EQ Int'l Dec'13 Edition

EDITORIAL UN Climate Change Conference in Warsaw keeps governments on a track towards 2015 climate agreement The UN Climate Change Conference in Warsaw this December , keeping governments on a track towards a universal climate agreement in 2015 and including significant new decisions that will cut emissions from deforestation and on loss and damage . “Warsaw has set a pathway for governments to work on a draft text of a new universal climate agreement so it a ppears on the table at the next UN Climate change conference in Peru. This is an essential step to reach a final agreement in Paris, in 2015, ” said Marcin Korolec, President of the COP19 conference. The Warsaw Framework for REDD+ is backed by pledges of 280 million dollars financing from the US, Norway and the UK. Developed countries, including Austria, Belgium, Finland, France, Germany, Norway, Sweden, Switzerland have also paid or pledged over 100 million dollars to add to the Adaptation Fund , which has now started to fund national projects.

In the words of Ben Warren, The Intergovernmental Panel on Climate Change’s latest report concludes with 95%-100% certainty that climate change is caused by human activity. This, combined with other fundamental factors such as continuous population growth, accelerated urbanization and increasing power consumption across emerging markets, highlights the desperate need to focus on the low-carbon energy strategies of tomorrow. Renewable technology innovation therefore represents an opportunity. given we are currently exploiting only a fraction of the world’s natural renewable rescuers, we need to stretch our ingenuity and utilize all the elements around us to maximize the potential of renewable energy, rat hat than just relying on the cheapest sources today.

Solar PV Market Worldwide in 2015 “Despite several recent viewpoints claiming that the PV installations could reach up to 55 GW in 2014 and will be coupled with supply constraints and major price increases, the latest quarterly update on solar demand from IHS disagrees significantly with these views and expects installations to be in the range of 40-42 GW next year. Installations will reach 35 GW in 2013 (unchanged since our March 2013 forecast) and IHS has re- confirmed our earlier prediction that 2014 installations will be ~40 GW - An increase of 15%. It is forecasted that in 2014 China will install 9.5 GW. IHS estimates that emerging PV markets added 5.4 GW of capacity and will grow to 7.7 GW in 2014.

The cases of Chile and South Africa show just how long these huge GW pipelines take to progress with just 100 MW and 200 MW installed in 2013 respectively. Brazil is also another good example of the difficulties PV still faces in emerging markets.

Despite PV being allowed to compete in the recent bidding process, not a single PV project was selected (as predicted by IHS) due to extremely low prices that were achievable from equivalent wind projects.

Despite the above risks, IHS remain positive about the solar industry with double-digit growth forecast for 2014 and a return to improved profitability for many companies. IHS expect 40 GW is certainly achievable (even in light of above risks) but do not expect any possibility of demand reaching 55 GW. The European solar photovoltaic (PV) market is poised to recover during the fourth quarter of 2013 (Q4’13), after an 18- month downturn that redefined the role of Europe within the global solar PV industry.

Amid new signs that solar market conditions are improving and major suppliers are increasing production, IHS Inc. (NYSE: IHS) is raising its forecast of photovoltaic (PV) capital spending.Global capital spending in 2014 by producers of photovoltaic (PV) modules, cells, ingots, wafers and polysilicon will rise by a robust 42 percent to reach $3.3 billion.The new forecast also calls for 32 percent growth in 2015 to reach $4.3 billion, a major upgrade from the older forecast of 5 percent growth, according to the IHS PV Manufacturing & Capital Spending Tool.“Things are looking brighter throughout the solar industry as PV demand climbs and spreads to new regions,” said Jon Campos, lead PV capital spending analyst at IHS.This year the emerging markets and Southeast Asia account for 7.9 gigawatts (GW) of the world’s total announced capacity for PV materials and products from ingots through modules. Such a volume represents 3 percent of the global market.The areas have the potential to rise to more than 18GW by 2017, which would be equivalent to 6 percent of the worldwide business at that time.

Anand Gupta Editor & CEO

INTERNATIONAL

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SOLAR INVERTERS

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“Why String Inverter Technology Is Beneficial Even In Very Large PV Plants”

ANAND GUPTA

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Cover

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Pennar Industries is India’s largest supplier of Fixed and Tracking Solar Structures $KPHGDEDG %DQJDORUH %DURGD &KHQQDL &RLPEDWRUH 'HOKL +\GHUDEDG ,QGRUH .RONDWD 0XPEDL 3XQH

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Pennar Industries Limited is one of the leading engineering organizations in India and is well known for its expertise in providing engineered products & services. An epitome of quality, precision, and perfection, Pennar caters to various segments such as Infrastructure, Automobile, Power among others .

Pennar is a market leader in Solar Module Mounting Structures having catered to the requirements of close to 500 MW of capacity.

SOLAR ENERGY

INTERVIEW

SOLAR INVERTERS

CONTENTS

Nitin Bhosale

Marco Alves

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Sales Director Asia Pacific

INTERVIEW

SOLAR ENERGY

China Sunergy (Nanjing) Co Ltd

Hitesh Doshi 28

Chairman & Managing Director

Pramod V. Hargude 29

WAAREE Group

EQ BUSINESS & FINANCIAL NEWS 6-12

Advanced Energy: - Another Sound Quarter Reflecting the Significant Progress

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Contour Following Structures

SOLAR ENERGY Solar Tracking Increases Energy Yield: Position Sensors For The Photovoltaic And Solar Thermal Industry

Recharging the Indian Power Sector How To Turn Around The India’s Power Sector By 2018

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Tamil Nadu Electricity Regulatory Commission Karnataka Electricity Regulatory Commission Determination Of Tariff For Grid Interactive Solar Power Plants Including Rooftop And Small Solar Photo Voltaic Power Plants Rajasthan Electricity Regulatory Commission, Jaipur Punjab State Electricity Regulatory Commission

Martifer Solar O&M, Service For Customers

Dr. Florian Wessendorf Photovoltaic machinery industry expects revitalization of the market for 2014

QUARTER RESULTS 50

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POLICY & REGULATION 38

SOLAR MOUNTING STRUCTURE

Successful commissioning of Roof Top solar power plants by Godrej & Boyce

CONVENTIONAL POWER

SOLAR INVERTERS 16

Commercial Roof Top Project With Refusol String Inverter

SOLAR PV MANUFACTURING

Michael LIU

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SunEdison’s Third Quarter 2013 Reflects Improved Execution Despite ....

