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Mahindra War room Finals 2012

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Team Members: Pulkit Bohra, Pulkit Mathur, Mudit Jain & Tarun Gupta ...

Team Members: Pulkit Bohra, Pulkit Mathur, Mudit Jain & Tarun Gupta

This presentation was prepared by the above students of IIM Ranchi as a part of Mahindra war room competition. They were the North zone Champions in the competition.

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  • Start by Pulkit Mathur
  • 1- Literature review2- talked to few SMEs3- visited solar power plant ….. Complete survey of the plant
  • Details across India …. Used in our research
  • Taken Over By PulkitBohra
  • CHANGEEPC is a manpower run business; not a production but management integration industry.
  • TABLE 7: Domestic content requirements or incentives have had some success globally CHINA ONTARIO, CANADA U.S. ITALY Stipulation vehicle National Development and Reform Commission Order 1204 Ontario Power Authority Feed- in-Tariff Program Rules American Recovery and Reinvestment Act (ARRA), “Buy American” Provisions Quarto ContoEnergia (the Fourth Energy Plan) Launch year 2003 2009 2009 2011 Industry benefited Wind All renewable energy industries All manufacturing industries Solar Details of local content requirement All wind farms developed in China, private or public, to have locally made components. The percentage of local content started at 50 percent in 2003 and was increased to 70 percent in 2004. Developers are requiredto have 50 percent of their project costs come from Ontario goods and labor at the time they reach commercial operation. Increased to60 percent from January 2011. All public projects backed by ARRA funds must use ARRA-compliant products. If the domestic content of a product is over 50 percent and manufactured within the U.S., it can be considered ARRA compliant. A bonus of 10 percent on the feed-in tariff when 60 percent of the material costs of an installation are from products manufactured in the European Union. Impact Worked effectively: By the time the condition was revoked in 2009, China had transformed from a marginal player to being the dominant manufacturer of wind turbines in the world. Working well: Companies like Silfab, Suntech, and Schneider set up manufacturing bases in Ontario. Mixed results (for solar): Most of ARRA-compliant companies are foreign players, such as Kyocera, Sharp, Sanyo (Japan); Suntech (China); Schott (Germany). At the same time, most U.S. players, such as FirstSolar, Sunpower, have bulk of manufacturing outside U.S. Impact as yet unknown: Likely to benefit manufacturers in Germany and Spain. FirstSolar qualifies. Norway included as an exception.
  • Taken By Mudit Jain
  • Change the chart …. More details
  • Advantages of Off-Grid Systems:Reliable grid-quality power supply, worldwideIdeal for local economic development and growthPV: a regional business model that creates jobsModular design enables expansions months or even years laterSupports all generators (PV, wind, hydropower, etc.)Standard AC technologyLocal Players V/s MahindraThere are several advantages that Local Payers have over Mahindra, these are detailed below:Personal touch, in small organizations the owners/promoters of the company themselves are involved in servicing the client. This gives a sort of personal touch in the services. Though with big companies brand name is an added advantage, but the general mentality of an investor is that if something goes wrong he can hold a local player accountable whereas in case of Mahindra he will just be running around. Lower overhead costs.
