750 MW Rewa Ultra Mega Solar Power Plant Manu Srivastava Why 750 MW REWA project makes for a pertinent case to study ? India Achieved Grid Parity with Rewa Project. Project became the tipping point for solar power in India due to its innovative structuring. Solar Power Tariffs showed a historical decline from 7 US ¢/unit to 4.5 US ¢ /unit The Project has been acknowledged as a model project by Government of India. Many of its features have been included in the Standard Bidding Guidelines for solar projects of Government of India. Madhya Pradesh decides to do their own thing • Rs 5 with VGF vs Rs 5.05 without VGF by MP • 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; Formation of RUMSL: A Joint Venture Company • 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) Previous Solar Bids Results SECI State and Project Project Fixed Tariff Lowest VGF Capacity (Rs./kWh) (MW) Uttar Pradesh - UP Solar Park 440 Rs. 4.43/kWh VGF – Rs. 74.99 lakhs/MW (DCR) Andhra Pradesh - Anantapuramu Solar 500 Rs. 4.43/kWh VGF – Rs. 44.50 lakhs/MW Park 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 NTPC 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 Rewa Results Unit Winner 1st Year Tariff 1 Mahindra Susten 2.979 2 Acme 2.970 3 Solenergi 2.974 Levelized Tariff: Rs 3.30 OFF TAKERS First Solar Project in India having different Categories of Off-takers: Madhya Pradesh Power Management Company Limited and Discoms (Licensed Utilities) Benefit to MPPMCL over 25 years (NPV basis, considering their current lowest solar power procurement): Rs. 2,086 Crores Delhi Metro Rail Corporation (Open Access Consumer) Benefit to DMRC over 25 years (NPV basis, considering their current procurement from Discoms): Rs. 1,220 Crores 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 Enel Green Power Development S.R.L. (Italy) Aditya Birla Renewables Green Infra Wind Energy Ltd. (Sembcorp, Singapore) 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 Rewa project in media Rewa project in media Rewa project in media Rewa project in media Rewa project in media Rewa project in media Rewa project in media Rewa project in media Rewa project in media Enhancements that made low tariff possible without viability gap funding Addressed critical risks • Offtake upfront • Evacuation • Land Leveraged Govt. support • Strong project structure to lower cost of capital • Internationally bankable PPAs & Project Agreements • Single comprehensive charge structure Low Land & Infra Charges • Lowest charge across solar parks • Proactive consultations to address project specific Carefully managed risks transaction process • Reputed Transaction Advisers: IFC Footer Key Learnings 1.Diverse category of consumers . Distribution licensee under obligation to procure power from renewable energy sources as mandated by the regulatory framework . Large institutional consumer (Delhi Metro Rail) looking to reduce energy costs 2. Energy contracts tailored to meet consumer demand pattern . Guarantee energy offtake quantity coincident with the demand profile of the consumer (institutional customer) . Supplier protected against non-availability or partial availability of power evacuation system beyond the Delivery Point 3. Addressing critical risk upfront resulting in Low park and Infrastructure charges . Timely acquisition of project land . Single comprehensive charge structure . Access to low cost funding from Clean Technology Fund to develop evacuation infrastructure 4. Equitable distribution of risk among procurer and developer . Developer to submit an unconditional, irrevocable and on-demand Performance Bank Guarantee on commissioning . Penalty on procurer for failure to offtake guaranteed energy quantity Scheduling Power procurement through Optimum 100 200 300 400 500 600 700 800 0 