Revenue Prospectus from Solar Projects

Niroj Kumar Mohanty

Managing Director, Core CarbonX Solutions Private Limited

Green is Money Waste is Gold

NAPCC
2008 :

National Action Plan on Climate Change (NAPCC)

Suggests RPO at 5% in year 2010, increasing 1% every year for 10 years.

The Electricity Act, 2003 section 86(1)(e) requires, the state commission to specify renewable purchase obligation (RPO) for the obligated entities. Obligated Entity means the distribution licensees, consumers owning captive power plants, and open access consumers in the state January,2010 : CERC issues REC Regulation on 14th Jan,2010 CERC(Terms and Conditions for recognition and issuance of Renewable Energy Certificate For Renewable Energy Generation) Regulations, 2010

Central Policy
JNNSM ( Phase 1) Batch Batch 1 Batch 2 Projects Allotted(MW) 150 350 Capacity allocations under the NSM Commissioned (MW) 130 Schedule to commission by 2013 Min Rs.7.49/ kWh Benchmark Tariff (Rs/kWh) 17.91 Max Rs.9.44/ kWh Avg.Tariff Rs.8.77/kWh Lowest Tariff Discovered (Rs/kWh) 10.95 % Reduction in tariff 43%

JNNSM (Phase 2)-Draft Policy

Target Capacity addition through Central schemes 2013-14 2014-15 100 MW 0 MW 770 MW 1,080 MW 870 MW 1,080MW Total 200 MW 800 MW 1, 520 MW 1, 080 MW 2,520 MW 1, 080 MW

Rooftop and small Solar Bundling (FiT)

PV PV PV CSP

100 MW 800 MW 750 MW 0MW 1,680 MW 0 MW State Schemes(MW) 3780 1620 5400

Utility Scale
Total

VGF

PV CSP

Item Description Solar PV Solar Thermal Total

Capacity (MW) 6300 2700 9000

Central Schemes (MW) 2520 1080 3600

Source: JNNSM Draft Policy

Technology Wise Capacity Allocation

State Policies
State
Gujarat

Applicable
2009-2014

Target
500 MW

Allocated Process
Fixed Tariff

Awarded
958.5 MW

Tariff Rs/Unit
Rs. 15/-(12 Years) Rs 5/-(13 Years) Comm., up to 28/1/12 Rs. 7.94/-( Lowest) Rs. 8.50/- (Highest) Bench Mark Tariff Rs. 8.42/ Unit Rs. 7.28 -------------Rs. 5.97/- (Lowest ) Rs.7.90/-, Rs. 8.05/-, Rs. 9.59/-, Rs. 12.54/-

Karnataka Rajasthan Odisha Chhattisgarh Tamil Nadu Madhya Pradesh

2011-2016 2011-2012 (Phase 1 ) 2012-13 2012- 2017 2012-2015 2012-2013

200 MW 200 MW (100 MW PV) 50 MW 1000 MW 3 GW 800 MW (200 MW each)

Bidding Process Reverse Bidding Bidding process Bidding Process Bidding Process Bidding Process

70 MW --------25 MW ---------499 MW 200 MW

Solar RPO
States Andhra Pradesh Arunachal Pradesh Assam Bihar Chattisgarh Delhi JERC (Goa&UT) Gujarat Haryana Himachal Pradesh Jammu and Kashmir Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Manipur Mizoram Meghalaya Nagaland Orissa Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttarakhand Uttar Pradesh West Bengal 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% Not regulation issued for RPO by the Power Department 0.10% 0.15% 0.20% 0.25% 0.25% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.50% 3.00% 0.25% 0.50% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 0.30% 0.40% 0.50% 1.00% 0.00% 0.05% 0.75% 0.01% 0.25% 0.25% 0.25% 0.25% 0.25% 0.50% 0.75% 1.00% 2.00% 3.00% 0.10% 0.25% 0.50% 1.00% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% .0.25% 0.25% 0.25% 0.25% 0.25% 0.40% 0.60% 0.80% 1.00% 0.25% 0.25% 0.50% 0.50% 0.50% 0.25% 0.25% 0.25% 0.25% 0.30% 0.40% 0.25% 0.25% 0.10% 0.02% 0.20% 0.25% 0.30% 0.30% 0.07% 0.13% 0.19% 0.50% 0.75% 1.00% Not regulation issued for RPO by the Power Department 0.05% 0.10% 0.10% 0.03% 0.05% 0.50% 1.00% 0.25% 0.30% 0.40% 0.50% 0.60%

Source: MNRE

Solar Power Capacity Requirement(FT 12- FY22)

The following table illustrates the solar RPO requirement by 2022 on the basis of expected demand in India
Year 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Solar Energy Requirement (MU) for Energy Demand (MU) (A) Solar RPO (%) (B) RPO Compliance(A) *(B) 953,919 1,022,287 1,095,555 1,174,074 1,258,221 1,348,399 1,443,326 1,544,936 1,653,700 1,770,120 1,894,736 0.25% 0.25% 0.50% 0.75% 1.00% 1.25% 1.75% 2.25% 2.50% 2.75% 3.00% 2,385 2,556 5,478 8,806 12,582 16,855 25,258 34,761 41,343 48,678 56,842 Solar Capacity Requirement forRPO compliance (MW) 1,433 1,536 3,291 5,291 7,560 10,127 15,176 20,885 24,839 29,247 34,152

