solar development & roof- top solutions...
TRANSCRIPT
Solar development & roof-top solutions – BOO/BOOT
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Executive Summary
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Solar power is an economically viable alternative to grid power & diesel power• Commercial & Industrial power consumers pay higher tariff as compared to cost of solar power in many
states• Unreliable power situation force consumers to opt for multiple back up solutions; increasing LCOE
(levelised cost of energy) of the consumers• Sharp decline in solar panel costs driving solar power cost to grid parity
Business model to serve both captive & third party consumers• Rooftop projects to be connected at LT level; No open access requirement• Private Solar parks to serve larger off-takers with open access, in policy driven Indian states
Benefits with Fortum:• Huge experience in build, own and operations of >35000 MW of Power plants worldwide, across various
energy technologies. • High emphasis on equipment selection, contractors, EHS, code of conduct & sustainability with all our
internal & external partners and processes• Ability to raise finances at competitive terms & shorter timelines, hence no impact on project timelines• Strong balance sheet support to scale up the business
Indian rooftop market is expected to grow more than 100%; govt. policies & drop in equipment prices are key enablers
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-
400
800
1,200
1,600
2,000
until 2014 2015 2016 2017 2018 2019
Residential Industrial Commercial
Government taking many steps to grow the rooftop market:
• Net metering policies introduced by many states
• Interest rate subvention scheme, supported by KfW & ADB, managed by IREDA, to reduce lending cost to less than 10% p.a
• Greater debt financing support from bankers & NBFCs
• Mandatory installations (eg. State of Haryana)
• Tax incentives for investors
Govt. of India has set a target of 40 GW by 2022 through solar rooftop
9 000
8 000
7 000
6 000
5 0004 800
200
2021-222020-212019-202018-192017-182016-172015-16
Annual Rooftop target capacity (MW)
Govt. Target: 40 GW by 2022 Conservative estimate – Business as usual
34,91 33,09 33,16 30,64 29,82
25,1620,83 19,99
20,56 20,80
6,53
5,88 5,74 5,52 5,41
5,24
-5%
2016
59.53
3.50
2015
60.72
4.00
2014
63.11
4.22
2013
64.71
4.91
2012
71.84Margin
Module
Inverter
BoS
Source: MNRE, Industry Research
EPC Cost In MINR/MW
Sharply increasing grid tariff has made commercial & industrial consumers in many states looking out for solar power
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2
4
6
8
10
12
2009 2010 2011 2012 2013 2014
Maharashtra
2345678
2009 2010 2011 2012 2013 2014
Karnataka
Industry Commercial
2345678
2009 2010 2011 2012 2013 2014
Andhra Pradesh
2345678
2009 2010 2011 2012 2013 2014
Tamil Nadu
2
3
4
5
6
7
2009 2010 2011 2012 2013 2014
Haryana
2
3
4
5
6
7
2009 2010 2011 2012 2013 2014
Uttar Pradesh
Source: State tariff orders, Bridge to india
Tariff in INR/kWh
Pay per use: BOO/BOOT model for Rooftop/Co-located Clients
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M
M
CONTRACTSYSTEM ARRANGEMENT
Rooftop – Captive consumption Applicable for:
Customers with low to medium energy demand (100kW to 5MW), depending on roof-space /land available
Shadow free metal/RCC roof or land to be provided by customer at no cost lease to Fortum for Solar plant construction
Customer to consume 100% generated energy. Deemed Generation applicable
Fortum to own, operate, maintain solar plant for PPA* duration .