  • Leveraging the penetration of Mahindra Powersol for such sales centers in various cities
  • Taken by Mudit
  • Taken byTarun
  • Taken By Pulkit MathurRight of way …….. Issue in solar parksGovt or pvt land …. Problem solved with solar parkLand with high dniSoil suitable for civil workUnderground water etcAccess to grid and roads in densely populated regionsUtilize and ear mark land for such solar mission
  • Solar parks usually include incentives such as permits for developers and provide dedicated power infrastructure Well planned solar parks can allow quicker and more reliable project execution with fewer implementation risks for developers
  • (http://www.pv-magazine.com/news/details/beitrag/indian-solar-manufacturers-ask-for-anti-dumping-duties-of-up-to-200_100008789/#ixzz2BYXIb6GT); Business Today (http://businesstoday.intoday.in/story/american-businesses-eye-indias-solar-market/1/20370.html)
  • (http://www.pv-magazine.com/news/details/beitrag/indian-solar-manufacturers-ask-for-anti-dumping-duties-of-up-to-200_100008789/#ixzz2BYXIb6GT); Business Today (http://businesstoday.intoday.in/story/american-businesses-eye-indias-solar-market/1/20370.html)
  • Taken By Tarun

Mahindra War room Finals 2012 Mahindra War room Finals 2012 Presentation Transcript

  • Mahindra War Room 2012 Submitted by: Team Iguana, IIM Ranchi Mudit Jain 030/02 Mudit.jain11@iimranchi.ac.in 2nd Year Pulkit Bohra M106/12 Pulkit.bohra12@iimranchi.ac.in 1st Year Pulkit Mathur M107/12 Pulkit.mathur12@iimranchi.ac.in 1st Year Tarun Gupta M044/12 Tarun.gupta12@iimranchi.ac.in 1st Year Team Members Business Strategy for Cleantech (MEPC) [8]
  • [8] Case Study Objectives What Differentiated Offering can be made by Mahindra EPC ? How should Mahindra EPC become the preferred player for solar power developers? How should Mahindra EPC scale up the business ? Reforming Mahindra EPC 2
  • Research Methodology • Telephonic interview with Company executives from Rays Power Infra, FirstGreen Consulting, MINDA NexGentech • Discussion with Professors at IIM Ranchi • Secondary research from internet and databases (ISI Emerging, Proquest, EBSCO & Indiastat, CRISIL) Qualitative • On field survey (2 MW Solar Plant) • Technical associates Ltd. , Sandauli, Barabanki, U.P. • EPC Contractor was Mahindra EPC Quantitative • Cost – Benefit analysis for Solar park (300 MW) • Gujarat case study Analysis Critical & Action Oriented [8]3
  • Installed Solar Capacity In India Source: Bridge to India, as in October 2012 Sunrise Sector: Marching in the Right Direction About NSM EPC in India Case Objectives Recommendations Appendix [8]4
  • Targets For Solar Energy Production Under JNNSM Source: Bridge to India, as in October 2012 Target Fixed and Achievements Made for Development of Solar Energy under Jawaharlal Nehru National Solar Mission Application Segment Target for Phase-I 2010-13 Achievement 2010-11 Achievement 2011-12 Cumulative Target for Phase-II 2013-17 Cumulative Target for Phase-III 2017-22 Grid Solar Power incl. Roof top and Distributed small Grid Connected Plants 1100 MW 802 MW Allotted 1152 MW Capacity allotted 4000 MW - 10000 MW 20000 MW Off-Grid Solar Applications 200 MW 40.6 MW Sanctioned 118.071 MW Sanctioned 1000 MW 2000 MW Solar Collectors 7 million sq. m 4.5 million sq. m 5.5 million sq. m 15 million sq. m 20 million sq. m 0 2 4 6 8 10 12 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 INR/Unit Conventional Tariff (base) Solar Power cost Targets For Solar Energy Production Under JNSM Grid Parity expected by 2018-19 About NSM EPC in India Case Objectives Recommendations Appendix [8]5
  • Traversing The Mahindra EPC Value Chain EPC in IndiaAbout NSM Case Objectives Recommendations Appendix [8]6
  • Roles of an EPC Project Developer Project Consultant Financing Institutions/Banks EPC Company Vendors for Procurement Solar Offerings (On-Grid + Off-Grid) Cliental Offering & Access Operation & Maintenance Consulting Consulting Data Accumulate BoS Suppliers Utility/PPARegulatory Authority Module/Equipment Supplier EPC in IndiaAbout NSM Case Objectives Recommendations Appendix [8]7