Canadian Solar Expects Module Shipments To China And Japan To Be The Main Drivers Of Demand ...

Jinko Solar’s Second Consecutive Quarter Of Profitability Renesola: - Experiencing Growth Due To Increasing Geographic Diversity `Trina Solar :- Delivered Better-Than-Expected Performance First Solar Ends Third Quarter With Increased Net Sales Yingli Green Energy:- Rapid Growth Expected in China, ..

Indian Solar Market – Forecasting a Better 2014 after a Lackluster Year

& EQBusiness Financial Vikram Solar Promotes National Solar Manufacturing Capacity Vikram Solar, which is developing a solar module with 100 per cent domestic raw materials, is firmly committed to advancing the public policy goals of the nation. Its endeavour would surpass the domestic content requirements laid down by the Ministry of New and Renewable Energy for the Jawaharlal Nehru National Solar Mission.The guidelines for the ongoing Phase II Batch I of the national solar mission stipulate that 50 per cent of the total 750 MW of solar power projects under this batch must be set up using solar cells and modules which are made in India. Vikram Solar is working on plans to launch its solar modules which will use not only made-in-India solar cells as required under the policy but go beyond that to also ensure that other raw material such as glass, EVA, back sheet

and frames are also procured from Indian manufacturers.

Speaking about the efforts, Mr. Sunil Rathi, President, Sales, Vikram Solar, said, “Use of local raw materials will ensure low leadtime and inventory benefits while offering faster turn- around time for executing Indian solar project thereby leading to a win-win situation for all”.According to Mr. Ivan Saha, President and Chief Technology Officer of Vikram Solar, the company follows a rigorous process of engineering evaluation of the bill-of-materials used in PV modules and is in the process of identifying quality Indian raw material suppliers in order to ensure highest quality and reliability of their 100% ‘Made in India’ modules, which are targeted for launch by early 2014.“With this effort Vikram Solar is aiming to develop the

eco-system of the Indian Photovoltaic sector, and hopes to contribute in a big way to make it competitive.”, Mr. Saha added.

Vikram Solar is an internationally acclaimed enterprise which specializes in manufacturing of PV solar modules. It is headquartered in Kolkata and is part of the Vikram Group of companies, boasting of a glorious history of over 35 years in engineering and manufacturing activities.Vikram Solar’s facility, located in the Special Economic Zone (SEZ) of Falta, West Bengal, is spread over a sprawling 40,000 sq ft area and boasts of a 150 MW installed production capacity.

They are among the most technologically advanced in the world. Apart from catering to the pan-India market, Vikram Solar has a global presence with offices in Europe and Africa.

Sunedison Launches Solar Water Pumps In India SunEdison, a provider of solar technology and solar energy services, on Thursday launched a solar photovoltaic (PV)-based water pump designed for the agriculture sector. Intended for use in rural environments, the water pump is available in 3HP (horsepower), 5HP, 7.5HP and 10HP variants.

The solar water pump, which will cost around Rs 6 lakh, would help increase crop yield by delivering reliable irrigation without dependence on expensive diesel fuel or intermittent electrical power supply, Pashupathy Gopalan, president, SunEdison, Asia Pacific, GCC and South Africa, said.

There are currently about half a million

farmers in Tamil Nadu alone who are still awaiting power connection to irrigation pumps and the company will focus on segments like these.

“The power will be available to farmers during the day and they will not have to depend on grid power which is supplied to them only for a few hours during the night,” Gopalan said.Of the 26 million irrigation pumps in the country today, about 8 million run on diesel power with the rest using grid power. Solar pumps will help electricity supply companies, state electricity boards and surrounding communities by reducing the strain on the grid, according to Gopalan.

It would empower farmers to grow cash crops that require predictable irrigation and enable them to utilize land that they previously could not irrigate, he added.The company has already installed 250 such systems across India.The next generation of the solar pumps, which the company is planning to launch, would supply power to farmers’ houses as well, Gopalan added.

Komax Solar receives again large equipment orders Komax Solar just received two large orders for module production equipment, one in Europe and one in China. Both orders are in the multi-million USD range.

In China, the customer has decided to go with Komax Solar for the capacity expansion of his factory. Also this expansion is implemented by installing X2 Turbo stringers.

In Europe, after a year-long partnership with Komax Solar, the customer is currently expanding its capacity both by upgrading the existing installed base with the Turbo Upgrade and by installing additional equipment. The Turbo Upgrade increases the productivity of the existing Komax X2 stringers by about 25%. The newly installed Komax X2Turbo stringers offer a productivity of 1500 cells per hour.

As a result of the high order entry level, Komax Solar has presently a significantly increased order backlog. Thanks to continued high investments in technology and product development, Komax Solar offers its customers leading technology, productivity and cost of operation.

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EQ December 2013

Komax Solar is a leading global supplier of equipment for the solar module production.

Itbelongs to the Komax Group, which announced to start a process to sell this business unit.

The planned change of ownership will hardly have any impact on the business relationship for customers of Komax Solar, as business will continue as usual also under new ownership.

In addition, the Komax Group can guarantee as a back-up continued professional support such as service and spare parts also in the long term.

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& EQBusiness Financial AEG Power Solutions Commissions a Major Solar Project for Nahar Group in India.

AEG Power Solutions, a leading global manufacturer of power electronic systems and solutions for industrial power supplies and renewable energies, commissioned a major PV based power project with a new customer Nahar Group – a leading corporate company in India.Located in Bikaner (Rajasthan); the 5.83 MWp project is equipped with high efficiency crystalline modules and connected to a 33 kV grid.

The scope of the contract covered design engineering procurements installation and commissioning by AEG PS team. On the balance of systems AEGPS Protect PV.630 inverters supported by skytron® energy monitoring solutions were used. The project is executed under the REC (Renewable Energy Certificate scheme).

The project was executed in tough geotechnical conditions in open fields under high temperatures of 48° C and is a testimony to AEGPS‘ commitment. Always leading through innovation, AEG PS aims to continually deliver improvements to power solutions across the globe.

“We at Nahar Group establishing ourselves as a leader in the Indian textiles and export garment industry, ventured into the renewable energy with investments in wind power generation. Nahar Group further plans to expand its wings in this sector through strategic approach and we are extremely happy to have partnered with AEGPS, known for their premium quality and high effi cient products world over. Their high degree of commitment, professionalism and transparency was evident throughout the

project and they successfully commissioned it under very tight schedules”, Mr Sandeep Jain, Executive Director of Nahar Group said.

