praveer sinha ceo & md, tata power - ryerson university...• tata power has co-invested in the...

Private & Confidential

Praveer SinhaCEO & MD, Tata Power


A Typical Micro-Grid System

Solar StorageDiesel Genset/

BiomassMicro-Grid

Solar PhotovoltaicBattery Storage

Diesel Genset

Biomass

Plant Residential

Commercial

Productive

Load

Back-Up SystemResponsible

Consumption through

efficient appliances

Smart Meter

Promoting

Micro-

Enterprises


Why Micro-Grids?

600

500

400

300

150+

2000 2005 2010 2015 2018

… but many millions are still

underserved or unserved

Villages across the country are rapidly being

connected to the grid

59%67%

76%

88%95%

2000 2005 2010 2015 20181Source: World Bank, 2018; Energy Access Outlook, 2017

Despite significant improvement in the electrification

infrastructure across India, many million people are

still unserved or underserved

Electricity is often erratic;

Continuous and good quality supply remains elusive

Status of Rural Electrification in India


Accumulated Discom losses (INR Cr)

UP example; 2016-17 petition; INR/unit

-10

0

10

3.95

PPA cost AT&C losses

@33%*1.25

2.77 5.38

Weighted

Tariff2

1.34

Margin

7.243.95

2.050

10

1.24

* Estimates fir FY 2017 and 2018 as per data available in ARR filing by DISCOMS to regulator** Using West UP (PVVNL) tariff petition; excluding all categories which are not broken into rural and urban such as institutions, HV customers, etc; Rural customers domestic at Rs 1.27 and enterprise at 3.37

Source: Report on performance of state utilities Jun-16

-10

0

10

5.970.75 3.95

2.77

AT&C loss @ 33%*0.75

Gap between ACS and ARR (INR/kWh)

Accumulated losses, driven by gap between average cost of supply

(ACS) and average revenue realized (ARR), continue to be a

challenge

The rural segment has been consistently unprofitable**

Gross margin for rural customers

Gross margin for agriculture sector customers

Gross margin for urban customers

Public DISCOMs have struggled to serve rural customers

profitably, posing financial challenges to their overall portfolio

0.00

0.50

1.00

1.50

2.00

2.50

3.00

FY 2014 FY 2015 FY 2018*FY 2017*FY 2016

Rajasthan

MP

Chattisgarh

UP

Assam

Odisha

Bihar

Jharkhand

…Message Box ( Arial, Font size 18 Bold)Private & Confidential

Even with improvements in the national grid, it is likely a supply gap will continue, and under-served cities will take precedence over last-mile rural areas


Complement the Government’s efforts to provide clean, reliable, affordable electricity to all of India’s rural citizens1

Catalyze a new wave of energy-enabled economic development in rural communities of India’s poorest states2

Create—and demonstrate the long-term viability of—a new paradigm for infrastructure, energy-efficient consumption, and the overall

business for rural electrification for India and beyond3


Key Target States & Village Profile

200-400 HHs 400+ HHs Total

Uttar Pradesh 21,593 19,133 40,726

Bihar 6,681 12,290 18,971

Rajasthan 5,956 5,407 11,363

Assam 4,040 4,741 8,781

Madhya Pradesh 3,956 4,044 8,000

Jharkhand 4,245 2,387 6,632

Chattisgarh 3,435 2,867 6,302

Odisha 1,169 814 1,983

Total 51,075 51,683 102,758

Num. villages fitting target profile

State

Source: Census 2011

Target States

Private and Confidential

Targeting villages with 200-750 households which includes a

mix of small enterprises, irrigation users, households and

small shops


Phase 1: Prove we can operate the new rural ESCO model

Phase 3: Second major scale-up

Steady state: Become the new default rural electrification model for India

Num. total sites: 200

Timing: Oct 2019 - Jun 2020

Phase 2: Expansion based on formal DISCOM partnerships

Num. total sites: 2,000

Timing: 2020-2021


Timing: 2022-2026

Num. total sites: 10,000 + TBD

Timing: 2026 and beyond

200 demonstration villages, rapidly expanding to 10,000 and beyond

Operating modality

• Independent mini-grids, sharing market with DISCOM via agreement

• Provision of metering, billing & collections for DISCOM

• No concessions or tariff regulations


• The Tata brand—with the implied trust, footprint and staying power—can work with various stakeholders in advancing thoughtful policies for developing a broader ecosystem