  • Significant Growth Opportunities For EPC Companies • Quality assurance and risk minimization • A one point contact for developer – easy coordination and monitoring • Hedge against price fluctuations • Availability of post commissioning services Project installation – a crucial step in Solar PV Power ― Plant design & engineering, procurement and construction at site ― Responsibility of delivery within agreed cost, time and with desired quality ― Guaranteed plant performance Why EPC? Developers are looking for reliable EPC partners? • Vast experience – global experience, national experience of working under different conditions • Clean record of project completion in given time frame • In house manufacturing and technical capabilities • In house ready availability of construction equipment like:- — Diesel Generator, — Porta cabins, — Portable diesel lights, — Hydra, crane, Fork lift etc. • Availability of optimization software for regular analysis of production EPC in IndiaAbout NSM Case Objectives Recommendations Appendix [8]8
  • The Mahindra Advantage On-time completion record is a critical factor for project financing Potential mutual cost-optimization Track record of executing successful projects • Jodhpur – 5MW (completed) • Lucknow – 2MW (completed) • Jodhpur – 33MW (under construction) • Bikaner – 23 MW (under construction) Synergies with Mahindra sister companies • Mahindra Construction Equipment: For construction equipment • MaCE: Engineering Consulting • Mahindra Logistics: Logistics support • Mahindra Finance: Currently, primarily in rural financing Mahindra Group’s financial strength to avoid stoppage of work due to working capital EPC in IndiaAbout NSM Case Objectives Recommendations Appendix 9
  • [8] EPC in IndiaAbout NSM Case Objectives Recommendations Appendix EPC Companies Are Facing Several Challenges Issues With Solar EPC Companies Solar technology is not considered for project finance funding – Substantial fund requirement with limited banking facility Competitive bidding drove prices for grid-connected solar energy to INR7.49 – Race for cost reduction has led to compromise in quality New technology – Shortage of skilled manpower Financial closure, land procurement and development reduces project execution time – Compromising quality Grid connectivity is delayed sometimes by as long as 12 months in certain cases – losses for EPC contractor 10
  • [8] Case Study Objectives How should Mahindra EPC scale up the business? How should Mahindra EPC become the preferred player for solar power developers? What Differentiated Offering can be made by Mahindra EPC? Reforming Mahindra EPC 11
  • Mahindra EPC should consider backward integration to optimize cost and be future-ready Recommendation 1 [8] Recommendation 1About NSM EPC in India Objective 1 Appendix 12
  • Analyzing the scope of vertical integration for cost optimization Forward Integration: Already existing in the form of Mahindra Solar One. No Scope Backward Integration Source: Expert Interviews, Lanco, India Solar Compass, BridgeToIndia, October 2012 edition; Indian solar manufacturers ask for anti-dumping duties of up to 200%, PV Magazine; Business Today [8] Recommendation 1About NSM EPC in India Objective 1 Appendix Opportunities • As per an October 2012 report, the Indian Ministry of Commerce have said that the Indian solar manufactures have called for anti-dumping duties as high as 200% • The Ministry of New and Renewable Energy is likely to strengthen the current Domestic Content Requirement in the upcoming phase two of the NSM • By 2022, India will need INR1.6 trillion worth solar modules at today's prices Indian Suppliers to EPC Companies Mahindra EPC generating synergies from backward integration Moser Baer Solar Semiconductor Lanco SolarBHELBEL Titan Energy IndoSolar Topsun Solar PLG Power 13
