Solar development & rooftop solutions BOO/BOOT

Transcription

1 1 Solar development & rooftop solutions BOO/BOOT

2 Executive Summary 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 2

3 Indian rooftop market is expected to grow more than 100%; govt. policies & drop in equipment prices are key enablers Govt. Target: 40 GW by 2022 Annual Rooftop target capacity (MW) ,000 Conservative estimate Business as usual , , until 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 Margin BoS Inverter Module ,53 25,16 5,24-5% ,88 5,74 20,83 19, EPC Cost In MINR/MW ,52 5,41 20,56 20, Mandatory installations (eg. State of Haryana) 34,91 33,09 33,16 30,64 29,82 Tax incentives for investors Govt. of India has set a target of 40 GW by 2022 through solar rooftop Source: MNRE, Industry Research 3

4 Sharply increasing grid tariff has made commercial & industrial consumers in many states looking out for solar power Tariff in INR/kWh Maharashtra Karnataka Uttar Pradesh Industry Commercial Andhra Pradesh Tamil Nadu Haryana Source: State tariff orders, Bridge to india 4

5 Pay per use: BOO/BOOT model for Rooftop/Co-located Clients SYSTEM ARRANGEMENT CONTRACT Rooftop Captive consumption Applicable for: Advantages Highlights M M 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 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 tenor from 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 PPA Power Purchase Agreement; LCOE Levelised Cost of Electricity 5

6 Private Solar parks under Open Access for larger capacities and to solve locational constraints SYSTEM ARRANGEMENT CONTRACT Private Solar Park under Open Access Applicable for: Advantages Highlights M Customers with medium to high energy demand (5MW to 50MW), with low roofspace Plant construction on Fortum owned/leased land Customer to draw contracted energy from applicable discom through Open Access 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 PPA tenor from 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 Fortum to own, operate, maintain solar plant. M M M Customer to pay solar energy bill monthly to Fortum, as per agreed PPA 6

7 Business Case: 01MW Solar on Production Roof Parameter Solar consumption Location Solar Yield Contract Demand Shadow Free Rooftop Requirement Detail Captive, Co-located on available rooftop Maharashtra, India kwh/kwp/day > 1500 KVA 10,000 sqm Current Grid Tariff, MWH INR Proposed Solar Plant Electrical energy from Solar, Year 1 Power Evacuation 01 MW Rooftop mounted / Ground mounted 1450 MWH 415V, LT Operational Days per year > 300 Key assumptions Solar, Grid escalation pegged at 3% Y-o-Y for 10 years 7

8 Typical saving estimates of ~ 120 mn over 25 years from a 1 MWp solar plant (assuming 10% diesel in energy mix) 4.0 Projected savings from diesel (Rs. Mn) Projected Savings from Grid (Rs. Mn) Total Savings Year Projected Grid Tariff (Rs/KWh) Proposed Solar Tariff (Rs/kWh) Solar Energy (MWh) Savings (Rs mn) Projected Diesel Price (Rs/kWh) Diesel savings (10%) (Rs mn) 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

9 Sustainability: Key Pointers 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 cleaning cycles per year, depending on location/dust factors. 9

10 This is Fortum 2016

11 Fortum Forerunner in clean energy 11

12 Transition towards Solar Economy is ongoing 12

13 DEI RWE Drax SSE CEZ Vattenfall EDP E.ON A2A Enel Gas Natural F EnBW ENGIE Dong Energy Iberdrola Koko Fortum PVO EDF Verbund Fortum EU Statkraft Fortum's carbon exposure among the lowest in Europe Fortum s specific emissions of the power generation in the EU in 2015 were 21 g/kwh and in total 166 g/kwh g CO 2 /kwh electricity, ,200 1, % 64 % 400 Average 313 g/kwh % of Fortum s power generation in the EU CO 2 -free 64% of Fortum's total power generation CO 2 -free The figures include only European generation except Fortum total, which includes Fortum s production in Russia Source: PWC, Novembre 2015, Changement climatique et Électricité, Fortum Figures:

14 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 Finnish households 11.7% Other Finnish investors 9.6% Finnish financial and insurance institutions 2.7% Finnish State 50.8% Sales: EUR 3.5 billion Balance sheet: EUR 23 billion Comparable operating profit: EUR 0.8 billion Personnel 31 Dec 2015: 7,800 Investors outside Finland 25.2% Fortum's shareholders 31 January 2016 Figures: 31 January

15 Fortum worldwide 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 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 India Power generation capacity 15 MW Expert services globally Figures: 2015 *Joint venture AB Fortum Värme samägt med Stockholms Stad 15

16 Fortum's power and heat production by source Fortum's power generation in 2015 Fortum's heat production in 2015 Hydro power 32% Natural gas 31% Natural gas 61% Waste 1% Biomass 2% Coal 4% Nuclear power 30% Peat 1% Oil 1% Waste 7% Heat pumps, electricity 7% Biomass 8% Coal 15% Total generation 77.1 TWh (Generation capacity 14,331 MW) Total production 39.7 TWh (Production capacity 20,502 MW) 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). 16

17 Fortum is expanding into emerging markets in India since February 2012 Awarded for 1 st greenfield solar plant worldwide in Kapeli June 2013 Amrit Acquisition Kapeli project execution Dec Kapeli commissioning Bhadla project execution 2017 Bhadla /Pavagada commissioning MW Rajasthan 25 yrs PPA with NVVN 10 MW Madhya Pradesh 25 yrs PPA with SECI 70 MW / 100 MW Rajasthan/Karnataka 25 yrs PPA with NTPC CSR activities in villages near Amrit, Kapeli plants - 33 persons (26 head office, 7 Site) 17

18 Thank you!