Solar + Storage Systems Business Models for Large Deployment

Idam Infrastructure Advisory Pvt. Ltd.

Balawant Joshi, Managing Director

Expert Talk on Solar, Storage & Hybrid Development

Solar + Storage Systems – Business Models for Large Deployment

17 September 2020

Idam Infra – Service Offerings

Idam Infrastructure Advisory Pvt. Ltd. 2

India’s ambitious solar target

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20

40

60

80

100

120

Total Solar Power Ground Mounted Solar Solar Rooftop

Cap

acit

y in

GW

Target vs Achievement of Solar Installation

Target Achieved

India can’t achieve solar target without significant storage capacity

4

Report Name PublisherReport date/ Target Year

Battery Storage need projection

Consideration

Developing a roadmap to a flexible, low‐carbon Indian electricity system: interim

findings

CPI ( with TERI and NREL)

Feb-19/ 2030

60 GWConsidering flexibility provided by Thermal, Hydro

(including PSH ) and Batteries) and demand projection as done by TERI

25 GWConsidering flexibility provided by Thermal, Hydro

(including PSH) ,Batteries and Demand Side Management) and demand projection as done by TERI

Energy Storage System:Roadmap for India : 2019-32

ISGF (with Mac Arthur

foundation and IESA)

2019 / 2032

67 GWh At MV/LV level

142 GWh At EHV level

Least-Cost Pathways for India’s Electric Power Sector

NREL May-20/2047 237 GWConsidering capacity and demand growth are based on CEA

National Electricity Plan and 19th Electric Power Survey (CEA 2018b)

Report On Optimal Generation Capacity Mix For 2029-30

CEA Jan-20/ 2030 27 GW / 108 GWhConsidering mid term review of NEP-I for installed capacity taking 2021-22 as base year and EPS for Peak load and energy projection.

5

Reverse Auctions

• ~ 30 GW of Solar Capacity has been allotted through Competitive Bidding Process.• Gradual increase in Solar Capacity over the years shows its acceptance while discovering the lowest Tariff of Rs. 2.44/kwh

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MW

₹/kWh

Tariff trends for Large Scale (50 MW and above) solar projects

Economics of battery storage–Trend


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577

373288

214176 156

0

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400

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800

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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

US

D/

kW

h

Volume weighted average battery price

Source: LBNL

Recent report published by Lawrence-Berkeley National Laboratory shows that the LCOE for standalone BESS could reach Rs. 4.12/kWh by 2030.

Solar Plus Storage along electricity value chain

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Generation Transmission Distribution Consumer

Idam Infrastructure Advisory Pvt. Ltd.

Large S + S Projects

Medium S + S Projects

Small S + S Projects

Solar + Storage Project


• Energy Storage System co-located with RE

generator can provide firm power to the grid,

thus maintaining grid stability

• This can reduce the fluctuation in the grid and

help in better management of the frequency

• Energy Storage System co-located with RE

generator can also be used to provide power

during peak periods

• Utility can get the benefit of firm power from

renewables or/and cheaper peak power during

peak periods

Renewable Energy Plant with co-located

Energy Storage System

GridSolar Generator

ESS

BESS is co-located with Solar Plant and ESS is

charged through it

Power is supplied to

grid to manage

frequency or/and during peak periods

SECI ISTS VII tender


Particulars Description

Capacity OfferedMin: 50 MW; Max. 300 MW

Max. allowable to single entity 600 MWBusiness Model &

PPA tenureBOO & 25 years

Counter Party SECI

Project Location

Generation may be co-located/ different

locations. ESS has to be co-located with

RE

ESS Capacity1200 MWh (equal to MW rating of Solar+Wind)

Injection PointSingle or Multiple(s) by separate injection

at Pooling point & having separate control

CUF At-least 40% (annual)

Peak Power Supply Daily: Min. 6 hours, Max. 8 hours

Tariff

Two part tariff

Off – peak: ₹2.7/kWh

Peak: ₹6.12/kWh and ₹6.85/kWh

Energy Arbitrage

At discretion of HPD between 0:01 and

5:59 hours

ISTS/STU charges such as wheeling etc. in

scoope of HPD


Power Generation

Requirement

(for project rated

capacity of 100

MW)