  • Analyzing the scope of vertical integration for cost optimization Backward Integration Modules China dominates 70% of the global module market Costs have fallen down by more than half in last two years Looks to be a difficult solution at this point in time Inverters Inverters used in solar plants are same as used in other conventional power plants Existing players have been in the industry for decades Very difficult to compete with such existing players in terms of technology as well as cost Balance of Systems Used to account for only 10- 15% of the total cost With recent decline in other cost components BoS contribution is touching 40% Does not make much sense in investing resources in this activity as components are diverse (civil costs, cables, labor component, steel structures) and difficult to consolidate Source: Expert Interviews, Lanco, India Solar Compass, BridgeToIndia, October 2012 edition; Indian solar manufacturers ask for anti-dumping duties of up to 200%, PV Magazine; Business Today [8] Recommendation 1About NSM EPC in India Objective 1 Appendix Threat from local module manufacturers entering EPC space • Vikram Solar – Projects pipeline of 40MW for module supply and EPC under batch two of phase one of the NSM and the Gujarat Solar Policy. • Lanco Solar – Providing EPC for Gas Authority of India Ltd. (GAIL), is expected to use its own modules. • Enfield Infra-structure is developing a 10MW project under the batch two of phase one of the NSM and is expected to use its own modules that are being manufactured under the name of Sonthalia Group. 14
  • Poly Silicon Ingot & Wafer Cells Module Margins ~ 50% ~20% >10% ~7-10% Investments US $ 0.75 million/MW US $ 0.5 to 0.75 million /MW ~ US $ 1 million/MW ~US $ 100k/MW Optimum Scale of Investment 700 – 1000 MW ($560 - $800 million) 80 – 100 MW ($45 - $60 million) 30 – 50 MW ($30 - $ 50 million) 10 – 20 MW ($1 - $2 million) Project timeline 2.5-3 years 1-2 years ~ 1 year 4-6 months Cost Drivers Electricity, CAPEX CAPEX, Raw materials & Consumables Raw materials, R&D Raw materials Backward Integration in Phased Manner starting with Module and Cells Decent margins, provides entry point for future expansion, low CAPEX, smaller project timelines Source: Solar PV Manufacturing, EAI [8] Recommendation 1About NSM EPC in India Objective 1 Appendix 15
  • [8] Case Study Objectives How should Mahindra EPC scale up the business? How should Mahindra EPC become the preferred player for solar power developers? What Differentiated Offering can be made by Mahindra EPC? Reforming Mahindra EPC 16
  • OFF-GRID & ON-GRID A Franchise Model Recommendation 2 [8] Recommendation 2About NSM EPC in India Objective 2 Appendix 17
  • 50 50 45 3530 20 110 Mahindra Welspun Juwi Azure Vikram L&T Others Current Allocation under Phase 1 – Batch 2 Total capacity: 340 MW CurrentStateOfMahindra’sMarketShareinContractsAcquired • As Per JNNSM, Batch II - Phase I data, The major EPC contracts were raked up by the Local EPC Players. • Mahindra acquired only 14.7% of the total contracts. Lack Of Local Presence Of Mahindra EPC Perceived Stringent Processes Affects Approachability Perceived loss of bargaining power by developers Reasons Quoted By Clients For Low Turnover Of Contracts For Mahindra EPC Recommendation 2About NSM EPC in India Objective 2 Appendix [8]18
  • OFF-GRID ADVANTAGE OFFSETTING ON-GRID DISADVANTAGE Leveraging Mahindra’s Off grid for On-grid Solution OFF-GRID ADVANTAGE ON-GRID ISSUES • More penetration Available to the Off- Grid unit of Mahindra Solar One. • “Lack Of Local Presence” causing losing the contracts to local EPC players. • High Overhead Cost for Big Firms as against that for Local EPC players Recommendation 2About NSM EPC in India Objective 2 Appendix [8]19
  • ScalinguptheOffGridSolutions 20 [8] Recommendation 2About NSM EPC in India Objective 2 Appendix • Mahindra EPC should set up Regional Sales Offices which would serve as common outlet for Off-Grid & On-Grid Sales Support. • Develop a three level Hierarchical Network on the model Of Amul Cooperative to put in place an efficient delivery system, thus bringing down the turnaround time for EPC project. TheFranchiseModelForMahindraEPC Sales center Regions lacking in grid connectivity Huge demand of SEZs Telecom Towers 20
  • Big Data Meets Solar Energy Recommendation 3 [8] Recommendation 3About NSM EPC in India Objective 2 Appendix 21
  • Solar Investments Were Considered Risky In Phase 1 Due To Lack Of Performance Records Risky Investments Reverse bidding leading to under pricing of bids Without a proven track record High interest rate in India Banks were reluctant to lend funds Project Development Project Deployment Project Performance Lack of Information on [8] Recommendation 3About NSM EPC in India Objective 2 Appendix 22
