solar project mgmt compiled by kamaljit singh jassal & engr amritpal singh

Solar Project Management – compiled by Kamaljit Singh Jassal & Engr Amritpal Singh (from Australia)

[email protected] 1

Site Identification & Securing, Land Property or Lease Agreement.

Step Sub-step Details Activities

Important

factors to consider

Authority Challenges

Site Identification And Project Pre-

Feasibility: This step includes carrying out

various due diligence activities at the

identified site/s including analysis of solar

insolation, geology, evacuation of power and

overall financial pre-feasibility.

Identification

of Site

The first step in project design and development is the site identification. In case

of project being set up for third party sale of power or for captive

purposes, the land needs to be identified by the developer. The

category of the land has to be checked with the Revenue

Department of the State. Further, one of the key factor in

identification of a suitable site is to obtain the consent of the present owner of

that piece of land, to sell. Suitability of a place includes factors

such as suitable irradiation, access to site and availability of

1. Identify a

suitable piece of land 2. Obtain

consent from current owners 3. Check the

categorization of the land with the Revenue Department

Revenue

Department/SNA

Identifying ideal lands which satisfy the

multiple conditions of good solar irradiation, proximity to

substation, good accessibility is a challenge.

Multiple owners and local disputes prevent speedy acquisition of

most lands. Local population must also be taken into

confidence before acquisition. Such complex factors need to be taken into

account and identifying sites which fulfil most such

conditions takes time

mailto:[email protected]


[email protected] 2

evacuation infrastructure. This step is undertaken in

conjunction with other analysis such as solar radiation analysis,

infrastructure analysis etc.

Solar

Insulation And Shadow Assessment:

It is recommended that for

ascertaining accuracy of solar

irradiation data, dedicated

weather stations are erected at the site for

local irradiation measureme

nt and a minimum of 12 to 18

Site specifications

including level of solar irradiation at site, temperature and

structures/obstacles which may cast shadows need to be

checked initially. This assessment is done using ground level

assessment or using reliable data from NASA (RETScreen)

or NIWE which is particular for the designated area or location. Also it is

recommended that for ascertaining accuracy of solar irradiation

data, dedicated weather stations are erected at the site for

The following have to be

checked : GHI Wind

Speed/Direction

Rain

Accumulation

Air

Temperature

Atmospheric

Pressure (SLP)

Relative

Humidity.

Technical advice is suggested for this level.

NA


https://eosweb.larc.nasa.gov/sse/RETScreen/

http://niwe.res.in/assets/Docu/Data_Requisition_Form.pdf

http://www.solarguidelines.co.in/index.php/glossary/ghi/


[email protected] 3

months of data is gathered for

observation. It is also recommend

ed that ground based data

be correlated with satellite

and ground station data to get a

better idea about the average annual

irradiation and irradiation

patterns at the proposed

site.

local irradiation measurement and a minimum of 12 to 18

months of data is gathered for observation.

Read more here.

GEOLOGICAL DUE

DILIGENCE : Preferred land

Soil testing and geological experts are

involved in the assessment of geological parameters

Geological testing for:

1) Degree of levelisation 2) Drainage

Technical advice

is suggested for this level.

NA


http://www.seci.co.in/solarguidelines.in/index.php/srra/


[email protected] 4

orientation is flat, the same must

be assessed at this stage. Other

criteria of review include state

of the drainage system at

site, dust percentage in air and

soil strength to support structures.

of site. system 3) Air system 4) Dust and

soiling parameters 5) Soil texture

and bearing capacity 6) Suitable

foundation system for structures

7) Ground water salinity levels

GEOPOLITICAL DUE DILIGENCE :

NA NA NA NA

POWER EVACUATION

FEASIBILITY AND SITE ACCESSIBILITY : Power

evacuation feasibility

The developer has to consult and check on the interconnection

voltage level with the state TRANSCO for the desired voltage level transmission corridor

up to the project site. A grid feasibility study

A letter of comfort may be provided by

the SNA upon request which is then required to be submitted to

the TRANSCO for a grid

# The interconnection to the Sub

station level has to be done at a specific voltage level

# A transmission

SNA, State TRANSCO


http://www.solarguidelines.co.in/index.php/glossary/sna/





[email protected] 5

must be checked which would

include availability of adequate

capacity at the transmission

utilities substation, distance to

sub-station, right of way issues etc.

