government initiatives and support for developments in the country’s economy. The report suggests that, with the government's aim to develop 175 GW of renewable energy by 2022 and make renewable energy accountable for 40 percent of installed power by 2040, India remains in second place Keywords: Employee satisfaction; Organizational culture; Career trajectory; Work life balance; Fair compensation Cite this Article: Kesha Patel and Govind B. Dave, A Case Study on Planning of Rewa Ultra Mega Solar Power Project, International Journal of Management, 11(8), 2020, pp. 1226-1244. http://iaeme.com/Home/issue/IJM?Volume=11&Issue=8

1. INTRODUCTION 1.1. Industry Background India has improved to 2nd from 3rd position, According to the report published by the "Renewable Energy[1] Country Attractiveness Index." This has been on account of government initiatives and support for developments in the country‟s economy. The report suggests that, with the government's aim to develop 175 GW of renewable energy by 2022 and make renewable energy accountable for 40 percent of installed power by 2040, India remains in second place.

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Figure 1 Source:https://www.insightsonindia.com/2017/04/19/insights-daily-current-affairs-18-april-2017/ As of January 2019, the total installed capacity of the country's renewable energy (excluding large hydro) was 74.08 GW. The ultimate hope is that India will increase renewable energy capacity by up to 8.5 GW in 2018-19. The major source of renewable energy is large hydro projects. In 2017-18, nearly the amount of wind power added was 1,739.14 MW. By March 2022, an action plan has been framed by the Indian Government, the Ministry of New and Renewable Energy to achieve a total capacity of 60 GW of hydropower and 175 GW of other RES, including 100 GW of solar power, 60 GW of wind power, 10 GW of biomass power and 5 GW of small hydropower When market players have ample incentive to switch to a clean source, this has been one of the big drives for Indian business. By June 2018, the main aim of Government of India was to accomplish 225 GW of renewable energy capacity by 2022, which was ahead of its goal of 175 GW as set out in the Paris Agreement. Under the Union budget for 2018-19, Rs 3,762 crore (US$ 581.09 million) was billed for Grid-Interactive Renewable Energy Schemes and projects. Renewable Energy is ready to play a significant role, as India‟s energy demand is expected to hit 15,820 TWh by 2040. By 2030 renewable energies will be reliable to cater 40% of India's power requirements. Clean-energy reserves in India exceeded US$ 7.4 billion in the first half of 2018. India has huge potential in solar power generation. Solar energy is helping to light the households of millions of India‟s citizens who are poor in terms of energy. With the prospective to grow on a very huge scale, electricity generated through solar is one of the best few low-carbon technologies used. In the recent years, a rapid growth have been observed in installation of solar generating capacities. The major attractions for investment in solar systems are improvement in technologies, price and performance. With the addition of 5,525 MW solar power generation, India‟s solar capacity has crossed 12 GW. The Government of India (GoI) has formed various programs and initiatives which will help to extend the solar power at supported solar energy cost. Following are a number of the govt. initiatives adopted by the govt. for solar sector: (Exhibit 7)  Jawaharlal Nehru  Rooftop Scheme

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 Solar Park Scheme  VGF (Viability Gap Funding) Scheme  Government Yojana Solar Energy Subsidy Scheme  UDAY Scheme

2. MARKET PLAYERS

Table 1 COMPANY DETAILS It holds a place in top ten solar companies of India. Bangalore is home SYSTEMS Ltd. to the leading Indian solar company. It is the largest integrated solar company in India. In 1989, Tata Power Solar was set up as a Tata BP solar. The company produces solar cells, solar modules, and other solar products, and delivers solar power projects with EPC services. EMMVEE Power The company is specialized in the development of on-grid and off-grid Pvt Ltd– photovoltaic modules and systems. In its manufacturing facilities in Bengaluru, the solar company manufactures and develops high- performance solar systems using state-of - the-art machinery. Indosolar Ltd Indosolar is one among India's leading solar firms. Mr. Bhushan Kumar Gupta launched the company in 2008. He is also Phoenix Lamps Ltd's founder. The company is using manufacturing techniques of the world class. It offers local and international markets solar products. Indosolar Ltd. offers manufacturing techniques of the world class. Kotak Urja Pvt Ltd– Launched in Bangalore in 1997. It began with the aim of manufacturing solar water heaters and other advanced solar products which are being utilized in our daily lives. The company belongs to the 1927 founded KOTAK Group. It provides a wide range of services. Photon Energy Systems Ltd– In 1997-98, the company begun its operations. It received financial support from the Agency for Development of Indian Renewable Energy Ltd. It includes Solar Water Pumps, Solar Rooftop Power Plants, Solar Water Heating Systems, Solar Lanterns, Solar PV Modules, Megawatt Solar Power Plants, etc. It has a production unit module in Hyderabad. Waaree Energies Ltd It was established in 1989. Additionally to solar power, it offers various other solutions like industrial valves, process control instrumentation, and solar power. It's one among India's top solar companies. The corporate also made its presence worldwide. Ltd It is one among India's top ten solar companies. It is a leader in providing solar power solutions. Vikram Solar Pvt. Ltd offers comprehensive manufacturing of EPC solutions and modules. It also has marked its presence international. The corporate offers a good range of solar products. Rewa Ultra Mega Solar Ltd. The company was incorporated as a limited company on July 10, 2015. It is a joint venture between SECI and MPUVNL, with 50% of the share capital held by both the parties. RUMS Ltd's leadership enabled several innovations that made solar power a turning point. Moser Baer Solar Ltd (MBSL) It holds a place among India's prominent solar companies. It's Moser Baer India Ltd.‟s subsidiary. As mentioned within the website of the corporate, its total capacity in split technology is 250 MW. Websol Energy System Ltd. It is one among India's top solar companies. The corporate was launched in 1990. The corporate began with the vision of providing the answer to global energy needs. Websol Energy System Limited is one of India's top brands in the manufacture of crystalline photovoltaic solar cells and related modules. Established at Falta SEZ, Sector II, Falta, West Bengal, we have the best manufacturing unit to help us deliver the industry's best and up-to-date products.