• Daily Minimum: 300 MWh

• Capable of delivering 50MW in any peak hour (limited

to 6 hour blocks) scheduled by DISCOM through day

ahead scheduling

• Excess generation above 300 MWh during peak hours

shall be compensated at off-peak rate

Peak Power

Generation

• Permissible shortfall up-to 15% below minimum

energy commitment, accounted monthly, beyond

which penalty is applied

• Penalty equal to the Peak tariff or tariff paid by

DISCOM to meet the shortfall in supply, whichever is

higher

Excess Generation

• Any excess generation over and above 10% of declared

annual CUF will be purchased by SECI at its discretion

{without any obligation to do so} at a fixed tariff of 75%

of the Off-Peak tariff

• In case of energy supply during Peak Hours over and

above the mandated energy requirement (300 MWh),

and in the event of such power being procured by the

Buying Utility, the HPD will be paid energy charges @

Off-Peak Tariff

SECI ISTS RTC Tender



Capacity Offered Min: 50 MW; Max. 400 MW

Business Model &

PPA tenureBOO & 25 years

Counter Party/

Buying Utility

SECI

NDMC (200 MW) & DNH (200 MW)

Project Location

Generation may be co-located/ different

locations. ESS has to be co-located with

at-least one of the generation sources

ESS CapacityRPD allowed to resize ESS until 3 years

after COD (flexible to choose type)

Injection Point

Single or Multiple(s) by separate

injection at Pooling point & having

separate control

CUFatleast 80% (annual) & 70% (monthly)

Committed Annual energy: 100%Technology &

Interconnection

Point

Technology Agnostic

Interconnection at 220 kV or above

Developer Scope Land, Connectivity & LTA

Tariff

1st year tariff with 3% escalation Y-o-Y

till 15th year & subsequently fixed

thereafter


Penalty Structure Penalty for Monthly & Annual Shortfall

Annual Shortfall

Criteria>77.5% to <80% CUF <77.5% CUF

Penalty (Annual)2* PPA Tariff (Energy

Terms)

2*PPA Tariff + Tariff

Escalation removed in the

succeeding year (upto

15/16th year)Monthly Shortfall

Criteria> 67.5% and < 70% CUF <67.5% CUF for > 2 months

Penalty (Monthly)

Calculated

Annually

PPA Tariff /month * no of

months with shortfall

PPA Tariff + Tariff

Escalation removed in the

succeeding year (upto

15/16th year)

Excess GenerationExcess Power allowed to be sold in Open Market –

Priority to PPA requirement

Grid

Unavailability

(Compensation to

RE developer)

• > 4hrs: Gen Loss = [(Avg gen/hr during the billing month) × (no of hrs of grid unavailability in particular billing month)]

Backdown:• Gen Compensation = 100% x [Scheduled energy × (no

of backdown hours during the month)] x PPA tariff

S + S Plant connected at Distribution

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Large Scale Solar Power Plant

HT Transmission Line

33/11kV Sub-Station

LT Distribution Line

Consumer

Solar + Storage Plant connected at 33kV

Solar + Storage Plant connected at 11kV

Solar Rooftop Installation

Arrows indicate power flow direction

Cost of Generation – Decentralised Solar Plant

• Telangana

– Telangana has opted for a distributed solar power generation program. Tenders were issued for solar power plants of capacities in the range of 50 MW to 200 MW to be set up in a distributed manner.

– Out of 3,630 MW of solar installation about 1,543 MW of the total solar power capacity in Telangana is on account of distributed solar projects.

• Maharashtra

– Decentralised solar plants of 300kW to 10MW capacity on vacant, un-used land near DISCOM substation.

