Rsm GC Advisory RE Power Contracting & Trading - ver3

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Renewable Energy (RE) Project Developer …

Renewable Energy (RE) Project Developer

Investors seeking investment in Renewable Energy projects

Industrial / commercial energy users – using renewable energy or contemplating using RE

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  • 1. Renewable Energy (RE) Power Contracting & Trading
  • 2. Target Clients  Renewable Energy (RE) Project Developer  Investors seeking investment in Renewable Energy projects  Industrial / commercial energy users – using renewable energy or contemplating using RE 2
  • 3. Benefits of RE power procurement Carbon neutral power sourcing Higher grounds on sustainability roadmap RPO compliance with additional outflow Single vendor and minimal hassles Cost Savings 3
  • 4. Key Challenges in RE power contracting (sale/purchase)  For RE generators – formulating appropriate strategy for power off-take arrangements  Multiple models of power sale to choose from - preferential tariff, REC based, captive, group captive, third party sale  Identifying buyer/seller for captive or third party sale; Negotiating power purchase agreements  Obtaining approvals (eg. Open Access), Obtaining billing and settlement support. 4
  • 5. Typical Process for RE Power tie-up Term Sheet • Intent to sell / purchase • Qty, period & price LOI • Matching buyer/ seller • High level terms Set-up • Power Purchase , Share holding, etc. • ABT meter, etc. Agreement • Open access • Regulatory filings Approvals Billing & Payment Power Generation Credit Adjustment Open access charges 5
  • 6. Our Services 6
  • 7. Overview of Service Renewable Energy Project Assessment Renewable Energy Contracting • For Project Developers • For RE power users Power Resources and Cost Optimization • For Project Developers • For RE power investors • For Project Developers • For RE power users 7
  • 8. What We Do  Renewable Energy Project Assessment ♦ Provide project development services for wind, biomass, bio-gasification, waste-to-energy and solar projects including site identification, assessment, fuel/resource assessment, regulatory approvals, contract management, project management and supervision ♦ Advise investors to conduct due diligence in acquisition of the operating renewable energy assets  Renewable Energy Contracting ♦ Client identification for third party/captive power sale from wind, hydro, biomass and solar projects ♦ Open access approvals, billing & settlement support  Power Resources & Cost Optimization ♦ Advise clients on WHEN to buy / sell WHICH power at WHAT price. ♦ Analyze the energy mix and viable alternatives with respect to cost & convenience of implementation ♦ Facilitate large consumers to procure renewable power to meet their sustainability / RPO / cost optimization needs. ♦ Facilitate in executing sale / purchase of power (renewable / non renewable) through following modes:  Power Exchange  Third Party (Power Purchase Agreement (PPA), Open Access approval, etc)  Group Captive (Share-holding agreement (SHA), PPA, Energy Wheeling Agreement (EWA), etc ♦ Power transaction support (conventional or green power from exchange, bilateral or captive mode) 8
  • 9. Renewable Energy Project Assessment  Project evaluation and feasibility assessment for renewable energy projects  Due diligence and financial analysis of renewable energy projects including acquisition support  Performance evaluation of projects - As-is analysis, review of O&M plan and ROI for upgrades  Software platform for wind turbine portfolio management solution ♦ Data integration, O&M Process Mgmt, Performance improvement, mobile integration  Regulatory advisory and policy implementation 9
  • 10. Renewable Energy Contracting  Policy & Regulatory analysis for renewable energy power sale in various states of India ♦ Expected per unit realization, open access charges, major consumer categories, challenges, possible & recommended contracting structures, etc  Client identification for third party/captive power sale from wind, hydro, biomass and solar projects  Advising project developers/ investors on appropriate share structuring, SPV creation and tax impacts for group captive sale  Contractual negotiations and execution of major agreements & statutory documents ♦ Power Purchase Agreement, Share Holding Agreement, Energy Wheeling Agreement, Open Access NOC, etc  Support in injected power credit allotment, adjustment in electricity bills, and settlement as per contract 10
