Merchant Markets in Egypt Nov 2018 Clean Max: Asias largest C&I - - PowerPoint PPT Presentation

Merchant Markets in Egypt

Nov 2018

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Clean Max: Asia’s largest C&I solar developer

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Sources:

• http://www.bridgetoindia.com/wp-content/uploads/2017/07/India-Solar-Rooftop-Map-2017.pdf
• https://en.wikipedia.org/wiki/Solar_power_in_the_United_Arab_Emirates
• Installed

base

• f

500 WMp, entirely for commercial and industrial customers

• Includes ~350 MWp of wheeling

based solar farms and ~150 MWp of rooftop solar plants

• Ranked

#1 Solar Developer since the inception of Bridge to India’s “India Solar Rooftop Map” with market share of 20-25%

• ver the last 5 years
• Customers

include MNCs, government facilities, universities etc.

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Merchant markets are where customers can choose their power generators

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GENCO TRANSCO DISCOM CUSTOMER GENCO TRANSCO DISCOM CUSTOMER In traditional markets, generation, transmission, and distribution are typically bundled together leaving the customer with no choice of generator or power source In merchant markets, customers can engage bilaterally with generators, and use the Transco & Discoms as essentially ‘highways’ of power Govt utility Govt utility Private Supplier

Bilateral Agreement

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Solar is unique as it allows for decentralisation of power generation

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Net Metering Wheeling

Location and structure Typical Plant size

Benefits

• Solar PV system

located on-site of consumption

• Excess power fed to

grid for energy credit

• Solar PV system located remotely

at a solar farm; injecting power into the grid

• Grid allows consumers to offset

their consumption against solar generation as per bilateral PPA

• 200 kWp to ~5MWp
• Restricted by roof size
• Tens or hundreds of MWp
• Restricted by market size, grid-

stability study, land availability

• Monetisation of rooftops
• Daytime peak shaving
• Long term reduction in

transmission and distribution infrastructure

• Significant capacity realisation

through solar

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Benefits of a vibrant merchant market

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Base Load

Load Profile Solar output

• Contributes to energy self sufficiency by channeling private enterprise to generation
• Natural demand-supply adjustment; private plants typically have a much shorter project

cycle than mega power plants

• Decouple electricity costs from fossil fuel prices
• Daytime electrical peak-shaving reduces burden and cost on utility infrastructure
• Competitiveness and efficiency drives down cost of power over the long term

2014 2015 2016 2017 2018

Solar PV system Costs

Solar output matches daytime peak in MENA region

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Metal roofs

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Concrete roofs

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Carport based solar power plant

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Off-site solar farms for wheeling projects

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30MWp farm in Dindigul,TN 30MWp farm in Tumkur, KA

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Catalysts for Merchant Markets

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Market Proposition: Driven by C&I need to reduce energy cost in the face of rising grid tariffs

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5 10 2013 2014 2015 2016 2017 2018 Grid vs Solar Tariff movement in India (INR/kWh) Grid Tariff Solar Tariff 0,2 0,4 0,6 2013 2014 2015 2016 2017 2018 Grid vs Solar Tariff movement in Dubai (AED/kWh) Grid Tariff Solar Tariff 0,2 0,4 0,6 0,8 1 1,2 2013 2014 2015 2016 2017 2018 Grid Tariff movement in Egypt (EGP/kWh) Grid Tariff

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While driven by private enterprise, merchant markets need conducive regulatory frameworks to thrive

• Clear and granular net metering and wheeling policies with

Øeligibility criteria for participation Øexhaustive list of permissions with single nodal authority; ideally not the discom Øclarity on land acquisition, for wheeling projects Øexhaustive list of charges Øimplementation guidelines for discom/transcom officials Øtimelines on policy applicability

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Financing private PPAs unconventional but possible with robust contracts, green capital and local equity

• Large base of credit worthy offtakers essential – MNCs, large local groups etc
• Local lending critical to exponential growth – portfolio style lending lines, local bank

distribution backed by DFIs/IFIs tends to work best. ”Priority sector” lending also useful to catalyse market.

• Local private equity very important since
• Primary source of funding till banks enter the fray
• Private PPAs almost local currency denominated
• Comfort factors for lenders/investors (in addition to regulatory factors)
• high quality offtakers and PPAs
• pooled risk across multiple projects/offtakers

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Q&A

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