“We are very proud to be associated with Nahar Group a leading player in the textile industry with a global footprint, in executing this 5.8 MWp solar power plant. We firmly believe that the quality oriented plant performance leads to future growth and more value based opportunities. Our project expertise, high efficiency inverters and world class skytron’s monitoring solutions are some of the key features that helped to deliver this high energy yielding solar power plant. . This is a first step towards a successful association between AEGPS and Nahar Group,” said Sridhar Murthy, Managing Director of AEG Power Solutions in India.

IHS Boosts Solar Capital Spending Forecast as Market Conditions Continue to Improve Amid new signs that solar market conditions are improving and major suppliers are increasing production, IHS Inc. (NYSE: IHS) is raising its forecast of photovoltaic (PV) capital spending.

Global capital spending in 2014 by producers of photovoltaic (PV) modules, cells, ingots, wafers and polysilicon will rise by a robust 42 percent to reach $3.3 billion, as presented in the attached figure. IHS previously expected an increase of 37 percent for the year. The projected expansion in 2014 will mark the end of a two-year period of contraction in spending that resulted from slowing growth and massive oversupply in the industry.

The new forecast also calls for 32 percent growth in 2015 to reach $4.3 billion, a major upgrade from the older forecast of 5 percent growth, according to the IHS PV Manufacturing & Capital Spending Tool.

“Things are looking brighter throughout the solar industry as PV demand climbs and spreads to new regions,” said Jon Campos, lead PV capital spending analyst at IHS. “In light of improving sales, PV companies are increasing production. Major manufacturers are indicating that the vast majority of their production upsurge will come from internal resources, requiring even greater 8

EQ December 2013

increases in capital spending than previously expected.”

The solar market in 2012 and 2013 struggled with an oversupply situation that led to massive erosion in pricing and financial losses for suppliers. However, the two-year decline in capital spending has resulted in a capacity correction, bringing supply and demand into closer alignment. IHS expects supply and demand to return to balance by late this year or in the first half of 2014.

At present PV manufacturers are starting to ramp up production, with many already running at full utilization. However, distinctions must be made between shortterm events now unfolding and strategic developments percolating for the long haul.

“Some companies have engaged in contract manufacturing of products from Tier 2 and Tier 3 suppliers to meet sharp increases in demand,” Campos said. “However, sources from multiple Tier 1 players, as well as from smaller companies, have verified that this is a short-term, small-scale tactic. Long-term, large-scale increases in production during the next few years will be accomplished via increases in internal capacity.”

No. 7-ranked solar cell supplier SunPower of California plans to increase its solar cell production capacity by 25 percent, or 350 megawatts, by 2015.

The company said that Japan and Latin America are particularly strong growth areas and that emerging markets may be the impetus for the further expansion of the industry.

This year the emerging markets and Southeast Asia account for 7.9 gigawatts (GW) of the world’s total announced capacity for PV materials and products from ingots through modules. Such a volume represents 3 percent of the global market.

The areas have the potential to rise to more than 18GW by 2017, which would be equivalent to 6 percent of the worldwide business at that time.

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& EQBusiness Financial CDC commits US$25m to India’s Renewable Energy Sector to electricity, which is critically limiting opportunities for people and businesses.

Many businesses currently rely on expensive diesel generators to ensure business continuity. Even for those connected to the grid, blackouts are common and capacity shortages mean that a number of Indian states suffer shortages of a third or more of their peak power demand, according to Central Electricity Authority figures. India currently relies on fossil fuels to meet its energy needs, with coal and oil together accounting for two-thirds of primary energy.

The Government has identified wind power as a sustainable way to address the deficit, due to its clean credentials, short execution cycle and competitive cost relative to traditional power generation.

are expected to result throughout the manufacturing and supply chains. All of the wind turbines and the majority of other plant equipment will be purchased in India, resulting in additional economic benefits to communities surrounding both the generation and manufacturing plants.

Shivanand Nimbargi, Green Infra Managing Director and Chief Executive, concurred:

India’s infrastructure sector – and the power sector in particular – is in urgent need of large-scale investment, acknowledged by the Indian Government’s commitment to add 88,000 MW of generating capacity by 2018. Yet the country’s rapid growth is outpacing development in traditional power generation, which is expensive and slow to build, and whose CO2 emissions are imposing an additional burden.

Green Infra has grown its generating capacity to 387 MW across 18 assets in six Indian states, with more than 90% of its generation capacity from wind. The CDC investment, part of a US$125m overall financing round, will allow Green Infra to reach its targeted capacity of 1,000 MW of generating assets by 2016, the equivalent of 5% of India’s current wind capacity [Government of India, Ministry of New and Renewable Energy].

The additional capacity will reach almost 1,000,000 people across four Indian states and, as clean energy, will save close to 18 million tonnes of CO2 emissions over the life of the assets.

According to the Organisation for Economic Development and Cooperation (OECD) and the International Energy Agency (IEA), in 2012 India suffered a peak power deficit of 9%. Over a quarter of the population – more than 300 million people - lack access

Infrastructure projects create jobs, and Green Infra’s expansion will result in significant new employment opportunities.

Around 600 jobs will be created directly in the construction, operation and management of the new assets, and another 250 jobs

Growth capital invested in Leading Renewable IPP Green Infra Limited CDC Group plc, the UK’s development finance institution (DFI), announced today that it is investing up to US$25m in Green Infra Ltd. (‘Green Infra’), one of India’s largest independent renewable power producers.

CDC is investing alongside the private equity arm of IDFC Alternatives, India’s leading infrastructure-focused investor. Green Infra will use the capital to expand its wind and solar power generation capacity through a combination of organic growth and selective acquisitions.

To reduce poverty and achieve its human development goals, India will need to return to and maintain economic growth of 8-9% over the next 20 years. Meeting the energy requirements for growth of this magnitude will be an enormous challenge, and to do it in a sustainable manner makes it even more difficult.

According to Srini Nagarajan, CDC’s Regional Director for South Asia: “Access to reliable electricity has been identifi ed by the World Bank and other experts as a key enabler of development.