• Customers are more likely to trust and respectthe Tata brand compared to public Discoms

• DISCOMs can exit unprofitable rural segments, even as the government can claim a major win with TP’s commitment

Ability to Move the Market

• Tata Power has co-invested in the coalition’s efforts to develop new technologies which reduce mini-grid cost while also improving quality, modularity and ease-of-installation

• the system CapEx is 40+% less than the lowest-cost alternatives competing, and

• Within the window of affordability for the target market

Improved Technology & Reduced Costs

• Intrinsic advantages of mini-grids (efficient distribution, tighter local control, lower line losses, improved quality of power) due to loads being near generation will finally be realized

• The possibility of long-term grid integration (as part of a massive distributed generation infrastructure) will reduce risk of assets becoming obsolete

Mini-grids- long-term solution rather than a stop-gap


Proprietary Technology

Utility in a Box (UiB)

Concept

Smart Meters Battery Biomass

• Pre-assembled, easy to

install system: (<1 week

per site for the power plant

• Highly modular: Sub-

systems of 10, 20 and 30

kWp

• Flexibly designed battery

box

• Designed and engineered

for harsh outdoor

conditions (IP54)

• Low-cost (<50% of

nearest competitor)

• Controls load, time-of-

use and payments for

individual users (prepaid

& post-paid)

• Can be modified for

grid connectivity

• Upto 6 meters/ users

per box

• System-wide usage

data available

• Integrated payment of

appliances

• Customers can track

consumption

• First of its Kind

Battery Test Bed for

8kW systems

• 3 Bays testing 5

different chemistries

of Batteries

– Lead acid

– Li-ion

– Advanced Lead-

acid

– Li-ion & Lead-acid

Hybrid

– Aqueous hybrid ion

• Exploring Biomass as an option to Diesel

Genset

• Understanding of sites where Bio Mass would

be available

• Robustness of technology

• Maintenance issues (availability of skilled

manpower)

Uniflow Multifuel Steam

Engine (5 kW)

ENTRADE X 5kW Ultra

Mobile Power Unit


Lowest-cost alternative Our system

Distribution

& meters

Diesel genset or biomass

Civil work

Power plant

CapEx of each site (30kW*)

* Actual system capacity is 31.2kW due to increase in efficiency of solar panels

Note: While most of the savings are due to our technical innovation, some are due to market forces (e.g., panels)

>40% cost reduction

INR 200/watt

INR 115/watt*

Our technology innovations have significantly reduced the capital cost of solar mini-grid systems, finally making them viable for rural India


400 to 700HH Hubs 700HH+ Hubs Cluster Center

Vaishali district, BiharHardoi district, UP

Census data

Satellite imagery

Shortlist of clusters

Final portfolio of clusters/villages

Sample Cluster with over 8 villages in 5km radius


Packaged Offering

Wate

r T

reatm

en

t

Un

it

Irri

gati

on

Serv

ices

Bu

lk M

ilk C

hille

r

Oil

Exp

eller

Sm

art

E-R

icksh

aw

Ch

arg

ing

Flo

ur

Mill

Mach

ine

Promoting Local EntrepreneurshipDeveloping Financing options for supporting Productive Load Generation

Promoting Energy-Efficient AppliancesExisting energy-efficient appliances too expensive for the low-

income rural Indian market

Providing Affordable, Reliable and Quality PowerElectricity is often erratic in rural areas even if connection to national

grid is available


Value chain for affordable, efficient appliances

Financing for appliances and business development

Skill development and business support

• Identify high-potential productive-use activities for each community we serve, based on an analysis of underlying economics and constraints

• Recruit aspiring micro-entrepreneurs and conduct training sessions on business opportunities, critical success factors and risks

• Support business launch

• Create database of high-potential aspiring entrepreneurs based on feedback from knowledge/ training partner institutions

• Financing for capital expenditure and operating capital

• Identify appliances that offer the best balance of affordability and energy-efficient appliances

• Secure bulk procurement discounts

• Work with appliance companies in developing warranty and repair services for customers

• Support appliance brands on technology innovation to further improve cost and efficiency

We will mobilize an ecosystem of like-minded companies with strategic synergies across the value chain