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3. OVERVIEW OF THE COMPANY-RUMS RUMS Ltd. is the company responsible for two solar Parks located in Madhya Pradesh in,

 Rewa District  Mandsaur District The company was incorporated as a limited company on July 10, 2015. It is a joint venture between SECI and MPUVNL, with 50% of the share capital held by both the parties. The authorized capital of the company is US$ 1.5 million (INR 100 million). The partners of the joint venture released 0.15 million dollars (INR 10 million) against their share capital. In addition, the company receives subsidies that are routed periodically via SECI. The company received 0.56 million US$ (INR 37.5 million) from SECI for FY2015-16, up to 31 March 2016, according to the company's audited reports. RUMS Ltd's leadership enabled several innovations that made solar power a turning point.

3.1. RUMSL Board Shri Manu Srivastava, IAS, Chairperson, Rewa Ultra Mega Solar Limited. He is Madhya Pradesh Cadre's 1991 batch IAS officer. He held various responsibilities with both the Central and State Governments. He worked as Principal Secretary, New and Renewable Energy, Govt. of Madhya Pradesh, and MPUVNL's Managing Director. He is the person behind the successful implementation of the project that broke records by accomplishing low tariffs and brought a complete transformation within

Source: www.rumsl.com the solar energy Scene in India.

Shri C. Kannan, Director (Finance), Solar Energy Corporation of India Limited, has quite 31 years of experience chiefly in Power and Steel Sector as a Techno Commercial and Finance Professional. He played an important role in Power Grid‟s expansion, its financial planning and strategic growth.

Sour ce: www.rumsl.com Shri Remesh Kumar K., General Manager (Solar), Solar Energy Corporation of India Ltd., has more than 28 years of experience in the power industry. He has worked in various fields such as operation and maintenance of thermal power plants, construction of projects, project commissioning, assurance of field quality, project planning and monitoring. He joined SECI Ltd. as General Manager in March 2013. He currently heads the Solar Division, IT Division and Corporate Planning Division. In addition to developing several solar parks, he was fully involved in the implementation of National Solar Mission projects such as 750 MW, 2000 MW, 5000 MW, VGF Schemes, etc.

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4. INTRODUCTION TO THE PROJECT Rewa Ultra Mega Solar is a proposed solar power plant spread over an area of 1,590 acres (6.4 kms) in the Gurh teshil in Rewa, Madhya Pradesh, with a solar installed capacity of 750MW. RUMS Ltd. is a joint venture between Madhya Pradesh Urja Vikash Nigam Limited (MPUVNL) and Solar Energy Corporation of India (SECI). Completed in 2018, it has become one of the largest single site solar power plants in India and in the world. RUMSL was chosen by PGCIL to develop the construction of substation work. Internal infrastructure for the project was developed by the RUMS Ltd. RUMS Ltd. also developed the project site which allowed developers to set up the unit without worrying about the evacuation infrastructure. RUMS Ltd. adopted all the activities for establishing the ultra-mega solar project, including conceptualization, market consultations, financial and legal structuring and bid process management.

Figure 2

Table 2 Project Highlights Transmission System for Ultra Mega Solar Park in Rewa, Project Name Madhya Pradesh Location Western Region Beneficiary State Madhya Pradesh Project Cost Rs. 322.14 Crores as on December 2014 Price Level Commissioning Schedule March, 2017 Rewa Project has gained recognition in India and across the globe for its exclusive infrastructure and supplying the needs of various power off taker namely; Power Management Company, MP and Delhi Metro Rail Corporation. To assist removal of power from the project site to variety of customers, PGCIL has developed the 220/400 KV substation. Madhya Pradesh Power Management Company Limited (MPPMCL): MPPMCL has the holding of the three distributors in Madhya Pradesh state. The company is accountable for the three Distribution companies buying bulk electricity. MPPMCL will receive 75 per cent of Rewa Solar Power Plant power (Exhibit 1). Delhi Metro Rail Corporation (DMRC): DMRC, the Delhi Metro acted as a contributory in steering of a new generation in the promotion of urban transportation on a huge scale in the

