Harnessing the Indian Sun Alan Rosling Chairman, Kiran Energy May - - PowerPoint PPT Presentation

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Harnessing the Indian Sun Alan Rosling Chairman, Kiran Energy May - - PowerPoint PPT Presentation

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Harnessing the Indian Sun Alan Rosling Chairman, Kiran Energy May 2012 Private and Confidential Introduction to Kiran Energy Project Management Leading Solar Power IPP in India with 75 MW contracted capacity Professional Management Team

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SLIDE 1

Harnessing the Indian Sun

Alan Rosling

Chairman, Kiran Energy

May 2012

Private and Confidential

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SLIDE 2

Introduction to Kiran Energy

  • Leading Solar Power IPP in India

with 75 MW contracted capacity

  • 25MW operational
  • 50MW of contracted capacity in

development in 2012

  • Focus on grid connected and

corporate captive solar photovoltaic power plants in India

  • Funded by a consortium of private

equity investors

  • Promoted by :
  • Ardeshir

Contractor: Former Managing Director of KPMG India

  • Alan Rosling: Former Executive

Director of Tata Sons

  • Joint venture with the Mahindra

Group

Private and Confidential

Project Management Professional Management Team Project Financing Strategic Relationships Strong Equity Backing Land Banking

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SLIDE 3

Indian Carbon footprint

Region3 per capita Electricity consumed (kWh) Per-Capita CO2 Emission (tonnes)

World 2752 4.38 US 13616 19.10 UK 6142 8.60 China 2346 4.58 India 543 1.18

Source: 1. Indian Network for Climate Change Assessment – 2007, 2. World Bank Database, 3. International Energy Agency 2009, 4. GHG emission profile - Climate Modelling Forum, MOEF India

India - GHG Emissions Distribution (MT C02- eq)1 Trend of GHG Emissions (billion tonne C02- eq)2

Power Sector key contributor to GHG emissions

Indi a Chin a U K U S

Private and Confidential (billion tonnes)4 TERI Poznan Model 7.3 McKinsey India Model 5.7 TERI MoEF Model 4.9 IRADe AA Model 4.2 NCAER CGE Model4.0

203 2

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SLIDE 4

High Dependence on Coal

(MW) Peak Demand Peak demand met Peak Demand Deficit % Maharashtr a 20200 14678

  • 27.3

UP 11800 8680

  • 26.4

Andhra P. 13916 11336

  • 18.5

Gujarat 11832 9569

  • 19.1

Tamil Nadu 12755 10616

  • 16.8

All India 136193 118676

  • 12.9
  • Energy security in India is

weak

  • 65% of energy produced is

thermal and mainly using coal

  • 75% of oil required

imported

  • 30% of coal required

imported

  • 9% GDP growth shall

demand growth in Energy generation by 10%

Private and Confidential

Source: Electricity Survey, Central Electricity Authority

Total Capacity – 199 GW

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SLIDE 5

Renewable Energy in India

  • Renewables only 12% of Indian electricity generation
  • Focus on increasing share of Renewable energy
  • 7 GW capacity added last year out of which around 3 GW had been from

renewable sources

Source: MNRE

Private and Confidential

achievement as on 31 Jan 2012 , * Estimated potential 20 MW/sq. km 7% 39 % 23 % 2% <1 %

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SLIDE 6

Global Solar Industry

  • By end of 2011, over 64 GW Solar PV

capacity installed globally

  • Exponential growth in last decade
  • Germany – market leader

Source: Solar PV Industry 2010 - Indian Semiconductor Association, BSW Solar – PV market, others

Country

Installed Capacity

end of 2011

Germany 25 GW United States 11 GW Spain 7 GW China 8 GW India ~1 GW World solar radiation map

Private and Confidential

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SLIDE 7

Decreasing Cost of Solar Power

  • Cost reduction coming from scale, efficiency and innovation
  • 40% reduction expected by 2015, further 18% by end of 2020

Source: Solar Power – Darkest before dawn: McKinsey - April 2012

Private and Confidential

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SLIDE 8

India Solar Resource

  • India has a daily solar radiation of

4-7 KWh / m2 with 250-300 annual sunny days.

  • Rajasthan has the highest

intensity of radiation (6 – 7 Kwh/m2/day)

  • Solar insolation in Germany is

about 3.15 Kwh/m2/day, significantly lower than India’s average

  • India matches US as highest

average annual solar energy yield Solar Resource Map

Private and Confidential

Source: DLR, Fraunhofer Institute, DOE, NREL, Sargent and Lundy, McKinsey

(in kWh / kWp /year)

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SLIDE 9

Policies – Central Government

Jawaharlal Nehru National Solar Mission

  • One of the eight mission under National Action Plan
  • n Climate change
  • Launched in 2009 with target of 20,000 MW till

2022 in three phases

  • Reverse Bidding against Regulated tariff
  • Solar power to be bundled with cheap power and

sold to state utilities through central agency - NVVN

  • Kiran energy won 5 MW in phase I (tariff Rs. 11.89

/unit) and 50 MW in Phase II (tariff Rs. 9.34/unit)

Private and Confidential PM Manmohan Singh announcing India’ s Solar Mission at the Copenhagen Climate Change Summit 2009