  • Data Monitoring Will Be A Value-added Service By Mahindra EPC • Data would be accumulated directly from the solar plants • Value added services to the clients – Long term relationship with prospective client • Easier loan sanctions – Scientifically estimated bid for solar tenders • Data can be sold to other solar plants for analysis Urgent need for data monitoring and data accumulation – maintaining a Solar data depository Long lead in equipment procurement Delayed Financial Closure Absence of data in pre- bid stage Lack of data [8] Recommendation 3About NSM EPC in India Objective 2 Appendix 23
  • Roles of an EPC Project Developer Project Consultant Financing Institutions/Banks EPC Company Vendors for Procurement Solar Offerings On-Grid + Off-Grid Cliental Offering & Access Operation & Management Consulting Consulting Data Accumulate BoS Suppliers Utility/PPARegulatory Authority Module/Equipment Supplier [8] Recommendation 3About NSM EPC in India Objective 2 Appendix 24
  • [8] Case Study Objectives How should Mahindra EPC scale up the business? How should Mahindra EPC become the preferred player for solar power developers? What Differentiated Offering can be made by Mahindra EPC? Reforming Mahindra EPC 25
  • C(‘onsulting)EPC Thinking Ahead Recommendation 4 [8] Recommendation 4About NSM EPC in India Objective 3 Appendix 26
  • CEPC over EPC CEPC : Consulting, Engineering, Procurement & Construction • Ensures early entry for Mahindra along the value chain • Better relationship with the clients • The same team can be further expanded to convert clients for REC Central Government State Govt. and captive Power Imposed RPO Meet RPO Requirement By PPA By REC Through Allotment Through Trading REC brings scores of business opportunities: Source: Renewable Energy certificate registry of India Website [8] Recommendation 4About NSM EPC in India Objective 3 Appendix 27
  • 28 Recommendation 4About NSM EPC in India Objective 3 Appendix
  • Requirement of Solar capacity in MW in different states of the country to meet the RPO Opportunity Assessment CEPCforRenewableEnergyCertificates State 2010‐11 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 Kerala 27.4 29.1 31.0 66.5 71.1 75.7 Gujarat 109.8 237.7 515.5 695.1 894.9 1115.1 Maharashtra 159.6 181.0 192.9 411.4 436.9 462.4 Uttar Pradesh 98.0 214.0 466.9 629.9 811.4 1011.3 Bihar 17.3 20.2 23.3 52.6 58.6 64.7 Haryana 47.8 52.1 56.7 61.4 66.1 70.8 Delhi 39.9 86.3 139.9 203.5 275.5 330.7 Punjab 67.0 146.0 238.4 341.0 455.3 581.1 Rajasthan 66.2 142.4 230.1 330.4 442.6 566.6 Karnataka 73.0 157.6 255.9 374.9 510.8 663.6 Andhra pradesh 121.6 266.5 437.2 639.4 869.8 1128.4 West Bengal 53.9 114.9 184.2 268.6 364.6 472.0 Madhya Pradesh 62.2 133.7 216.0 312.7 421.7 543.0 Chhattisgarh 26.5 58.0 95.1 140.0 191.4 249.4 Total 1467 2780 4550 6740 8729 10980 0 5000 10000 15000 FY11 FY12 FY13 FY14 FY15 FY16 Expected installations through PPA Expected installations through REC Source: Renewable Energy certificate registry of India Website [8] Recommendation 4About NSM EPC in India Objective 3 Appendix 29
  • Key Challenges with respect to Indian Market : CEPC for Renewable Energy Certificates Penalties imposed on States for not complying with obligated RPO’s Bankability of products without PPA in question IPP’s might start late when project costs are dropped or technology improved For a Market driven phenomenon feasibility is difficult to access. In case of non- compliance the utilities will be imposed a penalty equivalent to the forbearance price multiplied by the shortfall in RPO compliance. Hence, the state agencies will comply with obligated RPO’s The prices are still regulated between a floor and a forbearance price which has been done to ensure the minimum feasibility of the project and simultaneously giving room for profit making A lot of incentives are offered to early starters like higher floor and forbearance prices, allowing Accelerated Depreciation benefit, assuming a higher project cost, excise duty off, custom duty off etc. These incentives will not be available to the next phase developers. This issue has been addressed by limiting the number of PPA’s that the government will sign with the Project developers and moreover all PPA’s will be through the bidding route thus minimizing any extra incentive. REC has been successful in other countries like UK, Australia, USA etc. Source: Renewable Energy certificate registry of India Website [8] Recommendation 4About NSM EPC in India Objective 3 Appendix 30
