Asia ESCO Conference 2010 Accelerating ESCO Movement in Utility - - PowerPoint PPT Presentation

Asia ESCO Conference 2010

Accelerating ESCO Movement in Utility Demand Side Management Programs

Gaurav Bhatiani Principal Energy Specialist, USAID Rakesh K Goyal Chief of Party, PA Consulting Panel 1:ESCO Strategies, Policy and Program

January 14, 2010

Page 2

00781-9

An Emerging Crisis in Water & Power

• 90% of ground water is used in agriculture
• India a topper in ground water use
• There is no water usage policy
• Water rights are passed with the rights of land
• Groundwater levels are falling by 3 - 10 feet/ year

50 100 150 200 250 300 1940 1950 1960 1970 1980 1990 2000 2010 US

• W. Europe

Spain Mexico China India Pakistan Bangladesh Sri Lanka Vietnam Ghana S Africa Tunisia

Water is a Global Crisis, but the scale of groundwater use in India is unique

Source: Shah, T, International Water Management Institute, (2005)

Page 3

00781-9

Importance of Efficiency in Agriculture Sector

Agriculture consumes 23% of power at national level and in many states it accounts for 40% of power. At national level, agriculture uses 38% of water (90% groundwater) 55 – 60% population dependent on groundwater

Financial health of power sector Availability of water both for irrigation and drinking Livelihood

• f farmers

Demand supply gap in power sector Govt subsidy

• f Rs. 30,000

Crore per annum

Page 4

00781-9

Power Savings Potential

S.N. Measures Potential for Savings 1 Efficient Pumpset 25-40% 2 Suction Pipe & Foot Valve 5-15% 3 Efficient Irrigation Methods 15-25% 4 Total Saving Potential 45-80%

Page 5

00781-9

Location: Doddaballapur (BESCOM) Geographical area 11,000 acres

• No. of villages/population

29/17,000 % net sown area 75% % irrigated area 16% Major crops Mulberry & grapes Depth to ground water 200-400 ft

• No. of feeders/pumpsets

4/700 Typical pumpset capacity 5-10 HP

ESCO Based Solution Demonstrated

First Ever ESCO deal in Agricultural Demand Side Management on a performance contract basis Public-Private Partnership with a 10 year agreement

Project Name Water Energy Nexus (WENEXA) Supported By USAID Implemented by PA Consulting DISCOM Bangalore Electricity Supply Company (BESCOM) ESCO Selected Enzen Global Solutions, Bangalore Project Site Doddabalapur, 60 KM from Bangalore city

Page 6

00781-9

Location: Doddaballapur (BESCOM) Geographical area 11,000 acres

• No. of villages/population

29/17,000 % net sown area 75% % irrigated area 16% Major crops Mulberry & grapes Depth to ground water 200-400 ft

• No. of feeders/pumpsets

4/700 Typical pumpset capacity 5-10 HP

ESCO Based Solution Demonstrated

First Ever ESCO deal in Agricultural Demand Side Management on a performance contract basis Public-Private Partnership with a 10 year agreement

Page 7

00781-9

Innovation Developed

Market based approach Risk Mitigation W i n

• w

i n s i t u a t i

• n

Innovation

 Farmers - get NHEP, after-sales services, good quality power & required amount of water  Utility – energy savings with greater opportunity cost 46%  ESCO – profit from saving energy, payback in three years  Project based on commercial principles  Long term horizon – no ‘snap back’ effect  Project risks shared among stakeholders and ESCO  Rules of public procurement followed  Active engagement

• f all stakeholders

 Extensive groundwork – studies, information – reduce perceived project risks

Page 8

00781-9

8

 BESCOM provided all the preconditions for the project – HVDS installed. – One Distribution Transformer for each pump. – Meters on all Distribution transformer – NGO working and educating farmers for four years – Detailed data available on pumps and pump efficiency – BESCOM obtained in principle agreement from KERC & the Government

• f Karnataka to proceed on a pilot program

 Farmers get a new branded energy efficient pumpset free with a 18 month warranty.  ESCO to implement the pumpset replacement as a part of the Ag DSM program – ESCO finances the investment required – Provides ongoing O&M support to farmers and establishes a site office  ESCO recoups investments through sharing of the energy served