Connectivity to the site (road and rail) and

distance from urban areas would

also need to be examined for

suitability. Accessibility of site by

trucks and cranes is critical and

is done to evaluate the evacuation capacity of existing transmission

system. The evacuation feasibility study

involves the following steps: #Nearest feasible

substation for interconnection #Identification of

interconnection point #Voltage level #Feeders and Bay

available in the substation #Right of Way

feasibility study. study has to be carried out to ensure that the

nearest sub-station or the sub -station

under consideration has adequate

evacuation capacity to support the

solar power plant being set up.



[email protected] 6

must also be evaluated.

TECHNOLOGY AND SUPPLIER

SELECTION : An appropriate Solar PV

technology needs to be identified

based on factors such as maturity

and performance of the

technology, space requirement

and availability, available solar

insolation, cost of technology

(capital and O&M), projected

Based on the technical and feasibility studies carried out, irradiation

levels, resource conversion levels, CUF requirement, technical and economical risks,

manpower skills and number, availability of suppliers and spares,

the most appropriate technology is chosen. Further the conditional

requirements of the nodal agency , regulatory commission

and international standards and codes are also taken into

account for choosing a particular technology and make. Thus the IEC for PV and grid

tied inverters and local specifications suggested

by MNRE/NISE must be checked and adhered to. The technology

NA

Analysis of the

following: # Technical

specifications adhering to the Sate, National

and International standards

#Track record of a technology

NA


http://www.solarguidelines.co.in/index.php/glossary/iec/

http://www.solarguidelines.co.in/index.php/glossary/mnre/

http://www.solarguidelines.co.in/index.php/glossary/nise/


[email protected] 7

CUF’s, risks associated with the

technologies, need for trained

manpower, level of commercial

development and technology

support available from

technology supplier, availability of

technology suppliers/ performance

guarantees etc. All of these factors

play a critical role in the

identification of a suitable technology.

provider chosen must provide equipment which conforms

to IECstandards for solar PV modules and inverters. The use of

specific PV DC cables is also recommended. It is recommended that a

technology having an established track record and credible

technology providers need to be selected.


http://www.solarguidelines.co.in/index.php/glossary/iec/


[email protected] 8

For the selected technology,

equipment providers shall then be

identified and selected.

FINANCIAL PRE-FEASIBILITY

: Preliminary calculations on the

overall cost of the plant, the

generation from the plant and

the cost of generation would be assessed to

establish project financial

viability. This activity provides a

Assessment of the project cost, investment

requirement, cash-flow projections & expected return and financial

viability of the project is critical. The pre-feasibility assessment

and report shall cover the risk return assessment for the

project and map the key macro risks and barriers likely to impact the viability of the

project from design, implementation to operation. At the

macro level assessment of following must be

Financial due-diligence

NA NA



[email protected] 9

go/no-go decision point for the

project.

made: ##Development Cost ##Engineering Cost

##Land Cost ##Equipment Cost ##Construction Cost

##Operational Cost ##Revenue ##Benefits/Incentives

##Funds Availability ##Cash Flow ##Returns

ENVIRONMENT SENSITIVIT

Y : NA

NA NA NA NA

WATER AVAILABILIT

Y/ CONSTRUCTION &

POWER AVAILABILITY : Carried

out as a part of geological/power

evacuation feasibility

Water

requirements are generally fulfilled through

borewells and other temporary sources of water such as water

tankers

NA NA



[email protected] 10

study

PROJECT REGISTRATION

PROJECT REGISTRATION : The

project must be registered

with the SNA along with

payment of requisite fee

The project has to be registered with the

SNA to avail various benefits under the solar policy of the

state. In some states ( Madhya Pradesh), third party and captive solar

power plants may be setup without project registration but will be

unable to avail several policy benefits such as concessional open access charges.

The

Developers/Investor who may be individual,

Company, firm, society, NGO etc. may be required

to submit the following documents, as

applicable, for registration: i. Application in

the given format; ii. Certified copy

of Memorandum & Articles of Association of

the company/ Certified copy of the bye- laws of the registered

society; iii. Certified copy of partnership

deed In case the project is found

SNA




to be eligible after evaluation, a demand note

for depositing the requisite processing fee

is issued and such Developers may be required

to deposit a processing fee (generally non-

refundable) and get the project registered within

a stipulated period from the issuance of the demand note;

and In case of failure to submit the

processing fee within the stipulated

timeline , the application for registration of

the project by such Developer may be




considered cancelled.