Fortum to bill and client to pay on monthly basis for per unit energy generated from solar plant
Advantages
No upfront Capital Investment
Client to pay on per unit basis generated by solar plant
Consumption at the point of generation; no major transmission loss
Potential Savings on per unit consumption/bills from day 1
Net-metering applicable in select states, which allows exporting power on non-working days, accrue adjustments in next month electricity bill
No Open Access (OA) permission required – lesser time for installation
PPA – Power Purchase Agreement; LCOE – Levelised Cost of Electricity
Highlights
PPA tenor from 15-25 years with option of asset transfer at pre-agreed price (applicable for Rooftop systems only)
Minimum PPA tenor of 15 years for Rooftop
Plain vanilla arrangement with payment as per energy supply/generated
Fortum’s high emphasis on code of conduct, EHS compliance along with selection of only Tier 1 equipment & contractors; Performance warranty
Private Solar parks under Open Access for larger capacities and to solve locational constraints
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Highlights
PPA tenor from 10-25 years
Plain vanilla arrangement with payment as per energy supply
Fortum’s high emphasis on code of conduct, EHS compliance along with selection of only Tier 1 equipment & contractors; Performance Warranty
CONTRACTSYSTEM ARRANGEMENT
MMM
M
Private Solar Park – under Open Access
Applicable for:
Customers with medium to high energy demand (5MW to 50MW), with low roof-space
Plant construction on Fortum owned/leased land
Customer to draw contracted energy from applicable discom through Open Access
Fortum to own, operate, maintain solar plant.
Customer to pay solar energy bill monthly to Fortum, as per agreed PPA
Advantages
Potential lower LCOE than Grid electricity
Banking of energy to be used to set off higher grid tariff, if applicable
Potential Savings on electricity bills from day 1
No upfront Capital Investment
Business Case: 01MW Solar on Production Roof
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Parameter Detail
Solar consumptionCaptive, Co-located on available rooftop
Location Maharashtra, India
Solar Yield 4.5-5.5 kWh/kWp/day
Contract Demand > 1500 KVA
Shadow Free RooftopRequirement
10,000 sqm
Current Grid Tariff, MWH INR 8500-9500
Proposed Solar Plant01 MW Rooftop mounted / Ground mounted
Electrical energy from Solar, Year 1
1450 MWH
Power Evacuation 415V, LT
Operational Days per year > 300
Key assumptionsSolar, Grid escalation pegged at 3% Y-o-Y for 10 years
Typical saving estimates of ~ 120 mn over 25 years from a 1 MWp solar plant (assuming 10% diesel in energy mix)
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116.0
4.5
20272020
4.4
20242021
4.9
2018 2025
4.9
2022
4.9
2023
4.0
2016
4.0
2026
4.2
4.7
5.04.9
2017 2038
4.6
2036
4.7
2039
4.6
4.8
2034 2040
4.5
4.3
4.7
2033 Total
Savings
4.8
20322031 20372035
4.6
4.9
2030
4.8
5.0
2019 2028
4.7
2029
4.7Projected Savings from Grid (Rs. Mn)
Projected savings from diesel (Rs. Mn)
Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Projected Grid Tariff (Rs/KWh)
8.50 8.76 9.02 9.29 9.57 9.85 10.15 10.45 10.77 11.09 11.09 11.09 11.09 11.09 11.09 11.09 11.09 11.09 11.09 11.09 11.09 11.09 11.09 11.09 11.09
Proposed Solar Tariff (Rs/kWh)
6.50 6.70 6.90 7.10 7.32 7.54 7.76 7.99 8.23 8.48 8.48 8.48 8.48 8.48 8.48 8.48 8.48 8.48 8.48 8.48 8.48 8.48 8.48 8.48 8.48
Solar Energy (MWh)
1450 1440 1430 1420 1410 1400 1390 1380 1371 1361 1352 1342 1333 1323 1314 1305 1296 1287 1278 1269 1260 1251 1242 1234 1225
Savings (Rs mn) 2.61 2.67 2.73 2.79 2.86 2.92 2.99 3.06 3.13 3.20 3.17 3.15 3.13 3.11 3.09 3.06 3.04 3.02 3.00 2.98 2.96 2.94 2.92 2.90 2.88
Projected Diesel Price (Rs/kWh) 16 16 17 18 18 19 20 20 21 21 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22
Diesel savings(10%) (Rs mn)
1.38 1.34 1.44 1.55 1.51 1.61 1.70 1.66 1.75 1.70 1.83 1.81 1.80 1.79 1.78 1.76 1.75 1.74 1.73 1.72 1.70 1.69 1.68 1.67 1.66
Note: The above savings is calculates on generation estimates, estimated industrial tariffs for next 25 years with estimated grid tariff increase of 3% Y-o-Y & PPA tariff option by Fortum. It may vary depending upon the actuals
Sustainability: Key Pointers
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• CO2 replacement: 1275 tCO2 replacement per year by utilizing 1450MWH of electricity
from Solar
• 100% Green Power: Solar is 100% green power
• Local Job creation: 4 FTE for 01MW Solar power plant, for operation and maintenance
services
• Diesel reduction: Reducing electricity contribution from DG sets. Solar to replace some
part of the dirty fuel, which is also polluting & has escalating operating / maintenance
costs
• Water requirement: Approx 30KL of water would be required for module cleaning, with
approx. 16-20 cleaning cycles per year, depending on location/dust factors.
