1. Open Access Power Contracting of Solar Power
Rameez Shaikh
(Senior Manager, RSM GC Advisory Services Pvt Ltd)
Suryacon Conference, 04 October, The Westin, Koregaon Park, Pune

2. Agenda RSM GC – Introduction
Open Access – Regulatory Framework for Solar Power
Drivers – Push & Pulls
Requirements & Operational Modes
Transaction Costs & Challenges
Typical steps, process and timeline
Case Study

3. About us – RSM GC Leading player in Energy and Sustainability Services
Led more than 500 sustainability service offerings (CSR, EIAs, LCAs, CDM, Environmental Finance etc.)
Sectors( Energy and Infrastructure, Mines and Metals, Manufacturing, Habitats, Forestry, Agriculture) and
Geographies (India, Srilanka, Thailand, Philippines, Indonesia, Nigeria, Kenya, Tanzania)
Clients (Governments, Multilaterals, UN, Business groups, NGOs)
Delivered more than 500 million USD benefits to clients
Operating across India, South East Asia and Africa

4. RSM International is the 7th largest network of independent audit, tax & advisory firm in the world with over USD 4 billion in fee income and presence in over 700 offices in 103 countries
RSM Astute is the 6th largest accounting and consulting group in India has 1000 people strength and located in 19 offices in 13 cities with delivery capabilities in 90+ cities
Some Clients of RSM Astute

5. RSM GC
What We Do
Energy
Energy Audit / Energy Management Systems [ISO 50001)
PAT Advisory and ESCerts Trading
Renewable Energy Purchase Obligation (RPO) / Renewable Energy Certificate (REC) Advisory and Trading
RE Power Contracting and Trading
RE project management, techno-commercial advisory and due diligence support
Financial, commercial, regulatory & legal advisory support for RE projects
Owner’s Engineer, Quality Assurance, Third party inspection services
Sustainability
CSR – Planning and Implementation Support [Companies Act 2013]
Environmental and Social Due Diligence / ESG Assessments
Carbon and Water Footprinting / Management, enabling International Certifications [ISO, CDP, etc.]
Carbon Credits [CDM, VCS, PoA, GS]
Business Responsibility Reporting [Under SEBI Regulations]
Sustainability Reporting [GRI and Similar Standards]
Sustainability ERP Tools and Performance Improvement

6. Advantages - RSM GC
Deep insight: Thought leaders, Helped in capacity building exercise in major states for open access.
Rich Experience:
Advised IPPs on power sale strategy at the stage of finance raising to operations
Advised some 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%

7. Experience - RSM GC
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

8. Project Finance & Insurance Commercial & Regulatory
RSM GC – a One Stop Solution for RE…!!!
Power / REC Transactions through exchange, bilateral, group captive route
Turnkey transaction support, PPA facilitation, Open access process management, documentation & liaison
Transaction
REC project development, accreditation, registration, issuance & liaison activities
Project management and consultancy for wind / solar power project
Project Management
Investment and Financial Advisory Services to RE projects
Renewable energy insurance solutions - Transit, Construction and Operational
Project Finance & Insurance
Project valuation, feasibility studies, due diligence & financial analysis including asset acquisition support
Policy & Regulatory analysis for projects, power sale structures in various states
Commercial & Regulatory
Legal review of positions /cases in power domain, particularly renewable energy
Petition / representation at regulatory forums (SERCs, CERC, APTEL, etc.)
Legal
Wind turbine portfolio management & performance improvement
Owner’s engineer and Third Party Inspection to enhance Quality & Reliability through independent Engineering opinion & Inspection
Technical

9. Diverse Work Experience
Advantages- RSM GC Advisory
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
Leadership Team
Policy Formulation
Active participation in policy formulation and thought leadership
Strong Track Record
Strong track record of project delivery, combined with risk mitigation and structuring capabilities
Diverse Work Experience
Working experience in diverse geographies & sectors, and a potent combination of technical & financial resources