Solution Demonstrated: Key Features

Page 9

00781-9

The Process Followed

>>>

Electrical network up gradation Risk Mitigation Bid process Selection

• f ESCO

Capacity building Project execution Agreements M&V Protocol Keeping stakeholders informed Farmers DISCOM employees ESCO Bid evaluation Presentation by bidders Financial evaluation Award Draft RFP and marketing Pre NIT Pre- bid meeting Site visit Data collection Mining Presentation Preparing business model HVDS Capacitor banks and electronic meters 2005-2008 2008- 2009 2009 ONGOING 2009 Electricity savings

Page 10

00781-9

ATC Loss at BESCOM's Pilot Site

46.5 32.3 39.3 39.2 36.6 41.8 41.4 30.0 28.8 29.7 36.9 34.2 26.9 30.7 29.1 27.5 31.6 32.6 34.3 35.8 35.7 38.9 20.8 29.5 29.2 26.7 30.9 29.9 37.4 29.9 30.3 27.7 36.5 33.5 32.3 27.8 23.8 29.9 25.3 29.4 24.8 25.2 34.3 21.9 19.0 19.7 17.8 17.0 16.2 17.0 16.0 16.0

10.0 20.0 30.0 40.0 50.0 Jul'05 Aug'05 Sep'05 Oct'05 Nov'05 Dec'05 Jan'06 Feb'06 Mar'06 Apr'06 May'06 Jun'06 Jul'06 Aug'06 Sep'06 Oct'06 Nov'06 Dec'06 Jan'07 Feb'07 Mar'07 Apr'07 May'07 Jun'07 July'07 Aug'07 Sept'07 Oct'07 Nov'07 Dec'07 Jan'08 Feb'08 Mar'08 April'08 May'08 Jun'08 Jul'08 Aug'08 Sept'08 Oct'08 Nov'08 Dec'08 Jan'09 Feb'09 Mar'09 Apr'09 May'09 June'09 Jul-09 Aug-09 Sep-09 Oct-09 Month % Loss % Loss Target Linear (% Loss)

Target - 12%

Trend line

Actual

Network Upgradation: HVDS and Metering

Page 11

00781-9

ATC Loss at BESCOM's Pilot Site

46.5 32.3 39.3 39.2 36.6 41.8 41.4 30.0 28.8 29.7 36.9 34.2 26.9 30.7 29.1 27.5 31.6 32.6 34.3 35.8 35.7 38.9 20.8 29.5 29.2 26.7 30.9 29.9 37.4 29.9 30.3 27.7 36.5 33.5 32.3 27.8 23.8 29.9 25.3 29.4 24.8 25.2 34.3 21.9 19.0 19.7 17.8 17.0 16.2 17.0 16.0 16.0

10.0 20.0 30.0 40.0 50.0 J u l ' 5 A u g ' 5 S e p ' 5 O c t ' 5 N

• v

' 5 D e c ' 5 J a n ' 6 F e b ' 6 M a r ' 6 A p r ' 6 M a y ' 6 J u n ' 6 J u l ' 6 A u g ' 6 S e p ' 6 O c t ' 6 N

• v

' 6 D e c ' 6 J a n ' 7 F e b ' 7 M a r ' 7 A p r ' 7 M a y ' 7 J u n ' 7 J u l y ' 7 A u g ' 7 S e p t ' 7 O c t ' 7 N

• v

' 7 D e c ' 7 J a n ' 8 F e b ' 8 M a r ' 8 A p r i l ' 8 M a y ' 8 J u n ' 8 J u l ' 8 A u g ' 8 S e p t ' 8 O c t ' 8 N

• v

' 8 D e c ' 8 J a n ' 9 F e b ' 9 M a r ' 9 A p r ' 9 M a y ' 9 J u n e ' 9 J u l

• 9

A u g

• 9

S e p

• 9

O c t

• 9

Month % Loss % Loss Target Linear (% Loss)

Target - 12%

Trend line

Actual

Network Upgradation: HVDS and Metering

Page 12

00781-9

12

Contents of the RFP

Volume –I – RFP Document – Draft Agreement between BESCOM and ESCO – Draft Agreement between ESCO and Farmer  Volume-II (on CD) –

• Annex. A to H- regarding site study about feeders, land, irrigation,

pump etc carried out by various agencies.