http://iaeme.com/Home/journal/IJM 1230 [email protected] A Case Study on Planning of Rewa Ultra Mega Solar Power Project country. For the first time in the country, the high-quality and up-to-date Metro system presented spacious, air-conditioned and environmentally friendly services and thoroughly modernized the mass transportation scenario in the Nation‟s Capital as well as throughout the nation. DMRC is likely to receive 25 percent of the power created from the Rewa Solar Power plant and would provide aid to almost 90% of its daily requirements. The commencement of this project saved Rs. 4,600 crore to state DISCOMs and Rs. 1400 crore to Delhi Metro over the project life. The project passed through all the stages of the Project Life Cycle, including:

Project Project Financing Project Project Planning & Costing Implementation Termination

Figure 3

4.1. Project Planning Project planning is the first phase in project life cycle wherein the project scope and methods for completing the projects is determined. RUMSL very well planned all the activities and tasks to be carried out in order to start the solar park as per the decided schedule.

Table 3 Project Schedule Phases Description Site Location The project includes open scrub wastelands with small parcels of land located at an elevation of 370 - 400 m above mean sea level (amsl) between the site where agriculture is practiced. Site Settings The land for the proposed site consisted mainly of rocky land use of scrub / barren and is characterized by rural set-up. Most of the study area's land area is rock- strewn with limited agricultural potential due to irrigation fed by rain. The project area has an undulating slope with land parcels owned by local population on both the slope and plain areas. Power Evacuation It was proposed to evacuate the power from the Solar PV plant to the 220/400 KV Grid Sub-Station that will be built by PGCIL on 18 hectares of land from Barsaita Desh Village. The output voltage of the inverter would be 380V, which will be increased to 33kV and then to 220 kV. The power will be evacuated to 400 KV Vindhyachal–Jabalpur line owned by MPPMCL, Jabalpur located 30 km south of the site at an aerial distance. PGCIL was responsible for finalizing transmission poles alignment and construction from Grid Sub-Station to evacuation line3. Construction Phase All construction activities took place within the boundaries of the site except those activities related to the interconnections between the site and the common infrastructure carried out by the developers engaged outside the site's boundary wall. Developer was solely responsible for site clearing and site grading as required for the plant's construction, operation and maintenance. Operation Phase Approximately 3,75,000 liters / MW / day (500 liters / MW / day) of PV panel cleaning was estimated during the operational phase. The frequency of cleaning was ten (10) days, a rocky terrain that tends to be less dust-prone. Boreholes provided drinking water and process water and required domestic treatment. It has been estimated there is going to be about. 43-45 KL / day4 of the daily demand for domestic water. RUMSL officials also learned that District Collector had previously obtained permission to abstract groundwater. The workforce requirement for the project's operational phase was estimated at 20-30 employees including engineers, technicians, housekeeping, admin etc.

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Constant Interactions with Bidders and Lenders Huge market response was achieved during the bidding process with 20 bids, with developers offering 7500MW, which was 10 times more than the project capability of 750 MW. International bidders like Softbank (Japan), Engie (France), Enel (Italy), Canadian Solar, Solenergi (Singapore) participated in the state bidding process. Shortlisted bidders participated in a 33 hours non-stop bidding process. Mahindra Renewables, ACME Solar Holdings and Solengeri Power were the winning companies for project‟s three units at tariffs of Rs. 2.979, Rs. 2.970 and Rs. 2.974 for the principal year. For the solar projects of India, these were rock bottom tariff ever achieved through a bidding process(Exhibit 1).

Table 4 Bidders for the Project

Company Capacity Company Capacity ReNew Power 750MW Hero Future Energies 500MW Shapoorji Pallonji Infrstructure 250MW Acme Solar 250MW AMPL Clean tech 250MW Orange Renewables 250MW Torrent Power 250 MW GDF Suez () 250MW SBG Clean tech (Soft Bank) 750MW Mahindra Renewables 500MW Aditya Birla Renewables 250 MW Rattan India 250MW Green Infra (Sempcorp) 250 MW Narmada Hydel Dev. Corp. 250MW ACB (Sanik Group) 250 MW 250MW Enel Green Power 250 MW Rose petal Solar (Adani Group) 250MW Canadian Solar 250 MW Solenergi Power 250MW

Bidders who were willing to pay a visit to the project site were provided with full support and facilities. All the suggestions and concerns were discussed and studied in detail in pre bidding meetings. This process increased the confidence among the bidders. Such management of the process also grew confidence among Indian and Foreign companies in the project. RUMS was continuously in deliberations with the lenders of the bidders, conditional on their initiatives in the project, and also convincing them through the strengths of the project. RUMS also took care of lenders concerns for the project in order to get loan at higher rates to the respective bidder. The process helped bidders in arranging low-cost finance, because of the low-risk thought by the lenders. Full support of GoI was provided to the project. The project got approval from MNRE under its Solar Park Scheme and allocated the fund of INR 12 lakhs/MW. The Ministry of Power (MoP) permitted inter-state transmission of power exempt from charges and losses and also granted the status of Regional Generating Station to the project. The project provided a huge support to meet the clean energy targets of the country. This project led to avoiding of CO2 generation of 15.4 lac tonnes every year. This environment support was equal to planting 2.6 crore trees. The RUMS project was recommended by MNRE as a model project to all the other states. MNRE took into consideration the state initiatives as the recommended features of the project to the chief secretaries of all the other states. The innovations of the RUMS project are included in the draft of the national level bidding guidelines. The project is proof of commitment made by Madhya Pradesh to fulfill the promises made by India to the world community and to the next generation of developing 100 Gigawatt solar energy by 2022.