Our investment will increase access to electricity through renewable power. It will help businesses to develop and grow, create new and better jobs, and improve the lives of millions of people in India.”

“We are delighted to have CDC’s investment, which will help us in contributing to the local community by way of jobs and development, in addition to reducing the carbon footprint and increasing our generation capacity.”

IDFC, which CDC helped to found in 1997, is a highly respected infrastructure financier and long-standing CDC investment partner.

Its subsidiary IDFC Alternatives is one of India’s leading alternative investment managers. Because many investors are unwilling to accept the higher risks and lower returns resulting from a combination of development-stage risk, possible execution delays and currency volatility, development capital from CDC and IDFC Alternatives is important to both creating impact and restoring investor confi dence in India’s infrastructure sector.

Mr. Deepak Gupta former MNRE Secretary joins National Solar Energy Federation of India – NSEFI as Director General, Mr. Pranav Mehta as Chairman.

Mr. Deepak Gupta(IAS Retd), former MNRE Secretary, who played a key role in planning India’s National Solar Mission and presided over the execution of JNNSM Phase -1, has joined the National Solar Energy Federation - NSEFI as Director General recently. “ It was a unanimous decision to invite Mr.Deepka Gupta as Director General NSEFI in view of his deep insight in the 10

EQ December 2013

area of Solar Energy, vast administrative experience of working in the Govt. Of India and equally importantly in view of his passion for Solar Energy” said NSEFI Chairman and solar industry veteran, Pranav Mehta “ I have no doubt the umbrella organization of solar industry - NSEFI will grow from strength to strength and contribute meaningfully to India’s solar landscape under

the able guidance of Mr. Deepak Gupta” observed Anil Jain, MD, Refex Energy a leading solar EPC company of India.Mr. Deepak Gupta’s joining NSEFI as Director General has been welcomed by equal applause by the industry and government circles.

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& EQBusiness Financial Dr Farooq Abdullah announces New Initiatives to bring Clean Cooking Technologies to Rural India during the India Clean Cookstove Forum 2013 With the vision of enhancing the use of improved cookstove technologies, envisaged under the National Biomass Cookstove Programme (NBCP), Dr Farooq Abdullah, Minister of New and Renewable Energy inaugurated the India Clean Cookstove Forum 2013 organised jointly by the Ministry of New and Renewable Energy and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH operating on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).

Speaking on the occasion, Dr Farooq Abdullah said “increased use of clean and efficient cookstoves is crucial to reduce the burden of disease from indoor air pollution as well to avoid the overuse of biomass

resources. Efficient cooking technologies have a direct tangible impact on the livelihoods of the poor, as they save time and money that previously had to be spent on procuring cooking fuels.”

During the Forum, the Minister launched a new initiative on biomass cookstoves developed under the Clean Development Mechanism (CDM) of the United Nations Frameworks Convention on Climate Change to reduce the cost of improved stove technologies to rural customers through the sale of carbon credits. He added that this is just one of several joint efforts to provide clean and reliable energy to rural areas and these initiatives have further endorsed the close relations and cooperation between India and Germany.

Mr. Heiko Warnken, Head of the Development Cooperation, German Embassy highlighted the importance of cooperation between India and Germany on renewable energy attributing it to the relevance for both poverty alleviation and environmental sustainability, as well as the energy needs of the vast rural population for cooking and income-generating activities. He added that this is just one of several joint efforts to provide clean and reliable energy to rural areas and these initiatives have further endorsed the close relations and cooperation between India and Germany.

India, Belgium agree to enhance cooperation in Renewable Energy India and Belgium have agreed to work on signing an MOU to enhance cooperation in renewable energy. This was discussed at a bilateral meeting between Dr. Farooq Abdullah, Minister for New and Renewable Energy, Government of India and Her Royal Highness Princess Astrid of Belgium. Princess Astrid is currently visiting India as head of the Belgian Economic Mission to India. She is accompanied by Mr. Didier Reynders, Deputy Prime Minister and Minister for Foreign Affairs, Foreign Trade and European Affairs and Mr. Kris Peeters, President of the Region of Flanders and Flemish Minister for Economic, Foreign Policy along with a large business delegation.

Dr. Abdullah briefed the visiting delegation on the energy situation in India and the rapid growth of the renewable energy sector in

India. He spoke of India’s plans to add over 30 GW of renewable energy to its energy mix in the next 5 years. He dwelt on the success of the wind programme as well as the significant cost reductions in solar energy through the Jawahar Lal Nehru National Solar Mission (JNNSM). He also highlighted India’s conducive and investor friendly policy framework for promoting renewable energy in a big way. Dr. Abdullah suggested that India and Belgium had great potential for enhancing cooperation in promoting renewable energy and offered to provide all possible assistance for the purpose.

The Belgian delegation recognized India’s considerable achievements and strengths in renewable energy and noted that India had made large strides in this field. The business delegation accompanying the official

delegation also made brief presentations on their activities and reciprocated India’s desire for enhanced energy cooperation between the two countries.

After detailed discussions, the two sides agreed to start work on a Memorandum of Understanding (MoU) in the fi eld of Renewable Energy between the Ministry of New and Renewable Energy of the Government of India and the Government of Belgium in order to strengthen, promote and develop renewable energy cooperation between the two countries on the basis of equality and mutual benefit. Both countries also agreed to explore possibilities of coordination in renewable energy through joint Research and Development programmes of mutual interest.

Mahindra EPC’s Successful Comissioning Of Solar Projects In Tamil Nadu After the successful commissioning of over 80MW of solar projects across India, Mahindra EPC is pleased to announce the successful commissioning of its first solar projects in Tamil Nadu, which were executed in a record-breaking 40 days for some of India’s leading automotive component manufacturers. It gives us immense pleasure to inform you that these captive consumption installations were commissioned under the 12

EQ December 2013

REC Scheme, making this a one-of-a-kind project in Tamil Nadu – and proving the economic viability of solar PV for such applications.

At a pan-India level, Mahindra EPC continues to Rise through the country’s solar sector. We are confident that our cost-effective, highquality, and reliable services will maximize the value of our client’s solar investments

and will help us maintain our leadership in the solar EPC space.

This milestone marks a key victory for the booming solar PV industry in India and we humbly invite you to join us in celebrating this achievement along with the members of M.M Forgings, Super Auto Forge, IM Gears, Rane Group and Autotech Industries Pvt. Ltd.