  • Solar Parks Ready To Sell Power Plants Recommendation 5 [8] Recommendation 5About NSM EPC in India Objective 3 Appendix 31
  • Targeted Capacity by 2022 in National Solar Mission : 20,000 MW Average Capacity targeted per State : 690 MW For an average 5 MW Plant, Number Of Plants per State : 138 Increased cost of setup Increased ONM cost Use of less efficient solar technology in the power plant Costly connection to the Grid STAGGERED CONFIGURATION CAUSES THE FOLLOWING ISSUES CurrentIssuesWithStaggeredPowerPlantsunderJNNSM Source: MNRE website [8] Recommendation 5About NSM EPC in India Objective 3 Appendix 32
  • Surmounting The Challenges LAND AVAILABILITY CONNECTING TO THE GRID WATER AVAILABILITY ISSUE GAS, SEWERAGE, ROADS AND FENCING Existence of suitable land not a barrier “As per Status report (Arora et al, 2010), the land area with DNI greater than 2,000 kWh/m2/year in India is around 112,500 km2. This is sufficient for a generating potential of about 10,930 TWh per year, many times the total electricity consumption projected for the country. Thus the existence of suitable land per se is not a barrier.” Solar Park concept vindicated The Indian HV transmission network is extensive. However, the 11kV distribution system is limited. HV transmission is a mixture of 400kV, 132kV and 33kV, substations drop this to 11kV for the distribution system. As a substation is expensive, it needs a large load to justify the investment. Solar Parks more cost effective towards following: • potential limited physical availability of water, • approvals process for accessing water supplies, and • cost of supply infrastructure. Dependent upon the technology type being used Recommendation 5About NSM EPC in India Objective 3 Appendix [8]33
  • [8] Recommendation 5About NSM EPC in India Objective 3 Appendix Cost – Benefit analysis of Solar park (300 MW) • Mahindra would be the sole ONM contractor — Reduced cost (Man power per MW would reduce) • Over and above ONM contract, cost reduction of 24.6% per 5 MW setup 0 1 2 3 4 5 6 7 EPCsetupcost(CrsINR) Cost is INR 6.36 crores/MW EPC Installation Cost 77% 9% 8% 5% 1% Solar Plant Civil works Evacuation Cost Preliminary and Preoperative Expenses Land Cost for 5 MW plant – INR 4,138 lakhs 84% 6% 5% 4% 1% Cost for 300 MW plant – INR 3,121 lakhs for 5 MW For a solar park, all other costs except ‘Solar Plant’ with get significantly reduced Reduction in overall cost Assuming current tariffs, break-even can be achieved by selling 134 MW in a 300 MW setup 34
  • Recommendation 5About NSM EPC in India Objective 3 Appendix 35 Cost Benefit sheet for Solar Parks in Rajasthan Total Savings 24.57% Break Even point (no. of 5 MW plant) 27 Break Even point (MW) 134 Barren land cost (Lakhs INR) 2 Land requirement for 1 MW (Acre) 4 Cost savings in Civil, Evacuation and preliminary costs 50% Components Cost (Lakhs INR) Components Cost (Lakhs INR) Land and Infrastructure 40 Land and Infrastructure 2400 Fixed costs turnkey Civil and General Works 389.895 Civil and General Works 11696.85 Land and Infrastructure 40 Solar Plant 3180 Solar Plant 157350 Civil and General Works 389.895 Evacuation Cost 312.75 Evacuation Cost 9382.5 Margins Evacuation Cost 312.75 Preliminary and Preoperative Expenses 215.45 Preliminary and Preoperative Expenses 6463.5 Preliminary and Preoperative Expenses 215.45 Total 4,138.10 Total 1,87,292.85 Total fixed costs turnkey 958.095 Margin for Solar plant 159 Effective Cost for 5 MW 3,121.55 1117.095 Fixed Cost 29942.85 Components Cost (Lakhs INR) Components Cost (Lakhs INR) Break Even Point 26.804211 Polysilicon 40 Polysilicon 12000 Total Power (MW) 134.02105 Wafer 50 Wafer 15000 Cell 30 Cell 9000 Module 70 Module 21000 Inverter 30 Inverter 6750 Other 260 Total cost Other 58500 Installation 156 75% Installation 35100 Total 636 Total 1,57,350.00 65.0% 70.00% 75.0% 80% 85.0% 40.0% 32.17% 29.48% 26.78% 24.09% 21.40% 45.00% 31.06% 28.37% 25.67% 22.98% 20.29% 50% 29.95% 27.26% 24.57% 21.87% 19.18% 55.0% 28.85% 26.15% 23.46% 20.76% 18.07% 60.0% 27.74% 25.04% 22.35% 19.65% 16.96% Total returns for 5 MW plant (Contribution) Total cost for 5 MW Total Cost for 300 MW Break Even analysis Cost (Lakhs INR) Only 5% for cost reduction for developer Synergy - Cost reduction Cost savings in Civil, Evacuation and preliminary costs Synergy - Cost ReductionSensitivity Analysis Solar Plant Cost for 1 MW Solar Plant Cost for 300 MW