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Transparency A data room was created showcasing the contracts made by RUMS for evacuation process. The evidences in form of photographs regarding evacuation infrastructure were also displayed in order to grow confidence among the bidders that the power on the project would be released and also that the project will work continuously even after completion. Data room was updated with the khasra numbers of the land availability on regular basis. So, that the bidders can look at the increasing land availability by the day, 97% land was available at the time of auction.

4.2. Project Financing & Costing The developers of the project developed the project without any Viability Gap Funding (VGF), In order to keep the solar tariffs low this VGF was then used as a tool by large CPSU‟s. Until now, the lowest tariff of INR 4.34 was achieved by similar level of large-scale projects, with significant VGF (SECI bids) or subsidy (NTPC bids). The Rewa project enabled the government to change concentration from Viability Gap Funding through interventions such as 'payment security mechanism' to enable scalable models of pure market- based financing.

Payment Security Mechanism Considering Discoms performance, SPDs were dependent on the integrity of procurers such as SECI, NTPC, etc., or the payment structure suggested in the agreements. Regarding MPPMCL PPA, which was responsible for 75 percent of normal power offtake, Rewa Project issued letter of credit for 1 month's payment, along with payment protection fund along with the Madhya Pradesh State Guarantee for MPPMCL's delay in payments. The amount was equal to 1.25 times the average of 2 month‟s billing, as against the Letter of Credit provided by DMRC‟s PPA. A healthy payment decreases the risks that follow the project and increases the confidence of creditors / lenders for the project. It's difficult to measure the benefits accomplished with every 1 percent p.a. reduction. In interest rates the tariff fell to 10 paisa while other issues stayed unchanged.

Equity Infusion Usually there is a minimum equity infusion condition which obliges the developer under a certain cost structure. Also, share premium is not considered as a part of the equity, at the time of infusion, which increases developer‟s liability. However, RUMSL offered for no restriction or obligation in terms of equity infusion in the project on behalf of the developer. It is normal market exercise that the project finance lenders to large projects specify promises for equity infusion by sponsors/ developers. Full flexibility should be given to developers to frame the size and timing of their equity infusion in so far as they meet lender necessities, without which they would not achieve financial closing.

Solar Park Charges: World Bank & CTF Loan The solar park charges of Rewa were lower as compared to other most Solar Power Park Developers (SPPDs) in the country. This was possible because of the low cost of land at the project location and policies of the Government of Madhya Pradesh

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A sub-loan agreement for solar power projects were signed by Indian Renewable Energy Development (IREDA) and Rewa Ultra Mega Solar Ltd (RUMSL). MNRE, the World Bank and IREDA made a proposal to channelize funds for solar parks to achieve 100GW solar capacity target by 2022, and also for developing transmission and evacuation infrastructure loan amount of Rs. 216 crore with interest rate of 8.5% p.a. for entire loan tenure, with principal repayments upto 5 years and loan repayment period of up to 20 years was sanctioned. The World Bank provided a loan amount of 100 million$ through IREDA for the development of solar parks in India. Which includes 75 million$ loan from the International Bank for Reconstruction and Development (IBRD) and 23 million$ loan from Clean Technology Fund (CTF) with interest free CTF grant of 2 million$. IREDA is the project implementation unit for the loan. For this project, the internal evacuation infrastructure cost was low because of the MNRE grants under the Solar Park Scheme and mobilization of World Bank loan. Out of which 25% consists of concessional loan from Clean Technology Fund, which was available at interest rate of 0.25%. Rewa is the only solar park to take loan from the World Bank as well as CTF. The objective of taking World Bank loan was to reduce tariff by approximately 5 paisa/kWh.

Operation and Maintenance Charges Operations and Maintenance charges pose extra burden on developers and it varies hugely across the solar parks. The costs compared with the service given are much higher. RUMSL gave the entire internal evacuation infrastructure to the SPD without any extra costs and, gave SPDs the right for managing its own costs. The solar park developers experienced additional Operations and Maintenance cost, other than the Operations and Maintenance being carried by the SPDs. The increased cost pressure on developers and the added expense contributed to higher tariffs. Every addition of Rs.1 lakh/MW in Operations and Maintenance with increase of 5% p.a. resulted into 10 paisa/kWh. Some solar parks charge heavily between 6%p.a.-10%p.a. Every increase of 1%p.a. in Operations and Maintenance had an impact of 4 paisa/kWh.

