corporate re procurement · corporate re procurement: experiences from india deep dive workshop:...

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



• 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





• 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





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


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)


Part C: Corporate experience & WRI’s perspective


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


THANK YOU

ASHOK THANIKONDA, DEEPAK KRISHNAN Asia Clean Energy Forum. 6 ADB Avenue, Mandaluyong City 1550, Metro Manila, Philippines

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