  • Solar Plant To Meet State Power Deficit Proposed Pertinent Operating Steps For Such a Farm • A rapid in-principle allocation process that gives initial certainty to developers. • Automatic loss of allocation if financial closure is not achieved in a reasonable timeframe. • Permission to construct immediately following financial closure but contingent on lodge of bonds to allow for site clearance if the project is not completed. • Automatic loss of allocation if the project is not constructed in a reasonable timeframe. Source: NREL Website [8] Recommendation 5About NSM EPC in India Objective 3 Appendix 36
  • Appendix [8] AppendixAbout NSM EPC in India Objective Recommendations 37
  • Diversification In Emerging Markets: Why The Conventional Definition And Strategy May Not Be Applicable Diversification In Emerging Markets In developed markets, unrelated diversification is thought to be value destroying Diversification in Developed Markets Emerging markets have different dynamics as compared to developed markets and thus diversification and synergy have different connotations Diversification is justified if • The company is the best owner of the business • There is a synergy between existing and new businesses Diversification is justified because • Large conglomerates typically have the resources and relationships needed to navigate the maze of government regulations • Large conglomerates are more attractive to potential managers because they offer greater career development opportunities • Large conglomerates have economic benefits that don’t exist in the developed world, especially in infra sector Source: McKinsey on Finance Number 42, Winter 2012 The diversification decision should not be based on the synergies only. Mahindra EPC can diversify based on the opportunities available [8] RecommendationAbout NSM EPC in India Objective Appendix 38
  • [8] RecommendationAbout NSM EPC in India Objective Appendix Potential targets Indian Suppliers to EPC Companies Potential targets for acquisitions, JVs, and technology transfer Mahindra EPC generating synergies from backward integration Moser Baer Solar Semiconductor Lanco Solar BHEL BEL Titan Energy IndoSolar Topsun Solar PLG Power Source: Green World Investor 39
  • 13% 12% 11% 10% 9% 8% 7.5 9.20% 9.70% 10.30% 10.90% 11.50% 12.10% 7.75 10.00% 10.60% 11.20% 11.70% 12.30% 13.00% 8 10.80% 11.40% 12.00% 12.60% 13.20% 13.90% 8.25 11.60% 12.20% 12.80% 13.40% 14.10% 14.80% 8.5 12.40% 13.00% 13.60% 14.30% 15.00% 15.70% 8.75 13.30% 13.90% 14.50% 15.20% 15.90% 16.60% 9 14.60% 15.00% 15.70% 16.40% 17.20% 17.90% 9.25 14.90% 15.50% 16.20% 17.00% 17.70% 18.50% 9.5 15.70% 16.40% 17.10% 17.90% 18.70% 19.50% Interest Rate Tariff(Rs/unit)Further reduction in bid prices is not sustainable at current interest rates Sensitivity analysis of project IRR with Tariff and Interest Rates Source: Crisil Research [8] RecommendationAbout NSM EPC in India Objective Appendix 40
  • Module manufacturers entering EPC space may pose a serious threat to Mahindra EPC business in future Threat from local module manufacturers entering EPC space • Vikram Solar – Projects pipeline of 40MW for module supply and EPC under batch two of phase one of the NSM and the Gujarat Solar Policy. • Lanco Solar – Providing EPC for Gas Authority of India Ltd. (GAIL), is expected to use its own modules. • Enfield Infra-structure is developing a 10MW project under the batch two of phase one of the NSM and is expected to use its own modules that are being manufactured under the name of Sonthalia Group. Source: India Solar Compass, BridgeToIndia, October 2012 edition; Indian solar manufacturers ask for anti-dumping duties of up to 200%, PV Magazine; Business Today [8] Recommendation 1About NSM EPC in India Objective Appendix 41
  • A picture of the portal which is used to trade REC’s : CEPC for Renewable Energy Certificates [8] AppendixAbout NSM EPC in India Objective Recommendations 42
  • CurrentState PowerDeficit Magnifiesthe roleOfSolar FarmsinThis Regard Source: IndiaStat.com, electrical power datasheet’2011 [8] AppendixAbout NSM EPC in India Objective Recommendations 43