Performance Bank Guarantee Strict deadlines for milestones like financial completion and implementation of projects have resulted in SPDs including the fines in their cost. Under RUMSL PPAs, the encashed Performance Bank Guarantees were considered as cash preservation and after the particular milestones were achieved this cash preservation were returned to the SPD. However, there was no clearness in delay divisions in accomplishing milestones, this resulted in former PBG being encashed into COD, and no provision was made for returning the amount even if the particular milestones were achieved. Since the goal was to finish the projects on the decided timeline for everyone and the tendering authority wanted the developers to finish the projects on the decided timeline, it was reasonable to enforce some fines. Nevertheless, after the final goal was achieved without postponement, the papers evidently showed how the penalties were charged and handled. The purpose of SPPD was to ensure that the project was completed in the given timeline. This will also inspire developers to complete the project quickly because they have already paid a fine.

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4.3. Project Implementation Changes in Law-GST With the GST Law and incorporating its impact, the significance of this clause came into being in the immediate term. While developers were expected to accurately identify the main regulatory / tax scenario and were able to do so, it became challenging for them to predict the effect of any law / tax rate changes, this led developers to keep a tariff safeguard to regulate equity returns among such uncertainty. The developers sought accuracy and ease in searching for the effect of any modification in law, and tended to replicate the equivalent uncertainity in the planned tariff. While it was clear that during the project's life cycle GST would become a reality, but GST levels were not understood depending on their risk understanding, developers would fluctuate between 60 paisa / kWh and 75 paisa / kWh, respectively. MNRE studies on GST have indicated an effect between 12 and 16 per cent on Solar-PV (Grid) projects. RUMSL covered the influence of change in law on both the elements of project costs as well as revenue. In the Change in Law clause of the RUMSL PPA, there was comparatively more clarification that allowed developers to mark the tariff with existing tax laws in mind, rather than being simply mandatory to affect any unpredictable tax changes. The effect of this on the bidders' tariff may be as high as 45 paisa / kWh depending on the coming into force of the GST back then during the project construction and the rate of GST applied to the solar panels and other cost elements.

Commissioning Timelines Timelines commissioning, with no simplicity on the attentiveness of the pre-project, increased the uncertainty in the developer's minds given the enormous scale of projects that had yet to be carried out. The SPD was intended to incorporate the effect of the penalties imposed in the event that the timelines could not be met, even for events beyond its control, such as land that the SPPD provided late or delayed in progressing of evacuation system. In Rewa's case, day zero of their duties and responsibilities began with 90% of the land being transferred to the SPD, calming both lenders and developers. Usually tenders have timelines for commissioning, irrespective of project scale and solar park preparation, which was very strict and burdened the developer with increased risk factor mitigation. Similarly, land acquisition / connectivity became a major concern for developers with growing solar installations for non - solar park tenders. The majority of developers faced problems in timely completion of the projects. Construction timelines needed to be associated with the land hand over for solar park tenders.

Evacuation Infrastructure The certainty about the accessibility of the evacuation infrastructure in the given timelines tends to reassure SPDs. Or else, it has become difficult for developers to plan their project, as the other infrastructure development schedule becomes challenging enough to manage or match. RUMSL tender documents had been drafted to reduce that uncertainty. Initially, the ISA and Coordination Agreements were signed and the protocol for joint working and joint meetings was emphasised. It also provided the tool for regularly scheduled monthly review meetings, and sharing work progress / schedules. While parallel activities were taking place in

http://iaeme.com/Home/journal/IJM 1235 [email protected] Kesha Patel and Govind B. Dave other solar parks, recognizing them at the bid stage offered the developers, especially the foreign participants, greater comfort. Additionally, RUMSL tender documents naturally offered a minimum daily extension if projects and activities to be conducted by RUMSL have been postponed. The documents also provided flexibility for developers to overtake the design of the internal evacuation system in occasion the developers had concerns about the same evolution. In general, SPD had to rely on the timelines of the evacuation system built by the external agency to be taken care of by the solar power park developers. In addition, the documents did not elucidate the extended regulations to justify delays in the transfer of land or internal evacuation. Besides Rewa Solar Park, all future solar parks would require a Performance Bank Guarantee of Rs 3 Lac / MW from the prosperous developers. It was noticeable that the obligation to provide services lied with the SPPD and SPPD lied to the developer, the developers send the Performance Bank Guarantee. It is an avoidable expense that developers had to budget and if eliminated, tariffs could have been reduced by ~0.5 paisa / kWh as well. In short, the SPPD's evidently identified role / responsibilities and removal of unwanted costs, increased developers ' confidence and had a positive impact on tariffs.