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The right solution for Photovoltaic Power Systems.

More than 500 MW PV projects already equipped with Bonfiglioli Inverters in India.

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I NT ERV I EW

Sunil Rathi

President Sales and Marketing Vikram Solar Pvt Ltd.

EQ : What’s the current production capacity of your company?

SR : We are currently having a PV module manufacturing capacity of 150 MW per annum at our State of the Art plant at Falta, near Kolkata, West Bengal.

EQ : What is the unique advantage in being a vertically integrated manufacturer SR : The advantage is that we are able to improve the efficiency along the value chain by cutting out waste and leveraging our scale.

EQ : How much has been the sale to India and what does the future look like SR : Last year domestic market was extremely good. Most of our sale is in India but we are rapidly expanding our exports portfolio. With the implementation of the Jawaharlal Nehru National Solar Mission Phase 2 already started, and so many state governments coming out with their own solar policies and programs, the future is looking as bright as the afternoon sun on a May Day in Delhi! However, it is also worth noting that due to non-availability of MNRE subsidies in 14

EQ December 2013

the current financial year, the domestic sale of rooftop systems was muted. The market was also waiting for most part of the year for the launch of the Phase 2 of the JNNSM which happened in the last quarter only.

EQ : What potential do you envision in India’s Market in near and Mid-Term Future?

SR : The potential is immense! Already the central and state governent’s solar programmes have created a sizeable market in India but the real inflection point will be reached when solar power reaches grid parity. One research study has shown the potential of generating 2GW of solar power on Delhi rooftops alone! Imagine the scale if all the cities in India were to have solar power plants on rooftops of each building!

EQ : What changes have your experienced in selling PV in last 5 years SR : There has been a metamorphosis!

Complete transformation! That’s because of the rapid reduction in prices of solar modules which has led to vast improvements in its commercial viability. All this has been made possible because of the government’s

announcement of the national solar mission and such other measures by the state governments as well as global fall in prices of raw materials. The most important factors is that finally solar power is becoming commercially viable due to increase in electricity prices and rapid reduction in solar power prices, even without subsidies.

Other market developments such as open access and open PPA have also helped in the development of the solar market.

EQ : What’s the roadmap for production ramp up for your co and further growth in terms of technology, output of your products SR : We have an ambitious growth plan.

Current manufacturing facility is 150MW which we are increasing substantially in the near future. Suffice it to say that we are on an exciting growth journey.

EQ : The Volumes in India will ultimately come from Rooftop/ Off Grid or Large grid Connected Systems SR : Doubtless, the large grid connected systems is where the volumes will come

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from, as the name suggests, these are large systems. However, the rooftop and off-grid systems are equally important in terms of their ability to provide last mile connectivity to the consumer. Unique advantage with rooftop is zero transmission & distribution losses. Looked at from public welfare point of view, the off-grid systems are crucial since they provide power to the rural and remote areas which are un-served or under-served by conventional power networks.

EQ : Start of 2013 we saw many states coming up forward with tenders close to GW of Projects…How much do you think is possible to achieve in 2014 SR : It is best not to make conjectures, let us see what happens! We hope all the projects which are tendered actually take off the ground.

EQ : JNNSM new guidelines, VGF & DCR Rules…Whats you comments on the same.

SR : On the VGF, we think this is a

good idea which will help to bring down the project cost in an open and competitive way, though we would also like to alert against hyper competitive pricing which can be self damaging. On the DCR, we think that it is a good idea to insist on made in India solar module – since there is enough capacity and good quality available in the country. We believe that the government must find ways to support the manufacturing of solar PV cells in India for the next few years, through schemes such as the SIPS, and then only go for mandatory cells requirement.

EQ : REC Mechanism has disappointed Investors…What are your views on the future of the same.

SR : The REC mechanism is directly dependent on how seriously the transcos and discoms are implementing the RPOs, and SPOs, if any. If there is no penalty for violating the RPO requirements, there is no pressure to generate renewable power, and therefore no need for RECs! In this context we salute the states where the RPOs are now being enforced.

We think REC benchmark price need to be revised.

EQ : Open Access, Concessional Wheeling, Transmission, Cross Subsidy etc…is the key to achieve huge installations in India…What are your views on the Private PPA Market SR : Private PPA market will develop as the overall power market in India develops and matures. The key question is the financial status of the power companies. This in turn is dependent on the prices customers are able and willing to pay. Unfortunately, there is a lot of politics which has been witnessed around electricity prices which does not bode well for the future of the power market in India. All political leaders have to recognize that consumers will have to pay for the prices of power and that there is no such thing as free power.

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SO L A R I NV ERT ERS

Advanced Energy: - Another Sound Quarter Reflecting the Significant Progress Saumya Bansal Gupta - EQ International

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Revenue of $143 million

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GAAP earnings of $0.02 per diluted share

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Non-GAAP earnings of $0.53 per diluted share

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Ended quarter with $105 million in cash

Advanced Energy Industries, Inc. announced financial results for the third quarter ended September 30, 2013. The company reported third quarter sales of $142.9 million compared with $139.7 million in the second quarter of 2013 and $117.5 million in the third quarter of 2012. Income from continuing operations was $687,000 or $0.02 per diluted share. On a non-GAAP basis, income from continuing operations was $21.7 million or $0.53 per diluted share. The non-GAAP measures exclude, on an after tax basis, $22.4 million in restructuring charges, $3.6 million of stock-based compensation, $549,000 of intangible amortization and a $5.6 million benefit from a non-recurring tax release item. A reconciliation of non-GAAP income from continuing operations and earnings per share is provided in the tables below. It is important to note that based on our current mix of profits our effective tax rate has declined to approximately 12.5%.

The company ended the quarter with $104.7 million in cash and marketable securities, a sequential increase of $5.6 million.

“As we approach the end of 2013, we had yet another sound quarter reflecting the significant progress we are making towards our strategic objectives,” said Garry Rogerson, CEO. “Once again, we returned value to our shareholders by continuing to grow operating

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profit and earnings per share on a non-GAAP basis. Since the beginning of 2013, we have increased our operating income excluding restructuring by nearly 140%, from $7.7 million in the first quarter, to $12.6 million in the second quarter, to $18.3 million in the third quarter. Clearly, we are demonstrating the effectiveness of our low-cost, distributed R&D, centralized manufacturing model. With increasing backlog, a growing number of new products and entrance into new applications and geographies, we believe we are poised for continued profitable growth opportunities as we head into 2014.”

third quarter of 2013, a 5.2% increase from $71.7 million in the second quarter of 2013 and a 32.8% increase from $56.8 million in the third quarter of 2012. The increase was driven by improved conditions across all of our served markets with the exception of flat panel display applications, where OEMs digested recent capital investments.

