4Company Profile – Varroc Group Headquartered in Aurangabad, IndiaLeading Indian supplier of Electrical, Metallic and Polymer components and sub assemblies for 2 wheeler and 4 wheeler industryUSD 1.2 Billion annual sales; growing at over 20% annually for the past decade10,000+ direct employees, including engineers globally31 manufacturing facilities and 6 engineering centers globallyServes all major OE vehicle manufacturers in India and abroad.Among top 3 automotive suppliers in India4
5Varroc Group – Global Footprint and Support Varroc is well positioned to support Customer growth in all markets.GermanyUnites States of AmericaSlovakiaCzechUnited KingdomItalyChinaFranceMexicoIndiaVietnamGuatemalaNigeriaEgyptGloballyAngolaDivisionsNumber of PlantsPolymer9Electrical12MetallicIntegrated Plant1Engineering Centers6LocationPlantR&DCenterIndia213Europe8South East Asia1 -US-
9Varroc Renewable Energy Mission Varroc Renewable Energy Mission targets to achieve 20% of its power requirement through Renewable Energy by 2016Estimated Power requirement of Varroc Group by 2016 will be 100 MW20 MW of this power shall be through renewable energyAchievements of Mission till 20138 MW of power from Wind energy5 MW of power from Solar energy (operational Dec 2013)Other activities under green missionPlanting & distributing SaplingDistribution of SeedsWe are focused toward the Eco-Green concept to create a pollution free environment for our young generation.Need for Action against Climate change8 MW Wind5 MW Solar under Installation, & another 7 MW in pipeline
11India’s Energy Challenge In next 12 years India’s electricity requirement to grow 2.5 timesElectricity shortage estimated at GWShortageAccessSecurityClimate ChangeDemand400 Million people still without access to electricityClimate Change is also an important issueEnergy Security is most important for any IndustryAs electricity need increases in future, demand & Supply gap will increase furtherIndia is dependent on oil imports for 80% of its demand
12Indian Power Sector (30 June 2013) India is still dependent mostly on Thermal power which uses Coal & Gas for Generation, this makes price factor dependence not only on internal but external factors as well. Like, Recent tension in Syria is pushing up Crude prices.Thermal1,53,848, MWHydro39,623 MWNuclear4,780 MWRenewable27,541 MW(Source: CEA Annual Report)
13Renewable Power Capacity (30 June 2013) Past Focus AreaCurrentFocus AreaRenewable Installation is increasing every month. Increasing more than 15% every year, which proves that Power generation through Renewable forms is Sustainable.Originally we invested in Wind, now we are investing on Solar, Initial study of Solar proves that in log term Solar is more beneficial over Wind, which will be followed in coming slides.Wind19,228 MWSmall Hydro3,630 MWBio3,000MWSolar1,686 MW(Source: MNRE)
14Energy Scenario-Maharashtra Demand – Supply Scenario in MW at the Time of Peak DemandParticularDemand [MW]16,79217,26617,87918,16819,105Availability [MW]12,46012,57813,50414,35315,634Shortfall [MW]4,3324,6884,3753,8153471In Maharashtra region also, there has been consistent differential between Demand & Supply. Though it is very important to know that Maharashtra is amongst the leading states to invest in renewable energy. This is how you can see the gap between demand & supply is somewhat reducing.(Source: CEA Monthly Report)
16Why Choose Renewable Energy Corporate Social Responsibility (CSR) InitiativeSustainable business model- Eliminate long term impact of energy cost on current businessExcellent Investment opportunity considering government Incentives (Project IRR 20-25%)Improves Infrastructure & Groups visibility in rural areas & helps evaluating new locations to spread businessRenewable energy clean form of energy & it is sustainable as itIncreases energy security for usHelps us reduce our Energy cost. Our Current energy cost is about 5% of over cost, with renewable energy we target to reduce it to 4%Excellent Investment opportunity with a good IRR.
17Wind Energy Vs Solar Energy ParameterWindSolar PVBasicDependent on Wind(Resource: 1,700 TW)The Ultimate Energy Source(Resource 6,500 TW)SiteSea shores or LandOn Land or RooftopTechnologyWind TurbinesForecastNo Forecast on availabilityPredictable & Reliable OutputUseConsidered as Intermittent PowerOptimized use possibleOperation and MaintenanceHighAlmost NegligibleSet-up time8-10 months3-5 monthsWarranty5 Years Warranty25 years warrantyRequired Area (Acre / MW)30-404 to 5Generation cost over life of plantINR 4-5 / unitINR 5-6 / unitSelling Price of Generated PowerINR 4.5 to 6.3 / unitINR 12.3 to 16.4 / unitOver all comparison between wind & Solar are shown here, Solar power looks more reliable, predictable, scalable & quick to install.Considering the REC route the unit selling cost of Power generated by Solar is way higher than Wind. REC trading is applicable for both Wind & Solar.
19Steps for entering into Solar power Understanding the Scheme / policy under which plant will be set-upFeasibility Study & Risk ManagementIdentification of siteIdentification of Technology & EPC partnerProject Financing & ExecutionMost important part of Solar Energy is to understand under which mechanism you want to set up your plantNext important thing is Choosing the best technology. There are many alternatives available, with huge price variations, Solar Panel have to last minimum 25 years so the quality is very important, & the technology partner should have a solid track record with history of atleast 25 years.
20Policies in India for Large Scale Solar Project There are 3 Schemes available.1. Under JNNSM by Signing Preferential Tariff PPA with NVVN2. Under Preferential Tariff PPA with State Government3. As Independent Power Producer (IPP) in REC MechanismScheme 1 & 2 are time bound, & you can bid for them in a limited period. It brings you in competition with large organizations & hurt your Project returns.