Risk Mitigation:

Annexure A: Concept Note on Agricultural DSM (June, 2007) Annexure B: Financing Agricultural DSM Projects. (Aug, 2008) Annexure C: Map of Feeders 12 & 13 in project area (200a6) Annexure D: Land use maps for Feeders 12 & 13 in in the project area (July 2008) Annexure E: Pumpset Survey for Feeders 12 & 13 in the project area (Updated 2008) Annexure F: Water Balance Study in parts of Doddaballapura Taluk, (October 2008) Annexure G: DPR: Irrigation Efficiency Improvements Feeder 12 and 13 (2006) Annexure H: Farmers’ Education in Doddabballapura (2004-2008) )

Page 13

00781-9

The Bid Process: Pre-Bid Meeting

Page 14

00781-9

The Bid Process: Site Visit

Page 15

00781-9

Technical Criteria Maximum Points Understanding of the Problem & Technical Approach 30 Proposed Organization, Staffing and prior experience related to the project 50 Innovation & other factors 15 Usage of (BEE) Star-rated pumpsets 05

Applicant with a score of 70 or more shall be declared as technically qualified.

Selection: Technical & Financial Criteria

Financial Criteria Energy Saving in the project with reference to the base line (in %) X (say) Proportion of Energy saving proposed to be shared with BESCOM (in %) Y (say) Bidding Parameter (in %) X*Y Applicant proposing the highest value of bidding parameter shall be the finalist ESCO

Page 16

00781-9

16

Obligations of BESCOM Obligations of BESCOM

• BESCOM shall be responsible for efficient and reliable operation, maintenance and

repair/replacement of power supply system

• BESCOM had implemented HVDS with one transformer for one pump.
• Each pump to have a separate meter physically located on the Distribution Transformer

(DT).

• BESCOM has installed switched capacitors on 11 KV systems.
• BESCOM will make payments on a monthly basis to the ESCO based on the share of

energy savings derived from the competitive bidding process.

• Seek GOK support for implementation of proposed project; keep KERC informed and seek

necessary KERC approvals, if any.

• BESCOM will be obliged to provide the necessary hours of supply to the Feeders as per

policy of GOK.

Project Execution: Contracts

Page 17

00781-9

17

Obligations of ESCO Obligations of ESCO Financing and implementing the new energy efficient pumpsets Planning the New High Efficiency Pump (NHEP) procurement, installation, maintenance and repair/replacement during the contract. Dismantling the old pumps and ensuring its disposal in a manner that it can not be used as irrigation pumpset anywhere in India. For maintaining a log of easily visible serial numbers and markings in the casting on the

• products. (For purposes of record and scrutiny against tampering of the IP set.)

Agreements to be signed between ESCO & BESCOM. BESCOM to facilitate signing of agreement between ESCO & farmers. ESCO, jointly with BESCOM, to implement a monitoring and verification (M&V) protocol for meter reading.

Project Execution: Contracts

Joint Obligations of BESCOM and ESCO Joint Obligations of BESCOM and ESCO

Page 18

00781-9

Capacity Building

More than 4,400 participant days of training/capacity building was delivered

Page 19

00781-9

Responsiveness and Impact

 Interest of various stakeholders: – State governments – Government of Karnataka – Regulatory commissions – Karnataka, Haryana and others – Utilities – BESCOM, UHBVNL and others  Long term contract signed between ESCO and BESCOM  Impact – energy savings: 46% of the baseline consumption

Page 20

00781-9

Sustainability –Way Forward

• 1. Continuous Awareness generation and capacity building of farmers.
• 2. Enhance Water Efficiency
• Adoption of micro irrigation technologies
• Improving cultivation practices
• Changing/adapting cropping patterns by farmers
• Water Conservation and Management
• 3. Capacity building of ESCO
• 4. Regulatory Incentives for DSM in Irrigation Pumping
• 5. Institutionalization through various Institutions (NABARD, Agricultural University)

Page 21

00781-9

Project Partners

Page 22

00781-9

Thank you Public Recognition