  • Gujarat Case Study • 963MW of solar PPAs had been executed but only 175 MW could meet the deadline of Dec 31, 2011 for achieving COD • 128 MW awaiting transmission connectivity – no deemed generation in PPAs • Also failed to forecast volatility of solar panel prices Lost Opportunity: Risks that were ignored or not appreciated: • Failure to achieve financial closure • Logistics issues were not appreciated - land aggregation and transmission • Completely overlooked the significant financial impact on retail tariffs EPC Risks identified: • Land aggregation • R&R and local community sensitivities • Land registration and conversion • Financing • Technology and Execution risks were minimal [8] AppendixAbout NSM EPC in India Objective Recommendations 44
  • DCR : A Proven Model [8] AppendixAbout NSM EPC in India Objective Recommendations 45
  • Solar Related Data Collection Model for Enhanced Efficiency USER Username Password Remember me Log In JOURNAL INFO Editorial Board Contact Us READERS Make a Search View Contents Recommend to a Friend/Library AUTHORS Submit an Article Guide for Authors EDITORS Guide for Editors Invitation for English Language Editors REVIEWERS Guide for Reviewers HOME ABOUT LOG IN REGISTER NEWS AND EVENTS SEARCH CURRENT ISSUE ALL ISSUES AEC FORUM Home > Linking Detailed Solar Collection Data to a Parametric Model for Accurate Performance Analysis Throughout the Design Process Title: Linking Detailed Solar Collection Data to a Parametric Model for Accurate Performance Analysis Throughout the Design Process Authors: Anton C. Harfmann (School of Architecture and Interior Design, University of Cincinnati, Cincinnati, Ohio 45221, United States). Issue: Vol 1, No 1 (2012) Pages: 37-46 Section: Research Paper DOI: 10.7492/IJAEC.2012.004 Citation: Anton C. Harfmann (2012). "Linking Detailed Solar Collection Data to a Parametric Model for Accurate Performance Analysis Throughout the Design Process." International Journal of Architecture, Engineering and Construction, 1(1), 37-46. Publisher: International Association for Sustainable Development and Management (IASDM) Abstract: The paper summarizes the efforts of an elective design studio in which a parametric model was linked to detailed energy output data in order to provide accurate feedback about building performance throughout the entire process of design. Photovoltaic collection data was downloaded from the National Renewable Energy Laboratories (NREL) and linked directly to alternative configurations of designs produced in SolidWorks. Microsoft Excel provided the direct link between the model and data where students were able to augment the SolidWorks Excel output to include calculations that referenced the NREL data. The program from the 2009 Solar Decathlon competition served as the program for the investigation and provided a constraint-rich environment for developing parametric models. The class also utilized morphological analysis to identify 13 different forms to develop and analyze. The resulting parametric models and analysis provided a focused introduction to design methods, parametric modeling and solar energy design. Keywords: Parametric model, PVWATTS calculator, SolidWorks Excel output, building performance. Full Text: PDF HTML DisclaimerCopyright © 2011 - 2012 by IASDM IJAEC - Linking Detailed Solar Collection Data to a Parametr... http://www.iasdm.org/journals/index.php/ijaec/article/view/39 [8] AppendixAbout NSM EPC in India Objective Recommendations 46
  • Cost Efficiency [8] AppendixAbout NSM EPC in India Objective Recommendations 47 BOS Cost Reduction Operation Cost Reduction
  • Other Recommendations • Mahindra EPC can tie up with foreign companies to acquire new technologies and build competencies in the domestic market • Mahindra EPC can experiment with new BoS in initial years. Role of BoS can be a crucial one for plant efficiency • Mahindra EPC can also look for EPC opportunities abroad to develop a comprehensive domestic strategy with learnings from foreign exposure. • Mahindra EPC can experiment with the best EPC models prevailing globally – LSTK, BoS-EPC, etc. – to finalize upon the best EPC model for India. [8] AppendixAbout NSM EPC in India Objective Recommendations 48
  • Thank You [8]49