1. Convert existing SEs from diesel to electric motors, with focus on high-potential activities like flour mills and oil expellers

2. Partner with appliance and financing companies to promote affordable, efficient appliances (paid as add-on to monthly electricity bills)

3. Promote growth of daytime productive uses such as water treatment

• Facilitate introduction of affordable, energy-efficient appliances: fans, refrigerators and TVs

• Actively support growth of irrigation entrepreneurs for daytime load

Hig

h-p

ote

nti

al o

pp

ort

un

itie

s

Conversion from diesel

Flour ancillary milling

Oil expeller

Irrigation pumps

Water treatment

plant New

Enterprise types (Units (kWh) consumed per enterprise per day)

Accounting for bulk of

consumption

SMALL ENTERPRISES IRRIGATION HOUSEHOLDS & SMALL SHOPS


Operating model Capex Investment & Payback Period

Average Energy Consumption per day (in kWh)• Installed as VLE and COCO business model

• No effort to raise demand

• A pulverizer can process 40Kg/hr•

• Consistent load for the mini grids

• Scalability : High (North & East Indian State

50,000per unit

1 Livelihood

Generated1 operator

Servicing

120-180 HouseholdsVillage 1 Village 2

Jan - Mar Apr - Jun Jul - Sep Oct - Dec

1614.5

1614.5

18 Months


Operating model Average Energy Consumption per day (in kWh)• Installed as COCO or VLE business model

• One Irrigation pump can service 15-20 acres of agriculture land in close vicinity

• Awareness on clean energy and irrigation frequency for specific cropping

• Adoption of cash crop and >2 crop intensity by the farmers

• High impact on small and marginal farmers

• Scalability : Medium

1 Livelihood

Generated

25%1 operator

increase in income

(3rd cropping)saving of ground

water

15%


15|15|5

26|26|1816|16|15

21|11|151.25 Lakhsper unit

Capex Investment & Payback Period

18 Months


2 Livelihood

Generated

7% Promoting

1 operator, 1 Helperincrease income of the

>40 mustard farmersmustard as cash crop

Operating model Capex Investment & Payback Period

Average Energy Consumption per day (in kWh)• Installed as VLE and COCO business

model

• Forward market linkage for processed oil is key for success

• Can process 3 tons of mustard oil

• High impact on small and marginal farmers

• Scalability : High (North & East Indian State)


45.5|45.5|52

52|52|5252|52|45.5

45.5|45.5|45.54.5 Lakhs

per unit

12 Months


3 Livelihood

Generated

750+ Reduction

1 operator, 2 Helperpopulation getting safe drinking water

in health expenses

Operating model

• Installed as VLE or COCO business model

• Demand for safe and chilled drinking water in shops and HHs

• Operational profit can be achieved in 4-5 months

• Scalability : High

Capex Investment & Payback Period

Average Energy Consumption per day (in kWh)


12|12|14

16|18|18 18|16|16

12|12|12

6 Lakhsper unit

42 Months


Monthly bill, by household segment

• 2 lights• 1 mobile charger

• 3 lights• 1 mobile charger

₹ 99₹ 140 ₹ 129

₹ 225

₹ 300

₹ 450

Our BPL package #1 Private mini-gridoperators, average

Our BPL package #2 Private mini-gridoperators, average

Kutir Jyoti, average(Un-Metered -

UP/Bihar)

Rural HH average, (Un-Metered - UP/ Bihar)

Public DISCOMs (with 1kW load limit)

Our tariffs

Other pvt mini-grid operators

Public DISCOMs (with 1kW load limit)

For households below the poverty line, our monthly charges will be less than what they currently pay, even under subsidized schemes


For households above the poverty line, we have designed packages tailored to different income levels

Monthly bill, by household segment

• 2 lights• 1 mobile charger• 1 fan/TV

• 4 lights• 1 mobile charger• 1 fan or TV

• 4 lights• 2 mobile charger• 2 fans or 1 TV

• 4 lights• 2 mobile charger• 1 fan• 1 TV

₹ 299

₹ 399

₹ 500

₹ 549

Package 1 Package 2 Package 3 Package 4


For commercial customers, our tariffs and value proposition will be highly competitive, tailored for each segment