  • 11. Developing Power Resources & Cost Optimization Plan  Power resource options ♦ Local DisCom, Captive Power Plants, Power Exchanges, Third Party Contracting, Group Captive, etc  Each source of power has some associated fixed and variable cost Source Fixed Cost Variable Cost DisCom Demand Charges Energy Charges, FAC, ToD charges, etc. Power Exchange Membership fees, ABT meter, etc Market clearing price, brokerage, etc 3rd Party Sale ABT meter, RTU, BG, etc Agreed tariff, wheeling charges & losses, CSS, other open access charges, etc Group Captive Equity investment, ABT meter, etc Agreed tariff, wheeling charges & losses, No CSS  Selection depends upon the State in which plant is located ♦ ♦ ♦ ♦ The prevalent pricing on the exchanges for the region during various time slots Power situation (energy charges, power cuts, grid availability, RE policy, etc) Open access policy & Implementation challenges Connectivity with the Discom ( Contract Demand, Connection voltage, type of feeder line, metering, etc)  Strategy will determine when to buy or sell which power at what price 11
  • 12. Developing Power Resources & Cost Optimization Plan… Cont We undertake following 3 steps to develop & deploy Power Resources & Cost Optimization Plan :  Analyze Electrical Energy Mix ♦ Current & projected electrical energy mix: Distribution company, Open Access, Exchange, Bilateral, Captive sources ♦ Compute the per unit cost of power through each source separately  Analyze alternatives ♦ Alternative options for sale & purchase of power  Alternate use of current mix (e.g. power sale from CPP & replacement with cheaper options, etc.)  Additional options (e.g. power purchase from exchange, third party or group captive, etc.) ♦ Transaction cost, Per unit landed price in each case of power sale or purchase ♦ Study of various electrical energy mix scenarios with regards to their implementation ♦ Finalize the power resource optimization plan  Power Marketing & Sourcing ♦ Facilitation in sale / purchase of power through exchanges, 3rd party bilateral (renewable / non renewable), group captive, etc ♦ Execution of PPAs, EWAs, SHAs, open access approvals, setting-off of open access units in the bill, etc. 12
  • 13. Case Study HT Industrial Consumer - 46MW requirement (~394 Million Units) Old structure: Discom (140MU) & Captive - Coal & WHR (263MU) Change: Replacing 25% of Discom power by wind power under TPS & Group Cap – wind New Structure: Discom (105MU), Captive - Coal & WHR (263MU), Wind (35MU) Old Structure Particulars Discom Captive TPS - Wind w/o RPO GCS - Wind with RPO RPO (REC procurement) New Structure Total Cost Total Cost MW Cost INR/u MU (INR ’Mn) MU (INR ’Mn) Savings 16 5.75 140 805.9 105 604.4 30 3.85 263 1011.8 263 1011.8 0 5.25 0 0.0 22 115.0 1.67% 0 5.75 0 0.0 13 75.6 1.5 13 19.7 0 0.0 403 1837.4 403 1806.8 30.7 13
  • 14. Advantages RSM GC  Thought leaders ♦ Participated in regulation formulation (states as well as central) ♦ Invited to speak at major power related trade fairs, seminars, conferences & workshops  Helped in capacity building exercise in major states for open access  Advised IPPs on power sale strategy at the stage of finance raising to operations  Advised few of the largest industrial groups on power procurement strategies for their facilities across states  Advised one of the largest business groups on achieving carbon neutrality through RE procurement options  Reduced power procurement cost of few large commercial establishments by over 25% 14
  • 15. Experience  Experience with over 8000 MWs power project portfolio ♦ Wind projects of over 2000 MWs across India ♦ Over 350 MW of REC projects across India  Client list includes some of the largest IPPs & CPPs in India ♦ Tata Power, Lanco, GVK, GMR, Renew, GreenKo, JSW, Mahindra, etc.  Broad spectrum of technological expertise ♦ Wind, solar, hydro, biomass, Waste to Energy, etc.  Executed innovative contract structures ♦ Some of first third party sale contracts for renewable energy project  Experience in project finance and project evaluation for renewable energy projects 15
  • 16. Select Clients 16
  • 17. Contact Us Mumbai – Mr. Rameez Shaikh Chennai – Ms. Priya Ranganayaki 5th floor, Great Social Building 60, Sir Pherozeshah Mehta Road, Fort Mumbai 400001 E-3, 4th Floor, "RM Towers“ 108 Chamiers Road, Nandanam Chennai 600018 Phone: +91 22 2266 3201/3301 Mobile: +91 99200 33866 Email: Phone: +91 44 42167331 Mobile: +91 99625 26876 Email: 17
  • 18. Advantage RSM GC Advisory Leadership Team • Leadership team with expertise and extensive consulting experience, more than 500 sustainability service offerings; developed over 250 emission reduction projects with a potential of >400 million CERs; assisted and advised over 8000 MW power project portfolio & over 2000 MW wind power projects, over 350 MW REC projects; delivered value of over US$ 500 Million to businesses in India Policy Formulation • Active participation in policy formulation and thought leadership Strong Track Record Diverse Work Experience • Strong track record of project delivery, combined with risk mitigation and structuring capabilities • Working experience in diverse geographies & sectors, and a potent combination of technical & financial resources 18