10. RSM GC – Some Clients - Energy and Sustainability

11. Open Access: Regulatory Framework for Solar Power
Electricity Act 2003
NAPCC/ JNNSM/ RPO/ REC
Central & State RE policies
State level regulations & notifications
The Electricity Act 2003… 13 year old intention?
Inter-state and intra-state open access regulations
NAPCC, NTP (8% solar by 2022), JNNSM, Revised Solar Targets (100GW by 2022)
RPO – Discoms, CPPs & other OA consumers of thermal power
Promotional policy benefits for RE in general & solar in particular
Concessional transmission/ wheeling charges, losses, CSS, banking benefit, ED waivers, AD benefit, etc.

12. Key Drivers – Solar Open Access – Push & Pulls
Economics – Grid Parity
Compliance - RPO
Voluntary – Sustainability / CSR goals
Falling module prices & solar power tariffs
Over Rs 12/kWh (2010) to Below Rs 5/kWh now
Increasing grid power rates
Grid parity of solar power?
Maharashtra: Industrial (~Rs 8/u)
Maharashtra: Commercial (~Rs 14.5/u)
Sustainability & CSR goals
Corporate targets, RE100, etc.
RPO compliance
Favourable policies
Concessional benefits
Not so favourable policies
Not signing PPAs at feed-in tariff?
RPO quota full?

13. Requirements & Operational Modes
Above 1MW contract demand; 700KVA recorded maximum demand
ABT meter installation
PPA between the parties
Open access approval
Contract Structure -
Exchange?
Inter-state?
Third Party Sale Mode
Through a trading licensee or directly
OA charges concessional, though CSS also applicable
Higher flexibility: Counterparty & tenure
Captive / Group Captive Mode
Operates as per Electricity Rules 2005 (min. 26% equity & 51% of power consumption)
Additional CSS cost saving (on top of concessional OA charges)
Preferential open access approval
Stronger agreements structuring

14. Transaction Costs & Challenges
One-time: ABT meter at both the ends
On-going:
Processing & Operating cost
Wheeling & Transmission losses / charges
CSS
Additional Surcharge?
ED?
Demand penalty / temporary charges for breaching CD?
E.g.
Challenges: Approval process, new charges, frequent changes in policy
Category
Losses (%)
W&T charges (Rs/u)
CSS
Total OA cost
HT-I E (Industrial) – 33KV
3.92% + 6%
0.37
9.92% + Rs 0.76/u
HT-II N (Commercial) – 11KV
3.92% + 9%
1.08
12.92% + Rs 2.90/u

15. Typical Process for RE Power tie-up
Intent to sell / purchase
Qty, period & price
LOI
Matching buyer/ seller
High level terms
Term Sheet
Power Purchase , Share holding, etc.
Agreement
ABT meter, etc.
Set-up
Open access
Regulatory filings
Approvals
Typical Process for RE Power tie-up
Monthly Process
Billing & Payment
Power Generation
Open access charges
Credit Adjustment

16. Case Study – Solar power sale to commercial bldg
Mandate to source power for a commercial undertaking facilities across India
Suitability study for their operation in various states, applicable policies & available power sources
Contracted 1 MW Solar for one of their commercial malls in Maharashtra
Present Power Procurement : MSEDCL
Business : Commercial stand alone mall
Category : HT 2 (Commercial Category)
Annual consumption : lac units
Current Variable Power Tariff : around Rs 15/u
Solar Power Procurement : 1 MW solar plant
Annual Supply : 15 lac units
Annualized Saving : lacs/year
Highlights:
About 20% saving in electricity bills
Hassle free transaction with complete liaison & implementation support
Contracting to power flow – within 3 months

17. THANK YOU FOR YOUR TIME AND ATTENTION
Contact:
Rameez Shaikh
M: , E:
RSM GC Advisory Services Pvt. Ltd
7th Floor, B Wing, Kukreja Centre,
Plot No-13, Sec -11, CBD Belapur,
Navi Mumbai, India