In addition, we are increasing our penetration of existing applications and expanding into new ones such as environmental and hard coating applications.

Thin Films

Solar Energy sales were $67.5 million in the third quarter of 2013, roughly flat with $68.0 million in the second quarter of

Thin Films sales were $75.4 million in the

Solar Energy

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2013 and an increase of 11.1% from $60.7 million in the third quarter of 2012. Backlog continued to build due to the growing demand for the one megawatt product slated to begin shipping at the end of the fourth quarter and the three-phase string product line.

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Earnings per share of $0.47 to $0.52, excluding restructuring charges of approximately $500,000

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Non-GAAP earnings per share of $0.59 to $0.63

Income from Continuing Operations Income from continuing operations for the third quarter was $687,000 or $0.02 per diluted share, compared with a loss from continuing operations of $9.8 million or $0.24 per diluted share in the second quarter of 2013, and income from continuing operations of $5.7 million or $0.15 per diluted share in the same period last year. On a non-GAAP basis, excluding the impact of the items mentioned above, income from continuing operations grew to $21.7 million or $0.53 per diluted share, from $13.9 million or $0.35 per diluted share in the second quarter of 2013.

Restructuring Activities After the acquisition of the threephase string product line in April 2013, the company undertook a major restructuring to take advantage of additional future cost saving opportunities. These activities include the consolidation of certain facilities, product rationalization and further centralization of manufacturing. During the third quarter, the company recorded a pre-tax restructuring charge of $19.9 million, $18.5 million of which was non-cash. The company has now completed virtually all of these restructuring actions. The total charges related to these activities were $44 million, of which $36.2 million was non-cash. We expect this restructuring to provide additional cost savings in the range of $20 to $22 million annually, including approximately $14 million of cash savings. These cost savings activities, along with those previously announced are expected to deliver annual savings of approximately $72 to $77 million by 2014.

Fourth Quarter 2013 Guidance The company anticipates fourth quarter 2013 results from continuing operations to be within the following ranges assuming a fourth quarter actual tax rate of 0%: •

Sales of $145 million to $155 million

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EQ December 2013

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“Why String Inverter Technology Is Beneficial Even In Very Large PV Plants” Kapil Maheshwari - Head, Solar Inverters, Danfoss India

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et optimal utilization of your area, reduce effects of shading, install your system fast while keeping full freedom, use the built in commissioning, monitoring and control system to secure your investment and avoid expensive maintenance contracts. All the while you get high yields and a continuous stable production.

freedom in the PV installation, even on the backside of PV racks or on existing structures. Using this standard off the shelf commodity, several teams can work in parallel to ensure the plant is quickly up and running.

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PV power plants built with string inverter technology have gained increasing acceptance with installers and project developers alike.

The 80 MW PV plant “Eggebek” and the 12 MW PV plant” Busenwurth” in Germany are just two of the installations experienced site developers have built using the string inverter concept. The concept was originally designed by Danfoss Solar Inverters in Denmark, and has since then gained wide spread acceptance due to the obvious advantages •

Optimal utilization of ground area.

Shading situations may be accepted due to the 3 truly independent MPP trackers and precise control of each string. The tracking resolution is 5kW. This means that more PV can be installed per m2

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Effects of shading situations frequent on rooftops are minimized due to the 3 MPP trackers and the layout flexibility derived from the small decentral units.

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Installation is fast and the inverters light weight, which gives full placement

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EQ December 2013

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Commissioning is straight forward with an installation wizard. One inverter is configured and the settings are then replicated to the rest of the inverter network. Each network may consist of up to 100 inverters and you can have an unlimited number of networks in your plant.

Internal logging of data, full control options for grid support requirements

and upload to external dataware house services ensures full data security.

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Exchange of inverters is easy and no special training is required. Keep a few units on stock as an inexpensive insurance for continued production.

The strengths of modern day string inverters The string inverters of today can match the central inverters’ traditional strong holds of 1000Voc and three phased output. That means that the three phase sting inverters with 1000 VOC, three independent MPP trackers, integrated monitoring and master functionality provide the ideal solution

Detailed monitoring of the inverter network can be made by connecting di...

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80 MW facility in Eggebek Germany uses the string inverter concept, succ...

Desalination plant in Spain. Complex shading situations are no problem b...

for any PV system, free of extra cost or compromise.

Optimal utilization of ground area or rooftop Ground based systems usually cover large areas, and require mounting equipment for the PV arrays. String inverters with three independent MPPTs give you a great advantage.You may place rows closer together accepting shading situations, providing better utilization of the area available. Additionally,

surface space related costs for e.g. cabling is reduced.

A medium to large scale commercial rooftop PV system would often require several rooftops and the area is often partially shaded. The high number of multiple power point trackers (MPPT) combined with the high efficiency of the trackers allow for the best possible yield for every kind of roof, even with shading. A detailed monitoring of module strings is possible without additional hardware.

All requirements from the distributed network operator (DNO), such as power level adjustment or reactive power exchange, are fulfilled. The PV systems can be connected directly to the LV grid, or to the MV grid by using a standard MV transformer.

Easy installation and full placement freedom With a three-phase output on the AC side, and 1000 VDC, you are provided with

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Installing string inverters is easy for the local PV installer, standard...

a high degree of flexibility in selecting the ideal inverter mounting location. Long cable runs can be installed on both the DC and on the AC sides without significant cable losses. Weighting only 35kg the 15kW string inverter can be installed on existing racks or structures, requiring no extra construction work.

The MV transformer station, required for MV grid connection can be a standard station. These are usually reasonably priced and easily available.

Due to the high number of independently working inverters, the total system output will only be limited affected even if there is a high degree of output variation of modules in your plant.

String inverters are light weight (only 35kg) and can easily be mounted ...

The string inverter concept allows the Danfoss TLX inverters to be place...