– Power from these plants is being fed to agriculture feeders, which is greatly benefitting both farmers and DISCOMs :

➢ Quality and reliable day time electricity to farmers;

➢ Savings on the Transmission network cost, reduced T&D losses for DISCOM

– Under 'Mukyamantri Sour Krushi Vahini Yojana’ in Maharashtra, EESL has signed 25 years PPA with MSEDCL for 500 MW decentralised solar power.

– MERC vide order dated May 21, 2020 has approved MSEDCL’s proposal of procurement of 100 MW solar power at tariff of INR 3.11 per unit for 25 years from EESL.

• Integration of storage would provide several benefits to distribution companies.

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Benefits of Solar Plus Storage to Discom

• BESS optimally sized to offer peak power support can help deferinfrastructure investment by extending the life of transmission anddistribution equipment due to reduced loading.

Deferment of Infrastructure

investment

• By reducing power flow on the distribution network during peak period,the overall technical losses of the utility are reduced.

Reduction of distribution losses

• Battery energy storage helps balance the fluctuations in supply resultingfrom the variability of renewable energy generation sources in the network.

Support to DRE

• BESS can help maintain a flat voltage profile of the network by controllingthe active power flow especially the high voltage during peak generationhours of solar PV by absorbing the excess generation

Voltage Support

• The UI penalties resulting from excess or shortfall of scheduled power canbe reduced or avoided with the help battery storage system by absorbing orsupplying the difference in power

Reduction of UI penalties

•By mitigating peak demand shortages, outages resulting from loadshedding can be minimized thus improving the reliability of service of theutility.

Reliability Improvement


Solar Rooftop with Battery & attached Value Streams


Self-Consumption

BESS charged from Rooftop

Power from grid, when demand is excess of

generation + storage

BESS discharged

during peak

Excess power fed to grid in no load or low load

conditions

Cheap Power Supply compared to grid

Continuous Power Supply in areas without adequate distribution infrastructure

Improved voltage profile, leading to low equipment

failure

Improved power factor, leading to lower power

bill

Value Streams for Consumer

Commercial and Industrial Tariff range


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AP DL GJ HR KA MH MP PB RS TN TS UP

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Commercial tariff range in different states

HT Industrial tariff range in different states

BESS at consumer level needs Load Curve Analysis


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Week Day Consumption Load (kW) Weekend Consumption Load (kW) 80 kW SPV System

100 kW SPV System 150 kW SPV System

Comparative Analysis of Business Models

BenefitsLarge

GenerationDistribution

connectedConsumer

ProjectsRemarks

Lower CoGCentralised plants are cheaper by 15-20% (only). Modular nature of technology is making ‘economies of scale’ argument less relevant.

Network Investment

Huge investment in transmission required for centralised plants. Decreasing utilisation of transmission assets with increasing VRE.

T&D loss reduction

Distributed sources are deployed near the load centre. This reduces the losses significantly.

Better Frequency

S + S makes project dispatchable thereby helping better management of frequency

Improves voltage & PF

As generating source and load are nearby, this will improve voltage profile and Power Factor

Reduction in Outages

Smart deployment of decentralised projects could help in reducing outages due to overloading of distribution n/w.

Capex Deferral Decentralise sources deployed with Battery storage will defer Capital Investment of DISCOMs.

Distr network design

Distributed generation would require change in distribution network planning and operations philosophy.

Thank You

Contact:

Balawant Joshi +91 98214 21630

Ajit Pandit +91 98211 08222

Email: [email protected]

Mumbai Delhi Kolkata Hyderabad

801, Crystal Plaza,158, CST Road,Kalina, Santacruz (E),Mumbai — 400 098Phone: +91 22 4057 0200

A-31, Second Floor,Lajpat Nagar II, Near Lajpat Metro Station,New Delhi — 110 024Phone: +91 11 4943 4000

Globsyn Crystal, XI – 11 & 12,1st Floor, Block – EP, Sector V,Salt Lake Electronics Complex,Kolkata — 700 091Phone: +91 33 4604 8993

House No. 3-51, Flat No. 201,Abhishek Towers,Balanagar,Hyderabad — 500 042Phone: +91 91369 20664

Solar + Storage Systems Business Models for Large Deployment

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