Source: MNRE

State-wise installed capacity break-up(Till 7/1/13)

Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Total

States Andhra Pradesh Arunachal Pradesh Chhattisgarh Delhi Goa & UT Gujarat Haryana Jharkhand Karnataka Kerela Madhya Pradesh Maharashtra Odisha Punjab Rajasthan Tamil Nadu Uttarakhand Uttar Pradesh West Bengal

Installed Capacity (MW) 23.75 0.025 4 2.525 1.685 824.09 7.8 16 14 0.025 7.25 21 13 9.325 206.15 17.05 5.05 12.375 2.05
1187.15

Projects Projects Under JNNSM Projects under the State Policy Projects Under RPSSGP/GBI Scheme Projects Under REC Scheme Other projects Total

Capacity (MW) 187.5 824.09 87.8 4.75 83.01 1187.15

Note : The data is compiled on the basis of information obtained from IREDA, NVVN, State Agencies and Project Developers

Source: MNRE

Solar Business Models

Model 1: Feed In Tariff ( FiT)

FiT Projects in India are allocated by central and state authorities

The National Solar Mission (NSM) projects are allocated by NVVN For State allocations, the state renewable energy department (NREDCAP, TEDA, KREDL, MEDA) or the power distribution company allocates projects. The Power Purchase Agreement( PPAs) are signed with power distribution companies
Allocation Process

Reverse Bidding ( Like Rajasthan) Bidding ( Like AP, TN, MP) Fixed Price ( Like Gujarat)

Solar Tariff Reflections in Various States

Tariff (INR)
14 12 10 8 6 4 2 0 Tariff (INR)

Solar Tariff Reflections in Tamil Nadu

INR/kWh
20 18 16 14 12 10 8 6 4 2 0 0 20 40 60 80 100 120 INR/kWh

Model 2: APPC + REC

Sells Power to the DISCOM at the APPC and in addition avails RECs

Projects is strongly linked to the APPC (Rs/ kWh)

State-wise APPC Prices Andhra Pradesh Karnataka Tamil Nadu Rajasthan Gujarat 2.00 2.60 2.54 2.95 2.98 Financial Model Tariff @ APPC REC @ Floor Price Total Revenue ( Price Applicable Till March 2017) 2.00/9.30/11.30/-

Solar REC Price ( Rs/ kWh) 20122017 20172022 2022 Floor Price: Rs. 9.3 Forbearance Price: Rs 13.4 Floor Price: Rs. 1.50 Forbearance Price: Rs 2.00 -------------------

Model 3: Open Access + REC

Open Access

Projects enters into an

Tariff REC @ Floor Price till March 2017 Tariff beyond Mar 2017 Wheeling Loss (%)* Transmission Loss (%) Wheeling Charges (Rs) Transmission Charges (Rs) Electricity Duty (Rs) Banking Charges (Rs) Cross Subsidy Charges (Rs) Cost for REC (power exchange + Issuance+other) Net Realization ( Rs /Unit) Till Mar 2017 After Mar 2017

Variable (INR 6.5/ Unit) INR 9.3/ Unit INR 1.5/unit 3.47% (@ 33 kV) 4.6% INR 0.2062/ Unit INR 0.641/ Unit INR 0.25/Unit N/A INR 1.72/Unit (33 KV) INR 1.43/Unit (132 KV) 0.75 INR 12.32/ Unit ( 33kV) INR 12.61/ Unit (132kV) INR 8.00 /unit

independent PPA with a third party ( Typically be an Industry, Commercial or Residential consumer of electricity) and in addition RECs are availed

Model 4: Captive + REC

Commercial or Industrial
Open Access

Tariff REC @ Floor Price till March 2017 Tariff beyond Mar 2017 Wheeling Loss (%)* Transmission Loss (%) Wheeling Charges (Rs) Transmission Charges (Rs) Electricity Duty (Rs) Banking Charges (Rs) Cost for REC (power exchange + Issuance+ consultancy Fee) Net Realisation ( Rs /Unit) till Mar 2017 After Mar 2017

INR 6.5/ Unit INR 9.3/ Unit INR 1.5/unit 3.47% (@ 33 kV) 4.6% INR 0.2062/ Unit INR 0.641/ Unit INR 0.25/Unit N/A 0.75

consumers of grid electricity set up a solar REC project for the selfconsumption of solar power Tax incentives such as accelerated depreciation can be availed
Minimum of 26% stake in the

project from the power consumer Minimum of 51% of the electricity should be self-consumed

INR 13.96/Unit INR 8/unit

About CoreCarbonX
CoreCarbonX is a management consulting working on sustainability aspects of the project. We have presence in 12 countries and office at Nashik , New Delhi, Trivandrum and Hyderabad. Our services Total process management for project Emission management services ( Carbon credits, REC, carbon footprint)

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Services under Solar Project

Project Management Services We manage the entire value chain of the solar, wind and other renewable energy projects. Facilitating in the preparation of the bid documents based on the expertise and the knowledge of the team of highly qualified professionals of CoreCarbonX Preparing the feasibility study reports, Assisting the investors in the loan syndication Liaison work involving the assistance in procuring the required clearances from the state agency, facilitating the power purchase agreement Closely work with the project developer in identifying the right EPC partner.

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Niroj Mohanty nmohanty@corecarbonx.com Thank you!!!