4.4. Project Termination Clarifications concerning the early termination of the contract arising from the default of any party were a required calming aspect for project developers and also the financiers to effectively safeguard their investments. If by default there is a case of termination by any organization, RUMSL offered an alternative for reasonable termination compensation to the effecting party, hence freeing itself from the consequences of debt unpaid and equity investment insurance cover. Such establishment was made for the first time in the Indian renewable energy sector in the case of the Rewa project, and is being implemented today in the entire country. The above effects are a possible changing direction for solar power in the country, based on the Indian government's policies and expanding them further through developments that open up new opportunities. The astonishing low tariff of INR 2.97 has been accomplished without any VGF for developers, however alike large-scale projects have attained the lowest tariff so far of INR 4.34, with substantial Viability Gap Funding (SECI bids) or subsidy (NTPC bids). This allowed the Indian Government to move attention to permitting scalable models of pure market based financing by interpositions such as „payment security mechanism‟ rather than viability gap funding.

5. PROJECT INNOVATIONS One of Rewa Project's many developments was the creation of the Payment Protection Fund, entirely based on market principles with IREDA and without receiving any financial allocation in the budget from the Indian Government which was otherwise provided to other projects. Supplying power to an inter-state open access consumer, Rewa becomes the first solar project in India for the same. One of the project‟s customers Delhi Metro Railway Corporation (DMRC) purchased almost 24% of the project‟s electricity generated on a normal basis. The power supply in power projects is distributed uniformly to all the off-takers. In a solar project solar creation differs based on solar incidence. As a result, a solar project's power

http://iaeme.com/Home/journal/IJM 1236 [email protected] A Case Study on Planning of Rewa Ultra Mega Solar Power Project supply to off-takers varied over time and a proportionate supply system was not able to meet the requirement of DMRC. As a result, RUMS came up with an optimal scheduling plan developed out of the first ideologies to look after DMRC‟s day-time power requisite. The power generated from the project was provided to DMRC until all of their intake requirements were fulfilled and the remaining balance power would be provided to the state. This arrangement of supply by RUMS would allow DMRC to fulfill almost 90% of their daily intake from Rewa. Considering Delhi Metro‟s assurance to green energy, DMRC benefits from Discoms at over Rs. 6/unit, is above Rs. 100 crore annually (Exhibit 2).

6. SPECIAL FEATURES The development of internal evacuation infrastructure of the plant was undertaken with funds from CTF and World Bank. This empowered the project to have very low solar park charges, which was one of the special features behind the low tariff accomplished in the project. The internal evacuation infrastructure was developed with support from MP Transco. PGCIL developed a 220/400 kV Inter-state transmission system for the project, which was without any expenditure to RUMS or the state of Madhya Pradesh. The main reason for low and better tariff was the optimum distribution of the risk between procurers, developers and RUMS. Mostly in the contracts structured by the government for government contracting, it is designed in such a way that the government tolerates minimum risks and all the remaining uncertainties are passed on to the suppliers/developers, who are equally liable to load the same on the cost. In case of Rewa, the project structuring was done as per the global standards. After taking into consideration the impacts on tariff and optimum distribution of risks between procurers, Solar Project Developers, and the Solar Power Park Developers several features of the Rewa Project were designed. By working comprehensively with the final procurers, the transaction structure with expert inputs from reputed transaction advisors were developed, to meet the challenge of absence of Viability Gap Funding (VGF). International Finance Corporation (IFC) part of the World Bank Group provided an extremely knowledgeable transaction advisory support for the project. The project received World Bank Group‟s President‟s Award for innovation and excellence. The project was involved in the Prime Minister‟s “A Book of Innovation: New Beginnings”. The Project has been prized in Global Infrastructure Facility, created by the World Bank, for its optimum distribution of risks and has been held as a model project for attracting investment from multilateral banks, institutional investors, etc. into evolving economies.

7. PROBLEMS ENCOUNTERED AND SOLUTIONS Madhya Pradesh state had never handled such mega projects before. Such mega projects were handled by SECI & NTPC. The credit rating of one of the biggest buyers of the project, MPPMCL, was an issue which was solved through state guarantee. At the beginning of the project, it was difficult to win the trust of the developers by bringing a high credit entity like DMRC as an off taker, which was a complex issue to solve. Nobody ever attempted to provide inter-state power supply to any open access customer like Delhi Metro. There was an additional challenge of variation in DMRC‟s daily power demand through the day, as the demand also reduced during weekends and holidays. There was only

http://iaeme.com/Home/journal/IJM 1237 [email protected] Kesha Patel and Govind B. Dave one way that would help in meeting DMRC‟s varying high demands, it was that if Long Term Open Access (LTOA)[2] from WR to NR were kept high, say it to be 150MW. If LTOA of 600MW was implied in place of LTOA of WR-NR 150MW, during the period of low demand of DMRC as such of 60 MW and the high power production of the plant such as 740MW, the remaining power would be of 680MW from the project, however the state‟s capacity would be limited by LTOA of 600MW only. After evaluating all of the above options, it was decided the LTOA of WR-NR would be kept at 99MW and for the state the LTOA would be 651MW. Highlighting the difference between power contract, where LTOA and energy ratios would be the same and the way Rewa contracts are structured, with LTOA ration of 13% and energy ratio of 24% for DMRC, with the help of optimum scheduling, the power supply to DMRC on normal basis would be 24% and to Madhya Pradesh state would be 76%. The growing insecurities of the developers and specifically the international bidders regarding the procurement of land. However, on the day of the auction 97% of the land was ready. In order to grow confidence among the bidders that there is not any risk in their project being developed without any evacuation facility, regular update of the land being procured were displayed in the data room, along with the photographs of the infrastructure, both internal construction by RUMS and external by PGCIL.