6:00 the each of blocks time demand for DMRC 6:15 6:30 6:45 Total DMRC ConsumptionDMRC Total 7:00 7:15 7:30 solar ParkMW for750Generation Time block wise a day Optimum Scheduling for explained 7:45 8:00 8:15 8:30 8:45 9:00 9:15 9:30 9:45 10:00 Total Generation for 750 MW 750 for GenerationTotal 10:15 10:30 10:45 11:00 11:15 11:30 11:45 12:00 12:15 12:30 12:45 13:00 13:15 13:30 13:45 Generation in conventional (99 MW) (99 conventionalin Generation 14:00 14:15 14:30 scheduling conventionalpower casein of of99Generation MWSolar 14:45 15:00 15:15 15:30 15:45 16:00 16:15 16:30 16:45 17:00 17:15 LTOA MW DMRC 99 17:30 17:45 Power procurement through Optimum Scheduling Optimum through procurement Power 100 200 300 400 500 600 700 800 0 DMRC Drawal DMRC 6:00 scheduled DMRC to Energy Allgenerated 6:15 6:30 6:45 MW 99 limit or consumption DMRC beyond MPPMCL scheduledEnergy to 7:00 7:15 7:30 MPPMCL Drawal MPPMCL 7:45 Time block wise a day Optimum Scheduling for explained 8:00 8:15 8:30 8:45 9:00 9:15 Total DMRC ConsumptionDMRC Total 9:30 9:45 10:00 10:15 10:30 10:45 11:00 11:15 11:30 11:45 Total Generation for 750 MW 750 for GenerationTotal 12:00 12:15 12:30 12:45 13:00 13:15 13:30 13:45 14:00 14:15 14:30 Generation in conventional (99 MW) (99 conventionalin Generation 14:45 15:00 15:15 15:30 15:45 16:00 DMRC to generated scheduled all Energy Again 16:15 16:30 16:45 17:00 17:15 LTOA MW DMRC 99 17:30 17:45 Savings for DMRC through Optimum Scheduling Optimum Scheduling Regular Scheduling DMRC LTA Capacity (MW) 99 164 PoC Charges* (₹/MW/Month) 204838 204838 Energy offtake (in MU) 345 345 CUF (in percent) 24 24 Total annual PoC charges 24.33 40.312 (in ₹ crore) LTA charges (₹/kWh) 0.705 1.168 Savings 15 crores/year or ₹ 0.46/kWh • POC Charges (as per CERC Order dated Feb 2018)* Rs./MW/Month 204838 ; • POC charges would be different for different quarter, it’s a variable number. Therefore, saving might vary from quarter to quarter Payment Security Mechanism for RUMSL Three layer of protection provided to SPDs under this mechanism Letter of Credit (LC) Payment Security Fund GOMP Guarantee As per Clause 10.6 (A) of PPA As per Clause 10.6 (B) of PPA As per Clause 10.6 (C) of PPA • Procurer shall set up and maintain a • RUMSL, on behalf of the SPDs will set up a • As a final layer of protection GoMP monthly unconditional, revolving and payment security fund with a corpus of INR guarantees the due and punctual irrevocable letter of credit (LC) in favour 480,000,000 (four hundred and eighty million) or payment of any undisputed amount, of the SPD. an overdraft or guarantee facility of the same which are directly payable by the size. Procurer and due to the SPD and/or • The LC shall have a term of 12 months RUMSL. and subsequently renewed for next 12 • The payment security envisages to cover • RUMSL can invoke GOMP guarantee if months. payment of the monthly bills and/or any outstanding dues raised by it supplementary bills to be made to the SPDs. remain unpaid for 30 days. Payment Security Mechanism Strictly private and confidential 2 May 2017 Draft 4 Geographic location of Solar Parks 550 MW Agar 500 MW Shajapur 450 MW Neemuch Proposed Transaction structure of New Solar Park (Optimal Scheduling) “Maximizing energy supply from solar park to meet consumer energy demand using Optimal Scheduling approach from CTU interface with support from MPPMCL” Sale of solar power from the New Solar Project Developer (1,500 MW) – CTU Solar Park to MPPMCL and Connection Indian Railways Supply to Indian Railways - 203 MW (778 MUs) PPA (Indian PPA (MPPMCL) Railways) Sale to MPPMCL – 1,297 MW (2244 MUs generation to Solar – 1,297 MW, Solar – 203 MW, 778 MUs MPPMCL) 2244 MUs Power Sale to Solar park connected to CTU Indian Railways (outside MP) Consumption in MP Thank You! .