Overview of Solar Guidebook and

Knowledge Management Project

Sustainable Business Advisory

April 2012
 Knowledge Management Project - the Aim

to build capacity, capture lessons learned

and disseminate and share knowledge on the
Indian PV market with the aim of supporting
future solar PV projects by IFC and other
market players
Utility Scale Solar Power Plants

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 Outline

Presentation 1: Introduction and project
overview
Presentation 2: Completion / Technology
Risks and Mitigation
Presentation 3: Operating Risks and
Mitigation
 Utility Scale Solar Power Plants a guide for
developers and investors
Solar PV technology Financing PV projects
The solar resource CSP annex
Project development EPC contract heads of terms
Site selection O&M contract heads of terms
Energy yield prediction
Plant design
Permits and licensing
Construction
Commissioning
Operation and maintenance
Economics and financial
modelling
Technology Risk, Completion Risk and
Related Risk Mitigation
Sustainable Business Advisory

April 2012
 Risk Identification, Mitigation & Removal
Ground, weather, access and resource
Site Risks How does resource vary monthly and annually? What is
the confidence level?

Issues that could affect construction milestones,

Completion Risks particularly energisation

Technology Risk Is the technology proven? Is it suitable for the site?

Issues that could affect project revenue over the project life
Operating Risks Are there contractual or physical mitigants?

Assess the volatility of cashflow

Financial Risk Are mitigants in place?
 Completion risks
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 Completion risks

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 Supply chain

Module Inverter
Module supply eased Talk of quality inverters
since 2008, but quality become issue
tightening
Range of quality Range to types &
quality/suitability
Bankability Bankability

Supply chain problems lead to:

Technology risks
High prices / poor contract terms
Extended project schedules
 Completion

Trial Operation (10 days - 4 Acceptance

weeks) Provisional Acceptance
Reliability of: Final Acceptance
Inverters (12-24 months later?)
Tracking
Whole System
Performance Ratio Tests
Sapphire construction / completion issues

13
 Technology Risks - Modules
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 Inverters very important component!

Quality counts
Reliability
Suitability
Maintenance response
 Inverters

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Soil Consistency and Stability

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 Tracking systems

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Key Messages
 Risk Identification, Mitigation & Removal
Ground, weather, access and resource
Site Risks How does resource vary monthly and annually? What is
the confidence level?

Issues that could affect construction milestones,

Completion Risks particularly energisation

Technology Risk Is the technology proven? Is it suitable for the site?

Issues that could affect project revenue over the project life
Operating Risks Are there contractual or physical mitigants?

Assess the volatility of cashflow

Financial Risk Are mitigants in place?
Post Construction Risk and Related Risk
Mitigation
Sustainable Business Advisory

April 2012
 Risk Identification, Mitigation & Removal
Ground, weather, access and resource
Site Risks How does resource vary monthly and annually? What is
the confidence level?

Issues that could affect construction milestones,

Completion Risks particularly energisation

Technology Risk Is the technology proven? Is it suitable for the site?

Issues that could affect project revenue over the project life
Operating Risks Are there contractual or physical mitigants?

Assess the volatility of cashflow

Financial Risk Are mitigants in place?
 Energy Yield Prediction Accuracy
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 Energy Yield Prediction Accuracy

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 Operating Risk

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 Inverters

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 O&M contract
Operational risk mitigated by a robust O&M contract
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 Financial Risk

Can the project generate sufficient revenue to cover

annual debt payments and operating costs?

To assess the financial risk carry out a sensitivity

analysis i.e. modify financial model input parameters
according to stress test scenarios
 Financial Risk

Stress test scenarios:

Annual module degradation 0.3% - 0.5% - 0.8%
O&M costs 10%
Inverter replacement- once over project life?
Module soiling losses: 2% , 3%, 4% (O&M dependent)
Unavailability: 99%, 98% and 97% (dependent on grid strength)

Reduce the likelihood or impact of the risk

Module cleaning linked to performance monitoring
Include a maintenance reserve account

Yield is often skewed to the summer months

Include additional financial reserves to ease financial strain
 Sapphire Industrial Infrastructures 5 MW PV
Project, Tamil Nadu, India

Energy yield prediction

Only one resource database considered
Uncertainty and confidence in prediction not considered (P90)

Operation and Maintenance

Site found to suffer from extreme soiling - cleaned continuously
String level performance monitoring not undertaken
 Key Messages
Resource risk:
Uncertainty in energy yield prediction is dominated by
resource uncertainty
Use several resource datasets
Understand the uncertainty and probability of exceedance in
energy yield prediction (P90)

Operating risk
Use experienced O&M contractors
Have a well defined O&M contract with performance targets

Financial risk
Carry out appropriate stress tests
Reduce the likelihood or impact of stress scenarios

 SgurrEnergy

Leading independent engineering consultancy

International
- Glasgow (UK Head Office)
- Portland , Maine (America)
- Paris (France)
- Beijing (China)
- Pune (India)
- Wexford (Ireland)
- Vancouver (Canada)

Experienced
- Over 100 responsive engineers and
consultants

Professional
- Triple accreditation to British quality
standards
 Leading position by experience
We have consulted on over 65,000 MW of renewable energy in over 30 countries covering both project
development and due diligence

Europe Asia Africa

Belgium China Angola
Bulgaria India Kenya
Estonia Korea South Africa
France Pakistan Oceania
Germany Sri Lanka Australia
Greece The Philippines New Zealand
Ireland Turkey
Italy Vietnam
Malta North America
The Netherlands Canada
Poland USA
Portugal
South America
Russia
Brazil
Romania
Chile
Slovakia
Galapagos Islands (Ecuador)
Spain
Sweden
UK
 Any questions?

ben.lumby@sgurrenergy.com

41
 IFC Advisory engagement in India to support new markets and
business models in Solar energy
Ongoing Activities

Projects Focus
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for greening telecom towers and community power 5HSOLFDWLRQLQ0DUNHW

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efforts in Rajasthan (3GW+)

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Activities under development

Projects Focus
Concentrated Photo Facilitate pilot trials to validate financial and technical feasibility of business models
Voltaics Status - Help create business model for Solar CPV to have the technology adopted in India

Lighting Asia Expand the usage of Solar Lanterns and the concept of micro grids through supporting business models and industry
standards Status - Evaluating the market and the business models

Rooftop Solar Scale-up PPP business model

expansion Expansion into creating business models for private home owners to own and operate rooftop solar projects
Status - Evaluating the different potential PPP transactions
 Case Study Thin Film 5 MW Solar Plant in India
Client Need
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