CORPORATE
RE PROCUREMENT: Experiences from India
Deep dive workshop: How corporate demand for green power can support renewable energy markets in Asia June 6, 2016.
ASHOK THANIKONDA, DEEPAK KRISHNAN Asia Clean Energy Forum. 6 ADB Avenue, Mandaluyong City 1550, Metro Manila, Philippines
Contents Part A: Renewable energy business landscape in India 1. Drivers: Why are corporates in India buying renewable energy?
2. Business models: What business models are available?
Part B: Green Power Market Development Group - India 1. GPMDG India – A brief
2. Member companies
Part C: Demand aggregation for scaling up renewable energy 1. WRI’s Collaborative Solar procurement project
Part A: Renewable energy business landscape in India
Diesel
power
₹ 14
₹ 30
Grid
power
₹ 5.85
₹ 8.5
Solar
power
₹ 5.5
₹ 7.5
Wind
power
₹ 5.5
₹ 6.5
Cost per kWh of electricity
from various sources in 2015
• Fossil fuel based electricity prices are rising
sharply and continuously
• Power deficit is a critical business risk
• Renewable energy is already cheaper or
competitive with grid power and
supplements/ augments it
4.3
2.5
3.5
4.5
6.09
4.46
6.56
4.76
HT
Commercial
HT
Industrial
LT
Commercial
LT
Industrial
% average annual increase in electricity
tariffs (FY11-15)
TANGEDCO BESCOM
Business case Country level targets Regulatory compliance Sustainability commitments
Drivers Business models
Business case Country level targets Regulatory compliance
100 60
10 5
Renewable Energy Target by 2022
(GW)
Solar
Wind
Biomass
Small Hydro
60
40
Split up of solar targets
Utility scale/ solar parks
Rooftop Solar
Sustainability commitments
Part A: Renewable energy business landscape in India
Drivers Business models
• Renewable Purchase Obligations (RPOs) mandate businesses that procure
power from third parties to procure a share of such energy from renewable
energy sources
• Almost all Indian states have notified penalties for RPO non-compliance
• Enforcement of penalties could soon become the norm
5%
0.25%
Karnataka (> 5MVa) Tamil Nadu (> 1 MVa)
Renewable Purchase Obligations
(2015-16)
Non-solar RPO Solar RPO
Specifics under
deliberation
Business case Country level targets Regulatory compliance Sustainability commitments
Part A: Renewable energy business landscape in India
Drivers Business models
Part A: Renewable energy business landscape in India
• Consumers increasingly prefer products/ services of companies that adhere to the principles of sustainability and
operate accordingly
• Reducing Green House Gas (GHG) emissions by shifting to renewable energy is proven to be an effective way of
reducing impacts on the environment
• Corporates are increasingly aware of this and consider it as one of the elements of their CSR strategy. They also
include this as part of their brand positing by reaching out to their consumers about their leadership in sustainability
Business case Country level targets Regulatory compliance Sustainability commitments
Drivers Business models
Part A: Renewable energy business landscape in India
Drivers Business models
Commercial
buyers
Industrial buyers
Surplus
capital
No surplus
capital
Capital
investment
Power
Purchase
Agreement
Capital
investment
Power
Purchase
Agreement
Part A: Green Power Market Development Group - India
Transaction support for iconic companies
Policy advocacy
Demand aggregation/ CollabSolar
Green Power Market Development Group - India
Supported industry representation in convincing
Karnataka electricity regulator to waive off grid
usage charges for solar projects
Started in 2013 to replicate WRI’s global renewable
energy initiatives in India. 200+ MW projects in
various stages
GPMDG – India: A brief Member companies
Part A: Green Power Market Development Group – India
GPMDG India – A brief Member companies
WRI’s CollabSolar project
Part C: Demand aggregation for scaling up RE
Single large
bundle of
demand for
rooftop solar
power
Buyers of various sizes
Economies of scale
Cheaper pricing
Seller
Concept Process Lessons learned
Convening
Part B: Corporate experience & WRI’s perspective
Concept Process Lessons learned
Socializing the concept
(by WRI)
Data collection from
interested buyers (by WRI)
Preliminary site visits
(by WRI)
Preparation and release of
Request for Information
(RFI) document (by WRI)
Site visits and submission of
proposals (by Sellers)
Preparation and release of
the RFP document (by WRI)
Educating the buyers about
decision making (by WRI)
Analysis & screening of
responses to RFI (by WRI)
Analysis of the proposals
(by WRI)
Selection of the winners
(by buyers)
WRI’s CollabSolar project
Part C: Corporate experience & WRI’s perspective
Concept Process Lessons learned
Aggregate bundles at industrial
park level to allow for fluctuations
of demand and supply
Segregate bundles using 2x2 matrix -
based on nature of buyer (commercial / industrial) and
preference of business model (Capital investment / PPA)
Addressing weekend
(dynamic) demand, deemed
generation & net-metering
Addressing the data
collection problems
Clarify on “CollabSolar
rebate” Vs “Cross subsidy
within the buyers”
Roof space and ownership type
Sellers are expected to give an
individual price to each buyer
based on their credentials and
offer a uniform discount that is
reflective of the CollabSolar
benefit.
In case of buyers who operate out of leased
spaces, sellers are not comfortable with a third-
party PPA based rooftop solar PV installation.
Tripartite agreement between the seller,
landlord and the buyer is a possible solution in
such cases.
Neither the sellers nor the
buyer wants to pay for the
unconsumed power over the
weekends. Net-metering is
possible solution in such
cases.
Signing Non-Disclosure
Agreements (NDAs) and
having detailed clauses about
access/ ownership in the next
phase can address most of the
security concerns of buyers.
For MNCs, capital investments need
changes in corporate charter and
clearance from the head quarters
WRI’s CollabSolar project
THANK YOU
ASHOK THANIKONDA, DEEPAK KRISHNAN Asia Clean Energy Forum. 6 ADB Avenue, Mandaluyong City 1550, Metro Manila, Philippines
Top Related