Astonfield Renewable Resources, Ltd. Oral Hearing : Draft - - PowerPoint PPT Presentation

Astonfield Renewable Resources, Ltd.

Oral Hearing : Draft Regulations for Renewable Energy

J l 2009 July 2009

Astonfield Renewable Resources Ltd. An Astonfield Group Company Astonfield Renewable Resources Ltd. An Astonfield Group Company

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D ft N f R bl E Draft Norms for Renewable Energy

• Proposed regulations on determination of tariff for renewable energy

p g gy provides an enabling framework to all the stakeholders

Clarity to developers on the expected returns from the projects Line of sight on tariff related aspects to make up-front investments in the

sector

Pushes manufacturers to aggressively lower costs

gg y

The regulations provide a guiding path which will be hopefully followed

by the SERCs while declaring state-specific tariffs for renewable energy

With solar guidelines in particular, CERC’s stated guidelines sufficient to

allow for execution of initial grid connected projects in late 2009 and 2010

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D ft N f R bl E S l PV Draft Norms for Renewable Energy: Solar PV

Concept of Feed In Tariff incentivizes the Developer to

Clause 2 (s a) Solar

• 1. National Solar tariff

determination Standards

Concept of Feed In Tariff incentivizes the Developer to choose the most reliable technology Gestation period for Solar PV projects is typically in the range

• f 6-8 months

Execution can be expedited

Clause 2 (s-a), Solar PV power plant, technology as approved by MNRE

determination Standards

In view of performance guarantees offered by p In view of performance guarantees offered by manufacturers of solar panels, tariff period / useful life of 25 years is warranted and appropriate SERC adoption of 25-year tariff period and translation into PPA terms will be critical component asked for by financiers

Clause 6, Tariff period

• f 25 years

PPA terms will be critical component asked for by financiers

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Solar PV can Achieve Peak Grid Parity as early as 2013

PHASE I PHASE II (Post Govt Policy, Market Forces take effect) (Govt Policy very important) 7% 6% 5% 4%

India – Estimated price

• f peak electricity today:
• Rs. 6.50/KWh

Convergence / Peak Grid Parity

India can substitute expensive sources such as diesel with solar to meet growing peak power demand A t fi ld ti t th t b l d id it b hi d b 2020 23 b d th t i t b d tl il bl *

3 Source: Stephen O’Rourke/Deutsche Bank / Astonfield Analysis

Astonfield estimates that base load grid parity can be achieved by 2020-23 - beyond that point, abundantly available domestic solar power will be cheaper than imported coal generated power, positioning India to be energy independent *

* Assumes that conventional power tariff escalates at roughly 5-7% per annum

D ft N f R bl E S l PV Draft Norms for Renewable Energy: Solar PV

Prescribed norm is aggressive, especially in view of the prevailing benchmark prices as quoted by suppliers

• 1. National Solar tariff

determination Standards p g p q y pp Quoted capital cost numbers for tariff petitions in Rajasthan : Party 1 : Rs 2140 L / mw Party 2 & 3 : Rs 2115 L / mw Party 4 : Rs 2006 L / mw

Clause 57, Capital cost : Normative capital cost of Rs 1800 L / mw for FY

Party 4 : Rs 2006 L / mw However, given manufacturers desire to supply to the Indian solar market, such a guideline could drive them to accept reduced margins Multi-year guidelines could be effective in laying out cost curve t d f f t

1800 L / mw for FY 2009 – 10

CUF and the corresponding PLF is highly dependent on the solar insolation levels (which can vary from 5 kwh / sqm/day to 6 kwh / expected from manufacturers

Clause 62 Capacity

insolation levels (which can vary from 5 kwh / sqm/day to 6 kwh / sqm / day Corresponding PLF shall be 16.67% to 19% (with Gross output varying from 1.46 Mus to 1.75 Mus p.a.) For regions whose insolation imply CUF less than 19%, further

Clause 62, Capacity Utilization Factor : 19%

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downward pressure will be placed on installed cost to achieve commercial viability

Solar RPPOs: Critical to Ensure Visibility of Solar S t G th t Att t U F t I t t Sector Growth to Attract Up-Front Investment

The rationale for Solar RPPO Available Benchmarks Demand is generated by State DISCOMs – in the absence of solar energy procurement targets, they will

Global Experience EU : 20/20/20 (20% cut in emission norms, 20% renewable energy portfolio 20% cut in

gy p g , y tend to opt for cheaper renewable power sources In addition to targets, there must also

20% renewable energy portfolio, 20% cut in energy consumption by 2020) Germany : solar accounts for 4% of renewable portfolio

be penalties on DISCOMs that fail to achieve these targets Path to Grid Parity is dependent on creating visibility through RPPO to build

Indian Experience Gujarat : Solar specific RPPO ( 1.5% in 2009, increasing to 2.5% by 2011)

creating visibility through RPPO to build manufacturer and developer confidence in economies of scale

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CERC can play a critical role in guiding the SERCs to declare solar- specific RPPO targets

THANK YOU

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