POST

REGISTRATION : Activities to

be carried out post registration

of the project with the

SNA

The following documents shall be submitted by the

project Developer within the specified timeline for approval: i. Detailed Project

Report (DPR); ii. Land related document

(tagged/identified project site); iii. CPM/PERT chart (for

implementation of the proposed project); iv. Water allocation

order on the basis of water availability at the project site( if

applicable) and map presenting the grid situation; v. Affidavit for abiding

by the Regulations/Orders of the State Regulatory

Commission, State Govt. Policies and the Guidelines/Notifications

NA SNA




(applicable to solar based power projects) issued by the

authorized Officials from time to time; vi. Performance

guarantee

PERFORMAANCE BANK

GUARANTEE : A Performance

Bank Guarantee is required

only by Category 2 and 3

projects availing policy

benefits

The developer is required to deposit a

specified amount in he form of Bank Guarantee having a

specified validity with the SNA as Performance Security.

The PBG will be released to the developer according to

the specified benchmarks and time schedule

SNA

BAY ALLOCATION

:

Bay allocation is done by requesting the

State TRANSCO for the same and submitting the requisite documents such

as PPA, Feasibility report, NOC from the

Request for bay allocation can be

done at any time after the pre-feasibility approval and

before grid interconnection.

NA TRANSCO



http://www.solarguidelines.co.in/index.php/glossary/cto/




SNA. This may be a chargeable.

PROJECT EXECUTION

LAND/SITE ACQUISITION: This step includes two sub-steps which are – to achieve land lease agreement and changing land category to industrial from agricultural. Land acquisition can be made from any of the following ways:

Lease of forest land Purchase of private land Lease of revenue land

PREPARATION OF DPR AND DETAILED BUSINESS PLAN A detailed project report and business plan covering the site, technology, cost estimates, cash flows, risks and returns is p repared at this stage. The DPR includes information regarding the potential equipment providers or vendors and must also exhibit the credibility of vendors shortlisted for final selection.

APPOINTMENT OF EPC CONTRACTOR, EQUIPMENT SUPPLIER/S AND DETAILED PLANT DESIGN The project developer shall develop detailed guidelines (project uptime, performance of key systems and sub systems and other design requirements, time for development, key tasks etc.) for project design and construction and based on these guidelines appoint an EPC

contractor. The EPC contractor shall undertake detailed plant design with the developer based on inputs from the DPR. The project developer shall also enter into a detailed EPC agreement with the EPC contractor which shall spell out key deliverables like project completion timelines, performance guarantees and the specifications of the equipment to be used during the project construction.

TRANSMISSION AGREEMENT AND INFRASTRUCTURE Transmission agreement is signed with the state TRANSCO before commissioning of the project. CLEARANCES AND APPROVALS

Approval or clearances would need to be attained during project construction from various departments. Major clearances which form part of this step are:

Pollution Control Board

Import/Export Certificate No objection certificate from Civil Aviation Department No objection certificate from district collector for setting up the project Consent for establishment and consent to operate from state pollution control board

Permission for laying power evacuation lines by chief electrical inspector





Clearance under the Boilers Act 1923

CRZ clearance in case the project is close to the coastline Permission for ‘Implementation of Metering Code’, ‘Protection System’ to be obtained from host Distribution Utility or the State

Transmission Utility or the Central Transmission Utility as the case may be.

CONSENT TO ESTABLISH – Consent to Establish Certificate is to be taken before starting the construction or civil work at site. This consent is to be taken from the state pollution control board. CLEARANCE FROM CIVIL AVIATION DEPARTMENT – Any industry installation which is in the vicinity of any airport needs to take an

approval or clearance from the Civil Aviation Department. FOREST CLEARANCE – Forest clearance from the state Forest Department may be required. IMPORT & EXPORT CERTIFICATE – Import & Export Certificate is required by the developer for imports of any equipment from a foreign supplier. The certificate is to be obtained from the Department of Commerce, Govt. of India as per the guidelines of Directorate

General of Foreign Trade (DGFT) are to be adhered. COASTAL REGULATORY ZONE CLEARANCE – CRZ clearance is required in case the project is located close to the coast. CEIG DRAWING CLEARANCES –

Before the construction work can start, drawing clearances need to be taken from Chief Electrical Inspectorate. A total of 3 clearances are to be taken from Chief Electrical Inspector (CEI):

1st clearance for construction of the transmission line -This clearance is taken before construction of line (after design is approved)

and during project construction phase. 2nd Clearance for construction of the substation and linking inverter – This clearance is taken before construction of substation or

switch yard (after design is approved) and during project construction phase.