Straight forward commissioning Configure one and replicate to entire network in one go With integrated master functionality in the string inverter any inverter can be set up as system master. Installers can use the inverter’s automatic installation wizard to simplify installation. The built-in web interface is also used to set parameters required for power adjustment purposes or auxiliary features for the MV network. Via the master inverter it is possible to replicate the setup parameters to every inverter in the plant, saving enormous amounts of time for individual setup. Thus communication cabling and system setup is simplified, which reduces installation time and error potential.

To document system performance a forced PV sweep of all strings can be performed from the master inverter, providing detailed information of the condition of the entire installation, including current, voltage and fill factor down to every 5kW string. This can be used for later reference of performance, by making the same forced sweep at a later stage.

Data security With a data logging, monitoring and control system integrated, external sensors for temperature and irradiation can be connected directly to a master inverter, enabling easy integration of the reference

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performance monitoring. Thus a system based on advanced string inverters comprises a complete verified system from a single manufacturer.

For monitoring you can use the builtin Web interface, for easy overview of the installation. For increased data security and extra backup the master inverter can be set up to automatically send data to data warehouse services, using its built-in FTP upload feature. Through online portals like the free CLX portal it is possible to carry out standard plant monitoring down to detailed error analysis. Data down to individual string level is transferred for central storage and monitoring of long term effects.

Ensure constant power supply No special training is required to be able to install, maintain or exchange string inverters. The local electrician can maintain the string inverter installation, meaning that service contracts requiring specialists from the inverter manufacturer are not required.

Furthermore, as you can omit junction boxes, no service on the DC side is required. Keep a few units on stock as an inexpensive insurance for continued production.

All in one By using a string inverter solution you get the flexibility, yield and efficiency expected from a modern day PV system, as well as fast and reliable installation and commissioning and a full monitoring solution.

All from the same manufacturer.

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Kiran Kumar Munaga, AVP – Operations, Nuevosol Energy Private Limited

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egapower plants require large tracts of land. With immense pressure on reducing the overall cost of the plant, most often the land procured turns out to be uneconomical for reasons like weaker soils leading to heavier foundations or rocky strata leading to higher excavation costs. One main factor which makes many projects uneconomical is the levelling costs associated with huge tracks of sloping terrains. Mounting structures play a huge role in avoiding these time consuming tasks of levelling and grading.

This is by following the contour of the land to accommodate the slopes and allow the strutcure to adpat to the natural contour of the land.

The Need To Follow Contour: The landon whichthe structures should be installed may not always be flat and picture perfect. Thus, following the contour is a smart approach; it is both economical and a quick way to install structures when compared to grading or levelling activity.Ground levelling and grading are very time consuming, expensive, difficult and need expertise to perform. And in this age of adaptability, this is a very unlikely solution that is to be suggested to the client. Thus, the contour should not be changed to accommodate the structure, but the structure should be designed to follow the contour.

When the levelling and grading of highly undulated land is conducted, there is a possibility of altering the soil properties and compactness of the upper strata, which can have an impact on the foundation pull out strength.

Following The Contour: Following contour means installing structures that follow uneven terrain with minimal changes to the natural undulations of the ground.In this methodology, the tables are installed on the same plane and are not

at different levels as given in the image below.

Types Of Contour: Uni-directional:In this type of contour, the undulations will be either in N-S direction or in E-W direction. Customizing for these contours is comparatively easy as the design varies in single direction.

to be maintained simultaneously.

Advantages Of Following Contour: 

This is an economical solution – as opposed to levelling of land that is a time consuming and expensive method.

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When the natural condition of the ground is not disturbed, we are not impacting the natural drain system therefore one does not have to perform major activity for drain system.

Bi-directional: These types of contours have undulation in both N-S and E-W direction, making it more difficult to designand install.

Method of installation varies with the type of contour that is being dealt with.

These methodologies have to be developed through a collaborative approach between the design team and installation team to ensure the structure is optimized for cost and ease of installation. This approach helps the installation team to avoid any onsite difficulties while installing the structures.

Operational Challenges Installing contour following structures requires a systematic methodology to analyse the contour and develop a solution.

An accurate contour analysis should capture the types of slopes and the extent of slopes.

Given the dynamic nature of the ground,a single methodology cannot be followed for all contours; based on the inputs from the contour analysis the methodology should be finalized.

Alsobased on the contour analysis, inputs have to be incorporated in the design stage to provide the requisite adaptability to the structural members.

Usually installation in plain lands doesn’t call for skilled labour. But in installation of contour following structures the teams need to be trained to perform installation as per a detailed methodology i.e. whether for unidirectional contours or bi-directional contours.

This is because the foundation depths keep varying and the angle of installation needs

DisadvantagesOf Grading And Levelling: 

Grading and levelling disturb the natural soil profile thus leading to extra work to create a uniform profile throughout the area for installing the structures.

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Also, these processes consume quality time and sometimes make the project unviable, which can be avoided by simply opting for the solution which can follow the contour.

Demystifying the truths There are many myths surrounding the approach of contour following structures.

Here are the two specific myths we would like to explore.Many believe that module installation should be on a straight line and should not follow contour which would otherwise lead to generation losses. The fact is that following contour will not have major generation losses. The losses are negligible compared to the cost of levelling and grading.

Also many trust that the pitch in east west direction should be more than normal to avoid shadowing. But this is not absoultely true in all cases. If the contour is followed in a systematic manner the Pitch need not change as all tables we be on the same plane and shadowing will not occur as the height difference between tables is null or marginal.

Project Size: 5.5 MW Project Location: Susner, MP

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EQ December 2013 21 www.EQMagLive.com

S O L A R M O UN T I N G ST RUCT URE

Contour Following Structures

I NT ERV I EW

Michael LIU

Sales Director Asia Pacific China Sunergy (Nanjing) Co Ltd

EQ : What’s the current production capacity of your company?

ML : CSUN now has three production bases-Nanjing, Shanghai and Istanbul, total capacity for modules is 1.2GW.

EQ : What is the unique advantage in being a vertically integrated manufacturer.

ML : For ideal cost and rigid quality control, meanwhile, we believe a stable and safe supply chain in solar industry is quite important.

EQ : How much has been the sale to India and what does the future look like?

ML : India is a very promising market with big potential in next 10years. CSUN is very serious to Indian market. Till Dec,2013, we have more than 100MW shipments to India market. With more focus on Indian market, we are quite confident that CSUN will have more achievement in Indian market in 2014.