Solar PV Batch I Batch II MW 150 350 No. 30 28

  • Avg. Tariff

(Rs. /unit) 12.16 11.89

1100 MW by

Dec 2013

  • Phase I

4000 MW by

Dec 2017

  • Phase

II

20000 MW by

Dec 2022

  • Phase

III

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SLIDE 10

Policies – State Governments

  • Gujarat Phase I & Phase II
  • 959 MW already allocated under Phase I

and II;

  • 601 MW commissioned
  • Establishment of Asia’s largest solar

park

  • Rajasthan State Policy
  • 100MW for Solar PV projects allotted with

target 600 MW by 2017

  • Karnataka State Policy
  • Invited for bids for 50 MW Solar PV

projects and 30 MW solar thermal projects

  • Target of 200 MW by 2016
  • Orissa State Policy
  • Total capacity: 25 MW Solar PV, Bidding

in Feb

  • Lowest tariff: Rs.7/unit

Private and Confidential

  • Mr. Ardeshir Contractor collecting Allotment

Letter from Mr. Narendra Modi, Chief Minister of Gujarat

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SLIDE 11

Renewable Purchase Obligation

  • With aim to derive 15% of

energy requirements from renewable sources by 2020, Regulators have mandated RPO including solar RPO on

  • Distribution utilities
  • Captive consumers
  • Open access consumers
  • State governments have

introduced solar RPO with interim targets with target of 3% by 2022

  • RPO can be met by generation
  • r power purchase or

Renewable Energy Certificates (RECs)

  • Strict enforceability mechanism

by way of penalty of forbearance price of REC – currently Rs. 13/unit

State wise Solar RPO targets (2012-13)

Private and Confidential

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SLIDE 12

Solar Sector in India

Solar projects to be commissioned by December 2012

(MW) Nehru National Solar Mission (JNNSM) Phase II coming up and unfinished projects of Phase I, Migration and Rooftop 500 Gujarat State Policy Phase III to award unfinished projects

  • f phase I and II

965 Rajasthan State Policy Including PV and bundled capacity 216 Karnataka Policy Recently allotted projects under policy 120 Madhya Pradesh Policy 250 Development for RPO\ 1500 Total 3500

  • Solar Sector in India is at very

nascent stage

  • No long run ground station data
  • Limited manufacturing capacity
  • No experienced EPC

contractors

  • Banks still learning the industry
  • 2011 saw step change in
  • India. Almost 1GW installed
  • Merely 0.2% of grid interactive

renewable power

  • Higher potential than any
  • ther renewable sources in

India Solar Sector in India

Private and Confidential

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SLIDE 13

Opportunities and Challenges

Opportunities

  • Strong political/regulatory

support for Solar

  • Burgeoning energy demand
  • High Solar energy resources
  • Reducing cost/ Improving

technology

  • Increasing cost of

conventional power

Challenges

  • Financial Health of State

Discom/ Offtakers

  • Price versus conventional

power

  • Financing costs
  • Land and community issues
  • Clearances and Permitting
  • Substandard Grid

infrastructure

  • Implementation challenges

Private and Confidential

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SLIDE 14

Solar Economics

Impact of solar on electricity pricing

  • Total Generation – 900 bn kWh
  • 2 GW of Solar Capacity expected

in 2012

  • Expected Solar Generation only

0.3%

  • Tariff impact assuming distribution

to all users – Rs 0.03 / kwh

Solar Parity

  • Reduction in cost as result of scale

and innovation.

  • Cost of power from conventional

sources are increasing due to higher fuel costs

  • Grid parity by around 2017 at

around Rs.6 ($ 0.12)/unit

Source: KPMG Rising Sun Report

Private and Confidential

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SLIDE 15

Looking Forward

  • Grid Connected Solar

System

  • Large PV, CPV and CSP
  • Off Grid Solar System
  • Large PV/CSP – RPO, Captive
  • Decentralized Solar power
  • Roof top – Residential and

Commercial

  • Rural Electrification
  • Innovative land use (canal,

dam, tower, border land, etc)

  • Solar thermal applications
  • Water Heating
  • Industrial thermal application

including cooling

  • Hybrid technologies

Private and Confidential

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SLIDE 16

Positive Outlook

National Level Solar Policy

  • Target of 1100 MWs by

2013

  • Target of 20 GW by 2022

State Level Solar Policy

  • State Government

implementing Solar Policies to meet RPO Obligations

  • DISCOMS have rising

RPO obligations

Private Compan ies

  • Major Captive Power consumers

have to fulfil RPO obligations

  • Diesel gen-sets being replaced

by solar (in MW, YE Mar 31) Source: Broker research, KPMG.

CAGR (2012–18): 53% CAGR (2018–22): 60%

Achievement of Grid Parity

Indian Solar Market is expected to add 2-3 GW per annum for next 5-6 years

Private and Confidential

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SLIDE 17

Enablers

  • Policy
  • Policy to achieve scale and hence lower cost
  • Roadmap of additional annual capacity
  • Stability of regulation
  • Technology
  • Access to latest global technology
  • Local Production
  • Financing
  • Equity
  • Debt (long term, rupee, fixed rate, structured)
  • Credit Enhancement (REC market, Offtakers)
  • Development support for off grid application

Private and Confidential

60 GW

equals

102 MTPA

  • f

Carbon

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SLIDE 18

Thank You!

arosling@kiranenergy.com

Private and Confidential