8. CONCLUSION Rewa Solar Power Project started the power supply from 6th July, 2018. With an exceptionally low rate of Rs. 2.97 the project provided environmental friendly power to the state, which was marked to be less than its average power procurement cost. In the first year along with an increase provision of Rs.0.05 per year for the coming 15 years which levelised the tariff to Rs.3.30/unit, were set on the tariff of Rs. 2.97/unit. The final tariff of Rs.1.04 is low as compared to the prior lowest tariff of Rs. 4.34/unit bid a year back, for NTPC‟s Project in Rajasthan and Rs. 9 cheaper than the average tariff cited in the JNNSM Batch I bidding in 2010 (Exhibit 3). However there were certain speculations recently regarding the increase in tariff of DMRC because it had to buy power from Rewa Solar Park at Rs.4.21 instead of Rs. 3.30 (Exhibit 4). However, it was found that the reason of Delhi Metro‟s tariff is the additional inter-state transmission and Rewa Solar Park need not to be blamed. However, the decision for the same is pending.

Exhibit 1

Figure 4

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Exhibit 2

Figure 5

Exhibit 3

Table 5

Exhibit 4

Figure 6

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Exhibit 5

Figure 7

Exhibit 6

Figure 8

EXHIBIT 7 Types of Renewable Energy

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Exhibit 8 Government Initiatives for Solar Sector 1. Jawaharlal Nehru National Solar Mission It aims at reducing the solar power generation cost also in addition to install 20,00MW of grid-connected solar power via-  Long-Term Policy  Large Scale deployment goals  Research and Development  Domestic Production of Raw Materials. 2. Rooftop Scheme The scheme executed by SECI (Solar Energy Corporation of India) has 200 MW of projects being assigned, out of which 45 MW of capacity have been appointed. And also, under this scheme several additional schemes like 73MW for warehouses and 50 MW for the CPWD (Central Public Works Department) have been brought in practice. A tender which is a part of MNRE‟s (Ministry of New and Renewable Energy) initiative launched by SECI offers 30% subsidy to residential sector, not for profit organizations, social sector and health care institutions to gain momentum in achieving target of 40GW of rooftop solar power generation by 2022. 3. Solar Park Scheme MNRE introduced a scheme to build various solar parks across the states in India, where each park will have a capacity of 500MW. The scheme offers to provide financial support by GoI to support the construction of infrastructure that would be required for establishing the solar power projects, in context of allocation of land, transmission of equipmens and materials, accessibility to roads, availability of water, etc. The solar parks would be developed with the collaboration with the state government. On behalf of the Government of India SECI would be working as an implementing agency. 4. VGF (Viability Gap Funding) Scheme Under VGF scheme, SECI has made multiple project allocations. Out of the first 750MW allocated and executed 680MW capacity has been installed and appointed. On Build, Own, Operate basis the VGF support will be provided for setting up grid connected solar plants having a minimum capacity of 2000MW by solar developers. 5. Government Yojana Solar Energy Subsidy Scheme Financial assistance and capital subsidy will be provided up to 50%, 70% and 90% depending on the basic cost of solar energy plant, under this scheme. This scheme is formed to encourage the utilization of solar energy. The scheme plans to eradicate the electricity problem and the use of solar energy to grow the textile business. The scheme will help in cutting down the electricity bills and the load on thermal power plants, thus increasing power generation through solar energy. 6. UDAY Scheme This scheme formulated by GoI is optional for the State Governments to join. As per the scheme, the state government will take up to 75% of the debt through issuing of sovereign bonds to be paid back to the lenders, and the remaining 25% will be sanctioned in the form of bonds.