₹ 15.00 ₹ 17.00

₹ 23.00

Small enterprises Irrigation Shops

Tariff (INR per kWh), by segment

What customers currently pay for diesel/genset or energy service

24-30/kWh, usually for rented diesel pumps

Blended rate across segments: INR 16.50/kWh

24-30/kWh, to local DG operators or inverter/ battery system

20/kWh (depending on diesel purity)

1. Adequate power for intensive activities: Capacity for villages designed for peak power requirements driven by mechanized appliances

2. Available whenever needed: Architecture optimized for 24 hour / 12 month demand profile and load schedules (with backup to prevent outages)

3. Predictable billing: Smart metering with SMS updates on consumption and payables

4. High quality: Decentralization + short transmission distances for small catchment areas eliminate voltage drops; sophisticated power electronics and monitoring systems ensure high quality AC with minimal voltage fluctuation

5. Easy repair and redress: Village-level customer service and rapid line repair services available 24x7; immediate access to service representative

Drivers of value


Max. solar output; units (kWh) per month

SummerPeak Winter Mild Winter

3,216

3,589

4,525 4,285

4,053

3,491 3,266

3,484 3,433

3,779

3,379

3,026

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

A typical 30 kW plant can produce, on average 3,625 kWh per month, or about 120 kWh per day

Source: Data from SPI plant in Bihar, December 2017 through November 2018


0123456789

6 A

M

7 A

M

8 A

M

9 A

M

10

AM

11

AM

12

PM

1 P

M

2 P

M

3 P

M

4 P

M

5 P

M

6 P

M

7 P

M

8 P

M

9 P

M

10

PM

11

PM

12

AM

1 A

M

2 A

M

3 A

M

4 A

M

5 A

M

24 Hour Consumption Pattern by Season

Summer Winter

Morning Day NightEvening

Over 40% of the total demand lies outside the day

time

Peak Sun Hours

0

1

2

3

4

5

6

7

6 A

M

7 A

M

8 A

M

9 A

M

10

AM

11

AM

12

PM

1 P

M

2 P

M

3 P

M

4 P

M

5 P

M

6 P

M

7 P

M

8 P

M

9 P

M

10

PM

11

PM

12

AM

1 A

M

2 A

M

3 A

M

4 A

M

5 A

M

24 Hour Consumption Pattern by Customer Segment

Households/ Shops Commercial (Appliance) Commercial (Motor)

Morning Day NightEvening

Consumption peaks during non-solar/evening hours for commercial as

well as HH customers

Peak Sun Hours


Units (kWh) per month

Max solar output Diesel generator output

Solar output consumed

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Unused solar capacity

Evening/night load serviced by diesel

generators

SummerPeak Winter Mild Winter

Historically, mini-grid operators in India have struggled to utilize the daytime capacity, and often have to rely on diesel to

support evening/night loads

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Un

its

Per

Mo

nth

Solar Diesel Maximum Solar Battery Charge Consumption

Summer Mild WinterPeak Winter

Typical Load Curve for Micro-Grid

Storage will help in reducing the dependency on diesel

Increased Demand from enterprise load

Reliable power at competitive rate against diesel makes

Micro-Grid gain more consumers


Laying the foundation

for the smart grid

of the future


Creating Social Impact

Implementation of 10,000 Micro-Grids will

impact lives of 20 Mn people; generating a

direct employment for 12,000 people.

INR 1,000 Crincremental income each year

from new economic activity


Phase 1: Prove we can operate the new rural ESCO model

Phase 3: Second major scale-up

Steady state: Become the new default rural electrification model for India

Num. total sites: 200

Timing: Oct 2019 - Jun 2020

Phase 2: Expansion based on formal DISCOM partnerships


Timing: 2020-2021


Timing: 2022-2026

Num. total sites: 10,000 + TBD

Timing: 2026 and beyond

• Independent micro-grids, sharing market with DISCOM, via MoU

• Provision of metering, billing & collections for DISCOM

• No concessions or tariff regulations


Hardware & EPC

Field operations leadership

Sales & demand

Finance & administration

Field staff recruiting &

training

Technology innovation

S m a r t P o w e r I n d i a

Site identification


Fundraising : subsidized

investments



30

http://www.tatapower.com/

mailto:[email protected]

praveer sinha ceo & md, tata power - ryerson university...• tata power has co-invested in the...

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