3rd clearance is taken for connecting DC part /Solar Field with the grid through inverter. This is taken first after the desi gn is compete and then after construction of project and before connecting it to the state grid.

Drawing approvals need to be taken with the details of the drawing and accompanying enclosures mentioned as follows:

1) Topographical map showing location of the power plant/unit. 2) Single line schematic of entire project 3) Sectional plan and elevations 4) Earthing scheme

Documents required to be submitted along with the drawing are, 1) Govt. order for having obtained permission for setting up of power plant. 2) Power purchase agreement copy.

3) Scheme of grid synchronization. 4) Power Evacuation infrastructure details including sending and receiving end equipment’s.




PLACING EQUIPMENT PROCUREMENT ORDERS AND SIGNING PERFORMANCE CONTRACTS WITH EQUIPMENT/ PANEL SUPPLIERS The project developer would need to place orders for the equipment and enter into performance guarantee agreements with equipment

suppliers. The project developer would also need to see the lead time for equipment procurement and delivery while also provisioning time for obtaining customs and import duty exemptions. APPOINTMENT OF O&M CONTRACTOR

The project developer appoints an O&M contractor and enters into an O&M contract. The O&M Contract specifies details regarding project uptime, personnel required, spare parts, acquisition for project for operation and management. Some key tasks besides operation, preventive and routine maintenance include:

Preventive maintenance policies

Cleaning, washing of PV modules Tracker maintenance, if applicable BOS inspection

Penalty on underperformance INSURANCE POLICY & RISK COVER Insurance Policy is taken by the developer during the Construction period related to:

Damage to Equipment (During Procurement, Transit & Erection) Force Majeure PPA risk cover

Non delivery Insurance Policy will have to be taken by the developer during the Operation period related to:

Theft and damage of equipment/project

Machinery Breakdown Force Majeure Risk

FINANCIAL MANAGEMENT

Important Steps for Fund raising or Financing:





1. PROMOTERS APPRAISAL: This includes due-diligence of aspects related to promoters background, operational results (net

worth, balance sheets, cash flows etc. -financial statements, profitability to show that the developer has the ability to contribute the equity portion of the project costs), capability to undertake project, management and organizational set-up. Developer’s ability to contribute equity, phasing of equity infusion, assessment of the risks associated with development and operation of project –

identified and assessed by the developer. 2. TECHNICAL APPRAISAL: This step includes following:Solar Radiation Verification

A 3rd party verification of the solar irradiation level is carried out. At least two independent sources are recommended for this

verification.Technology Assessment A certificate from the technology provider as well as the performance guarantee (contract) is submitted to the FI for review. There is a need for the technology package including components like PV Modules, inverters, DC-cables to have proven field experience over the years. The guidelines require that the technology be demonstrated in at least 1 successful project in operation.Assessment

of the DPR An overall assessment of the DPR from technology to grid connection and financial analysis like DSCR and IRR would be undertaken and the results compared to see if they meet the FI’s own and sector norms. Adequacy of equipment and costing of the equipment

from a project viability point of view. 3. FINANCIAL APPRAISAL:

Due-diligence of financial & funding details related to Project Cost, means of financing, Cash flow & profitability projections, Risk

assessment, Financing structure ( Debt & equity), foreign exchange risk. 4. INDUSTRY SPECIFIC APPRAISAL:

Due-diligence of Industry specific factors like market trends and costs, market attractiveness, creditworthiness of Off-taker, risk

guarantees, long term demand, market drivers, regulatory & policy scenario. 5. ENVIRONMENTAL APPRAISAL:

Due-diligence of environmental risks, post implementation impact

6. INSURANCE PACKAGE: Ensure that the project developer has obtained adequate insurance cover for project construction and project operation.

