Lighting the Way - ADBs Rooftop Solar Project

Aiming Zhou Energy Specialist Asian Development Bank

7th Asia Clean Energy Forum Manila, Phillippines 4-8 June 2012

Why Solar Energy

In 2010, $100 billion (approximately 5%) of global retail electricity demand could be competitively addressed with solar power ~600 GWs ($2 Trillion of Solar)
1000000
# of MWh sold at each price point

Area of solar competitiveness

2020 2015 Solar Electricity Price Declining 2010

100000

10000

MWh

1000

100

Conventional Electricity Price Rising

10

1
>27 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2 3 4 5 6 7 8 9

US Cents per kWh

Source: Jigar Shah, 2011

Approaches for Solar Project Financing

Bankable Solar Projects PPA System Lease Contractual Intermediary

Fianncing

Utility Owned
User Owned Others

Purposes of ADB 567 kWp Rooftop Solar Project

1. Greening ADB Building Operations

Energy Efficiency (chillers, lighting etc.) Solar Power Supply to ADB Headquarter Bldg Others Photo Essay

2002 ADB Environment Policy

2003 Environment, Health and Safety Policy

2004 Six Sigma Program

2007 Sustainability Report

2009 LEED Certification Process (Gold in 2011)

2011 beyond Sustainability at ADB HQ

Purposes of ADB 571 kWp Rooftop Solar Project (continued)

2. Technology Demonstration

3. Business Model, build-operate-transfer with PPA

ADB
PPA
Power

Portion of Facility Building rooftop is leased for 15 years at $1/sq meter, over 6,640 square meters Solar power is sold to ADB at the rate decided by the bidding

Suntech/Propmech Consortium
Repayment

Financing (commercial financiers) Construction (571kWp) Operation (~ 613 MWh per year) Transfer (buyout option within 15 years and free at year 16)

Loan

Business

Commercial Financier

Financing

ADB Headquarters Complex

Details of Procurement Process

1. Pre Bidding Screening and clearance of legal, technical and commercial aspects for the project within Manila Jurisdiction Internal process for project development and approval by ADB Management 2. Bidding Process The Bidding Process: Conception pre- qualification criteria Draft technical and legal specification document Invitation to bid to qualified bidders (July, 2010) Selection of contractor / PPA signed 3. Project Development Construction , started in November, 2011 Trial operation and normal operation, May 2012

Diagram of ADB Rooftop Solar System

571 kWp Rooftop PV System Meralco 34.5KV/380Y/200V

Inverters

Switch 613MWh/yr

Busbar

ADB Substations 18,300 MWh/yr

The solar system supplies about 3% of the electricity consumption in ADBs complex

ADB Headquaters Compus

ADB Headquarters Complex -Before

ADB Headquarters Complex -After

Photo Credit: Propmech

Highlights

No upfront cost to ADB

The business model uses a PPA between the Suntech/Propmech Consortium (Project Implementer) and ADB (End User), whereby the project implementers bear the investment cost and O&M costs and user purchase the electricity at bid price.

ADBs credit worthiness helps the consortium secure non-recourse loan financing
PPA will help the project implementers to secure financing from local commercial financiers. With a 15-year PPA from ADB, this project becomes a bankable project

Challenges to replication
Challenges could arise in countries that have regulated and partially deregulated electricity markets. This model needs permission for third party-owned systems to sell to end users

Thank You !

Contact: azhou@adb.org

More information: www.adb.org/clean-energy