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Exhibit 9

Table 6 State Wise Power Generated from Solar Plants in India (2012-13 to 2018-19) (In Millions) States/UTs 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019- upto June, 2018 Andaman and Nicobar - - - 6.26 6.17 6.88 1.51 Islands Andhra Pradesh 108.84 207.11 159.77 282.67 1599.78 3658.97 1139.93 Arunachal Pradesh - - - 0.22 0.14 0.23 0.28 Assam 0.00 0.00 9.65 31.60 2.69 8.36 1.56 Bihar - - - 6.39 109.18 145.34 37.12 Chandigarh 0.00 0.00 2.23 3.40 13.16 7.87 5.01 Chhattisgarh 2.49 11.42 12.65 52.70 120.91 136.54 92.05 Dadra and Nagar 0.00 0.00 0.03 0.50 1.31 5.23 1.52 Haveli Daman and Diu 0.00 0.00 0.15 4.25 14.43 18.53 5.20 Delhi 3.68 3.29 3.18 4.11 5.68 13.41 3.81 Goa/NTPC Rajgar 0.00 0.00 62.94 81.00 - - Gujarat 1145.52 1369.39 1474.56 1497.60 1738.28 2048.40 610.70 Haryana 0.00 0.00 10.36 114.96 19.70 64.65 18.44 Himachal Pradesh - - - 0.00 0.00 0.00 0.00 Jammu and Kashmir - - - 0.00 0.77 0.00 0.00 Jharkhand 6.81 0.00 8.32 19.77 38.47 19.47 4.97 Karnataka 16.27 38.25 100.39 187.69 524.67 2391.73 1590.30 Kerala 0.00 0.00 0.00 7.38 26.52 55.35 16.21 Lakshadweep 0.00 0.00 4.90 1.02 1.59 1.79 0.37 Madhya Pradesh 10.82 247.05 562.29 1105.28 1366.10 1911.70 625.12 Maharashtra 28.61 257.42 349.32 638.76 577.83 1100.67 529.69 Manipur - - - 0.00 0.01 0.15 0.12 Meghalaya - - - 0.00 0.00 0.00 0.00 Mizoram - - - 0.00 0.00 0.00 0.00 Nagaland - - - 0.00 0.00 0.00 0.00 Odisha 17.98 34.28 44.94 150.73 210.81 204.77 59.94 Puducherry 0* 2.45* 15.62* 16.02* 0.34 1.17 0.51 Punjab 1.29 51.69 129.89 380.57 909.20 1432.07 465.22 Rajasthan 266.34 1052.23 1259.19 1766.10 2131.61 3469.25 1040.89 Sikkim - - - 0.00 0.00 0.00 0.00 Tamil Nadu 25.88 38.87 158.75 507.18 1898.34 2906.01 834.41 Telangana 0.00 0.00 138.13 402.51 1337.90 4013.80 1628.75 Tripura - - - 0.00 0.00 0.00 0.00 Uttar Pradesh 14.11 14.96 20.13 89.75 230.95 637.02 304.99 Uttarakhand 0.00 5.55 11.63 5.87 37.77 291.08 92.03 West Bengal 0.00 0.00 7.58 6.28 14.96 20.47 9.41 DVC - - - 0.00 0.01 0.06 0.02 NEEPCO 0.00 0.00 0.98 6.15 6.89 6.71 1.70 NTPC (Rajgarh) - - - 81.00 82.21 340.13 139.15 NTPC Andman/Talchar 0.00 6.51 18.79 18.91 20.00 20.43 5.27 NTPC Dadri + FBD + 0.00 6.10 22.90 42.41 74.90 480.99 129.19 Unchahar/Singrauli NTPC Ramagundam - - - 16.02 350.53 426.37 112.03 Oil India Ltd. 0.00 0.00 9.09 9.90 25.59 25.46 6.56 India 1648.63 3346.57 4589.27 7447.94 13499.41 25871.07 9513.98

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Exhibit 10 Abbreviations MW- Mega Watts GW- Giga Watts TWh- Tera Watt Hour FDI- Foreign Direct Investment SECI- Solar Energy Corporation of India CPWP- Central Public Works Department MNRE- Ministry of New and Renewable Energy MPUVNL- Madhya Pradesh Urja Vikash Nigam Limited RUMSL- Rewa Ultra Mega Solar Limited PGCIL- Power Grid Corporation of India Limited MPPMCL- Madhya Pradesh Power Management Company Limited SPD- Solar Project Developers NTPC- National Thermal Power Corporation Limited DMRC- Delhi Metro Rail Corporation PPA- Power Purchase Agreement CTF- Clean Technology Fund IBRD- International Bank for Reconstruction and Development GST- Goods and Services Tax SPPD- Solar Power Park Developers IREDA- Indian Renewable Energy Development LTOA- Long Term Open Access JNNSM- Jawaharlal Nehru National Solar Mission

KEYNOTES 1. Energy that's collected from renewable resources that are naturally restored on a person's duration, like sunlight, wind, rain, tides, waves, and heat. 2. Open Access enables heavy users with more than 1 MW connected load to buy cheap power from the open market. Once the consumers are given the choice to purchase power from the open market, it will lead to competitive pricing of electricity making its cost go down. LTOA is purchase rights under inter-state open access for 12-25 years.

REFERENCES

[1] www.rumsl.com

[2] https://amplussolar.com/blogs/the-top-government-programes-in-the-solar-sector

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[3] https://www.zaubacorp.com/company/REWA-ULTRA-MEGA-SOLAR- LIMITED/U40102MP2015PLC034450

[4] http://www.energynext.in/2017/05/rewa-a-case-study/

[5] https://www.business-standard.com/article/pti-stories/rewa-mega-solar-project-starts- supplying-power-118070600866_1.html

[6] https://solardae.com/sundae/glorification-criticism-solar-energy/

[7] https://www.intersolar.in/en/news-press/news/industry-news/rewards-of-harvesting-the-sun- the-rewa-way.html

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