2016
This is Fortum
Fortum – Forerunner in clean energy
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Transition towards Solar Economy is ongoing
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Fortum's carbon exposure among the lowest in Europe
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Figures: 2015Source: PWC, Novembre 2015, Changement climatique et Électricité, Fortum
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Average 313 g/kWh
177
g CO2/kWh electricity, 2014
The figures include only European generation except “Fortum total“, which includes Fortum’s production in Russia
Fortum’s specific emissions of the power generation in the EU in 2015
were 21 g/kWh and in total 166 g/kWh
64 %97 %
64% of Fortum's total
power generation
CO2-free
97% of Fortum’s
power generation in
the EU CO2-free
Finnish State50.8%
Investors outside Finland25.2%
Finnish households 11.7%
Other Finnish investors 9.6%
Finnish financial and insurance institutions 2.7%
Fortum'sshareholders
31 January 2016
Fortum is listed on Nasdaq Helsinki
• Listed since 1998; currently among the
most traded shares on the Nasdaq
Helsinki stock exchange
• Approximately 139,000 shareholders
• Market cap ~12 billion euros
Figures: 31 January 2016
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• Sales: EUR 3.5 billion
• Balance sheet: EUR 23 billion
• Comparable operating profit: EUR 0.8 billion
• Personnel 31 Dec 2015: 7,800
Fortum worldwide
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Expert services globally
Nordic countries
• Power generation capacity
8,484 MW(+ Fortum Värme* 639 MW)
• Heat production capacity
1,974 MW(+ Fortum Värme* 3,891 MW)
• Electricity sales customers
1.3 million
India
Power generation capacity
15 MW
Baltic countries
• Power generation capacity
93 MW
• Heat production capacity
812 MW
Poland
• Power generation capacity
197 MW
• Heat production capacity
1,129 MW
Russia
• Power generation capacity
4,903 MW
• Heat production capacity
12,696 MW
Figures: 2015
*Joint venture AB Fortum Värme samägt med Stockholms Stad
Fortum's power and heat production by source
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Natural gas
31%
Hydro power
32%
Coal 4%Biomass 2%
Total generation 77.1 TWh
(Generation capacity 14,331 MW)
Nuclear power 30%
Fortum's power generation
in 2015
Waste 1%
Total production 39.7 TWh
(Production capacity 20,502 MW)
Fortum's heat production
in 2015
Peat 1%
Waste 7%
Heat pumps, electricity 7%
Oil 1%
Biomass 8%
Natural gas
61%
Coal 15%
Incl. Fortum’s associated company Fortum Värme; power generation 1.2 TWh (capacity 639 MW) and heat production 7.5 TWh (capacity 3,891 MW).
Fortum is expanding into emerging markets – in India since February 2012
• 5 MW
• Rajasthan
• 25 yrs PPA with NVVN
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June 2013
Amrit
Acquisition
Dec 31 2014
Kapeli
commissioning
• 10 MW
• Madhya Pradesh
• 25 yrs PPA with SECI
2017
Bhadla /Pavagada
commissioning
2013 2014 2015 2016 2017
• 70 MW / 100 MW
• Rajasthan/Karnataka
• 25 yrs PPA with NTPC
Kapeli project
executionBhadla project
execution
- 33 persons (26 head office, 7 Site)
Awarded for 1st greenfield solar plant worldwide in Kapeli
CSR activities in villages near Amrit, Kapeli plants
Thank you!