7. LEGAL APPRAISAL: This involves due-diligence of various contractual agreements including the PPA/LOI/Land agreement and others.

ALLOTMENT CERTIFICATE & IMPLEMENTATION AGREEMENT/ PPA/ PO: ##Due-diligence of the Project Allotment certificate & implementation agreements (PPA – conditions, timelines related to commissioning & project schedule, performance provisions & penalties)

##The FI would also check the procurement purchase orders (POs) and thus POs need to be raised for major equipment/s/ components/ systems/ services like PV Modules and inverters.



http://www.solarguidelines.co.in/index.php/glossary/loi/





##In addition the FI may ascertain if any alternate mechanism for sale of power has been proposed in the PPA in the event of default in

payments by the utility. LAND LEASE/ACQUISITION AGREEMENT : This shall cover:

##Due-diligence of the lease agreement signed between developer & land owner, ##Aspects related to lease rent, escalation, period of lease etc. ##Performance provisions & penalties,

##Payment terms & conditions. ##Due diligence of project land, its title deed and its hypothecation to the FI. EPC CONTRACT & PERFORMANCE GUARANTEES: Due-diligence of the EPC contract & Performance Guarantees, aspects like performance provisions & penalties, payment terms &

conditions, after sale service provisions. STATUTORY APPROVALS & CLEARANCES: Key considerations here include:

##Due-diligence of the approvals & clearance given by different departments/agencies ##Aspects related to conditions to be adhered to by the developer for meeting the stipulated requirements for approvals and c learances, ##Penalties to be borne by the developer,

##Whether key approvals have been achieved. Apart from the important approvals and clearances related to evacuation of power, CTE, CTO, approval for Right of Way etc. other clearances as applicable viz. water (from host state water authority for abstraction and use of water), pollution clearance etc. shall also be reviewed by the FI.

SECURITY PACKAGE (PLEDGE & GUARANTEES): This shall cover: ##Due-diligence of the security package

##Personal Guarantee, ##Corporate Guarantee, ##Bank Guarantee, ##Mortgage of property etc.

All the agreements must be transferable to Financial institution. 8. LOAN APPROVAL: Financial institution approves loan depending upon the Project Developer meeting the required criteria.

CONSTRUCTION



http://www.solarguidelines.co.in/index.php/glossary/cte/



Project Construction includes primarily, the signing of an EPC contract followed by installation, commissioning, acceptance test procedures. PROCUREMENT: This includes attaining administrative concessional certificates and physically procuring the equipment. Procurement of equipment and components is carried out as per the Bill of Material or Bill of Quantity for both major and non major items. T he major

equipment for a solar power plant include • Modules • Inverters

• Transformers • Ring Main Units • Junction boxes and Cables The Ministry of New & Renewable Energy (MNRE) has allowed excise duty exemption on some equipment to be used in solar plants by

way of Excise Duty Exemption Certificates (EDECs) and Concessional Custom Duty Certificates (CCDCs). These certificates are to be obtained from MNRE prior to the release of equipment from excise unit or port. After the issue of relevant certificates and submission with excise unit and custom offices, the equipment is released.

TEMPORARY ELECTRICITY CONNECTION: During the construction phase a temporary interconnection for electricity supply is taken from local distribution utility. WATER PERMIT: Obtaining water supply connection for and during the construction process. Prior to the start of construction at the site,

a temporary electrical connection from the local/state distribution utility must be taken. This is to offset the cost of electricity in case of using a diesel generator during the construction period. LABOR CLEARANCE: Before employment of labor at site, Registration of Licenses needs to be done with the Labor Department and the

time limit for getting the same is stipulated to be 15 days. CIVIL CONTRACT: A civil and structural contractor is appointed to carry out the works of • Site leveling and grading

• Construction of Control Rooms, Transformer and Inverter Cabins • Switchyard • Internal and Periphery roads • Foundations for Mounting Structures

• Boundary Wall and Fencing ERECTION OF PLANT: EPC to erect the following equipment : ##Mounting Structures/Trackers

##PV Modules ##Inverter/Batteries etc.






##Transformer, Switchyard, Substation

##Meters ##Monitoring System & Control The following considerations relate to the step of plant erection:

##Erection of feeders to the nearest transformer/sub-station ##Mounting structures can be used which must be suitable to mount SPV modules and arrays. It must be designed to withstand wind speeds at proposed location.