21Solar Feasibility in India > 300 Sunny Days in India> 5-6 KWH/ Sq Meter / Day - IrradiationGovt Initiatives & IncentivesIndia is most suitable place for setting up Solar power plants. Compares to UK & Germany Plants installed in India can generate at least 25% more units per year.
22Risk Management & SWOT Analysis Strength•Plenty of Sun Shine in Maharashtra• REC Benefits• No raw Material Cost• India’s solar potential among highest in the World and barely a fractionof it has been exploited• There is no pollution or wastage resulting from its use• Very low Operating and Maintenance costs• There is no pollution or wastage resulting from its use.Weakness• Needs Greater support from Govt.• Lack of technical supports for remote locationsOpportunity• Increasing energy requirement of the country• Reduction of cost expected in futureThreat• Technological Challenges (Storage facility)• Lack of cooperation from local DISCOMThese are results of our Risk Management for Solar Power Project, & encouraged us to move ahead with this project.Though there are some risks, but a strong will & determination will help you sail through them.
23Identification of Site Key Parameters of a good site:Good Solar Irradiance throughout the year (Data from NASA, Meteonorm, MNRE)Average temperatures throughout the yearFirst year generation expectationsProximity to gridWater availabilityRoad ConnectivityLoad bearing capacity of landSTFI Hazards (Storms, Tempests, Floods, Inundation)Though Solar irradiance is almost similar all over India, Average temperatures, & proximity of plant to grid is most important as it will help in more generation & minimize the losses.
24Site Evaluation Results of Sakri S No.DescriptionSakri1Solar Irradiation5.49 KW/ m22Average Daily temperatures25-40 deg C3Grid Availability66 KV or above4Water AvailabilityGood5Road ConnectivityExcellent61st Year Generation (units)8,000,000Just to add here that Sakri site had been rated best site in Maharashtra by Mahagenco & KFW Germany. Mahagenco is establishing a 125 MW solar plant in Sakri.
25Technology Evaluation S No.Evaluation CriterionCrystallineThin FilmMonoPolyA-siCdTeCIGS/CIS1Efficiency (%)16-18%14-16%7-9%8-10%10-12%2Performance Under Heat (degradation)5-6%4-5%9-10%3Required Area (m2 / KWp)4-55-68-97-86-74Output per Year per MW (Indian Climatic Conditions)1.551.618.104.22.168Cost (USD/Watt)0.850.750.70.86Technology Maturity (Years)>40~10-20~8-10O&MModerateHigh7Weight(Kg/watt)0.0940.168Market Share(%)30%60%7%9Payback Period10Life>25>25 yearsUnder EvaluationThin Film technology is cheaper than Crystalline, but there is no history of its performance over a period of 25 years. Crystalline on the other hand is 40 years old & therefore more reliable. There has been reports from some thin film manufacturers that thin film cannot work well under high temperature countries like India. Thin film generates more power initially but in long term it degrades.
26Identification of EPC Partner - Functions throughout technology value chainDiversified business for 25 year Warranty fulfilmentsHas own Solar power plantExperience & track recordAccess to local execution teamIt is very important that you know the source of actual ingredients being used in Solar Panels you choose. This will ensure that your module will generate well over a period of 25 years. Once your technology partner is active in whole vertical production chain, then only he will know the quality assurance policy at each stage. 2nd most important is local execution team, as they can speed up your installation process without damaging the equipments during Installation
27Varroc EPC partnerInetest Technologies India from Chennai along with Anukul Power Engineers from AurangabadInetest has technology from AUO, a listed company in NYSE, with business in Flat panel displays & Solar.AUO has Polysilicon & WaferTechnology from Japan while Cell & Modules made in Taiwan & Malaysia.AUO has own 10 MW roof top project in TaiwanAnukul Power Engineers has vast experience in Electrical Power Transmission & distribution Erectioning, commissioning in MaharashtraAnukul has Installed many sub-stations, manyKms of Transmission line in MaharashtraOur EPC partner Inetest Technologies along with Anukul Power from Aurangabad is a very good combination for Solar Power Projects.With Technology Know0how of Inetest & local work experience & contacts of Anukul they complement each other very well.Pic from AUO Japan plant during Vendor Evaluation
28Project Financing & Execution Project Financing to be considered due to unstable INRROI & cashflow preparationFinance available at low interest cost from government & international bodies, but not easyIdentification of Project teamGovernment ApprovalsApproval for Project from concerned body (MEDA for Maharashtra)Signing of Power Purchase Agreement with Discom (Mahagenco or MSEGCL)Approval from substation for erection of Transmission line & grid connectionApproval from MNRE for concessional dutiesPrepare project execution roadmap & progress monitoringA proper team has to be established for the project to be successful. All stake holders play very important role in the successful execution of the project. In the project execution process, getting approvals form concerned government bodies is not easy, & can considerably delay the project.
30Other Green Initiatives Audit for Energy optimization by third partiesAudit for Power Quality improvement by third partiesInstallation of Solar Street lights in existing plantsInstallation of ABT Meters with 0.2S AccuracyUse of transparent sheds for day light utilizationZonewise power utilizationMaintaining of Power factor
31Way Forward…. Solar parks Solar pumps Solar Car parking Solar Roof Top SystemsSurvey of all plants already done for Roof Top Solar Power PlantsPotential identified of about 2 MW across all plant rooftops including sheds, car parking etc.To be rolled out in a phase wise manner with 1st phase starting in 2014.Increase footprint in Ground mounted projectsDouble the capacity from current 5 MW to 10 MW by 2018.Solar Street lights in all production plantsSolar Street light
32Thank You! M P Sharma firstname.lastname@example.org