##Founding of mounting structures is subject to soil conditions (ramming, drilling,WEIGHT foundation) which are ascertained based on geological survey and maximum wind speed. ##Quality standards and strength of iron structure can be of importance. Further, power and control cables should be of requi site quality standards, material and shall be chosen taking into account fault level contribution to the system, full load current and voltage drop.

The owner undertakes the following major activities during the erection of the plant: ##Arrangement of Security service ##Owners engineer for construction survey

##Continuous controlling of materials installed to be of the correct specifications ##Stepwise testing of the installations ##Quality management e.g.:input inspection of all material, PV modules, inverter, cables, sub construction

##protocol of all materials supplied for warranty issues, to be countersigned ##daily protocol of work conducted, to be countersigned ##protocol of daily construction progress and all relevant circumstances and issues

##red flag report of schedule and relevant circumstances ##as built documentation, to be countersigned #setting up of safety devices like intruder detection, CCTV cameras, boundary wall and gate

PROJECT COMPLETION AND COMMISSIONING: The step includes construction of grid interconnection arrangement and achieving the grid connection through clearances, metering and final acceptance checking of project. Most importantly, it includes the following approvals:

CONSENT TO OPERATE: Consent to Operate Certificate is to be taken before starting the construction or civil work at site. This consent is to be taken from the state pollution control board.

CEIG CLEARANCE: Clearance from Chief Electrical Inspector (CEI) is to be attained before interconnecting station to state grid in accordance with the Indian Electricity Rules 1956 (Section 47 a). THE CEIG Inspector inspects three components of the system: 1. The solar power plant

2. The pooling substation 3. The transmission line constructed to the nearest substation


http://www.solarguidelines.co.in/index.php/process/#35587769




GRID INTERCONNECTION AND METERING: Temporary connection is scraped and new interconnection system is connected to grid.

Local distribution utility to check the ABT meters installed by developer at the interconnection point. The project developer needs to commission the project within the timeline specified in the PPAEPC to undertake the testing of the equipment and take Utility Approval for substation connection. The Final Acceptance Test is designed to check the status of the plant and the proper

functioning of the system and system components. Once it is verified that the plant complies with requirements and testing, the plant will be taken over by the owner from the EPC contractor.All warranty relevant data or testing shall be approved or tested prior to warranty ending to raise final claims by the developer and the EPC. Further, the distribution utility shall provide the necessary

approvals and infrastructure for evacuation of power generated.At the time of commissioning, the developer is to draw up a punch list with the EPC contractor. This comprises of the scope of work that has been partially completed/not completed but does not impact performance or output of plant. The punch list needs to be completed by EPC contractor at a future date within a mutually agreed timeframe with the developer.The process of project commissioning follows and includes:

##Site inspections ##Mechanical Completion Test ##Inverter Commissioning Test

##Performance Test. O&M – Operations & Maintenance

Operation, benchmarking of yield, improvements, maintenance, refurbishment or demolition. OPERATION & MAINTENANCE

The project developer may undertake operation & maintenance of the plant on its own or appoint a third party to undertake operation & maintenance by signing a Plant operation and service agreement. MONITORING ARRANGEMENT

The distribution utility to provide certificate of power purchased from the project on monthly basis. The certification to be based upon the joint meter taken by the project developer and distribution utility. IMPROVEMENT ANALYSIS The project developer may evaluate the performance of the project on periodic basis and identify areas of improvement.

REFURBISHMENT OR DEMOLITION The developer may need to replace PV Modules, inverters and other equipment due to blow outs and faults. Yield Management




Periodic cleaning of modules (wet or dry) as per the cleaning frequency determined or as deemedFIT . The cleaning of modules must be

before sunrise or after sunset to ensure no generation loss. Equipment Maintenance The maintenance of equipment must be done in non generation hours to avoid generation loss and grid impact. Periodic, Correct ive and

Condition based maintenance methods must be maintained. In case of non correction of faults, technical team of equipment manufacturer must be contacted. RECYCLING

The developer may assess the options related to Recycling of PV Modules, inverters etc.




solar project mgmt compiled by kamaljit singh jassal & engr amritpal singh

Environment