EQ : What potential do you envision in India’s Market in near and Mid-Term Future?

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EQ December 2013

ML : India is thirty for power, plus its favorable natural condition. Solar PV has been most ideal solution to access to energy. There will be huge potential in India’s market in near and mid-term future.

Central government along with state levels

announced their ambitious installation plan.

Plus the released incentive policy, we strongly believe Indian Market will become one of the key markets in the world.

EQ : What changes have your experienced in selling PV in last 5 years ML : As solar sales, we have been much suffered by those ups and downs in past 5 years, frustrated then go on, painful but go on…. All is because we have a firmly faith that solar industry is good for human and solar would be chosen in future. With strong support from Chinese government and banks, CSUN is a reliable and sustainable company.

EQ : What’s the roadmap for production ramp up for your company and further growth in terms of technology, output of your products

ML : CSUN is specialized in high efficiency solar cells and modules since we have a very strong R&D team from University of NSW. We started our business from 2004.

Our CTO Dr. Zhao Jianhua kept the mono world efficiency record at 25% more than 20years.

EQ : The Volumes in India will ultimately come from Rooftop/ Off Grid or Large grid Connected Systems ML : Volumes in India will ultimately come from large grid connected system.

But we can see the increasing demand of roof-top system.

EQ : Start of 2013 we saw many states coming up forward with tenders close to GW of Projects…How much do you think is possible to achieve in 2014 ML : Based on our positive strategy and superior customers bases established in Indian Market, CSUN has already bagged various orders to be shipped in 2014. As for Indian Market, 100MW-120MW of shipment is our target in 2014.

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EQ : JNNSM new guidelines, VGF & DCR Rules…Whats you comments on the same.

ML : JNNSM new guidelines stipulating domestic content requirements indicates that India must be able to create its own modern manufacturing base that can compete internationally in the long run. It’s good for local players also poses challenge to players from other parts of the world.

In all likelihood this VGF rules could prove to be beneficial to the developers who would have to tackle the bidding process which is no longer a tariff driven but the capital subsidy driven. For tackling DCR is to give a separate allocation to the projects using local components.

EQ : REC Mechanism has disappointed Investors…What are your views on the future of the same.

ML : REC mechanism has failed to attract investment, though design of it appears adequate.

REC mechanism actually faces many barriers, for it is unlikely to encourage cost reduction and incentives, the non-compliance of RPO etc. The success of this mechanism will depend on removing these barriers in the future.

EQ : Open Access, Concessional Wheeling, Transmission, Cross Subsidy etc…is the key to achieve huge installations in India…What are your views on the Private PPA Market ML : Directly signing PPA between developers and the consumers is suggested to be next wave for solar PV in India because of its independent of unpredictable government policies and offers in approaching consumers. However, waiting phenomenon among consumers, no overarching policy aimed at facilitating private PPA market, flout contracts etc. hardly put private PPA market on a normal and safe track.

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Nitin Bhosale & Jayashri Phalke REFU Solar Electronics Pvt. Ltd.

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ooftop Solar is a persuasive business model for commercial and industrial building owners in generating clean solar power. This type of installation provides the building owner an opportunity to generate some revenue out of their existing infrastructure. The government offers a FIT(feed in tariff) program as an added advantage for the installation and this particular green incentive has attracted a dramatic growth in the investment capital.

REFUsol offers an exciting business proposition for commercial and industrial electricity consumers in the field of rooftop solar energy. We offer to reduce your electricity bill and generate additional income from your rooftop space – all at absolutely ZERO investment. We will help you invest in a solar PV plant on your rooftop and provide you with competitively priced, secure power from it.

Rooftop PV systems offer a great opportunity for institutions, industries, and all other buildings already using UPS, inverters, batteries and diesel generators to reduce energy costs and to ensure power continuity in the event of grid availability.For every commercial, Residential, Government & Industrial building REFUsol will provide the highest energy generating solution with string inverters.

As a building owner it is critical to understand the complexities of roof top solar development and the success of a project depends on the following vital factors: •

Project Fin ance Investment

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Revenue Generation of the installed capacity

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Structural considerations

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Dead-on Technology Selection

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Project Management

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EQ December 2013

and

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Array Designing

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Installation Expertise

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Operations and Maintenance

Solar projects are capital intensive and promising financing terms are a key constituent to a successful project. REFUsol with its products and its peripherals supports the client to achieve a highly efficient, lowcost system design which will consent the plant to generate a reliable power production over a 20 year term.

REFUsol has carved out its niche presence with an exceedingly reliable inverter and helps the client with the right technology, for the right roof, at the right price.

Every roof is different geographically, geometrically, orientation wise etc. and the ability to extract the maximum power production and revenue generation out of the area depends on the ability to position the technology best suited to the characteristics of the infrastructure.

Apart from hardware excellence, REFUsol supports the clientele with a software design tool. With REFUdesign one can accomplish the finest optimization of the PV modules and the inverters to get the concentrated returns generation. It covers the geographical and the geometrical parameters to achieve the best matrix.

Leading in Photovoltaic String Inverters, REFUsol provides a package inclusive of the

design suggestions which will include the DC & AC sizing along with communication which will lead the project developer in the right direction. The design will provide minimum losses and the complete energy parameters can be monitored on REFUlog- an online monitoring portal. Our inverters provide two modes of communication: Ethernet & RS 485 in the wired technology. We also support Wireless technology with our product REFUconnect. The client can chose the required mode, make the plant online and monitor the desired parameters on REFUlog.

REFUsol inverters conceptually are a plug and play system and do not require any installation expertise. It is a highly efficient and a very user friendly system.

Vouching for the German quality, we provide 5 years of warranty with the inverters and provide excellent Sales Support. With an existing Service Hotline the delivery of the solution to the client is provided 24 x 7 x 365.

Therefore, the building owners can create new revenue from their rooftop by generating clean power either for their own consumption or they can achieve a green incentive as per the Governments Feed-intariff scheme. High investment returns while mitigating the risks requires unique skills and resources and to provide the same REFUsol would be the right CALL.

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Capit al

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SO L A R I NV ERT ERS

SO L A R I NV ERT ERS

Commercial Roof Top Project With Refusol String Inverter

SO L A R ENERGY

Solar Tracking Increases Energy Yield: Position Sensors For The Photovoltaic And Solar Thermal Industry Chintan Doshi - FRABA Pte. Ltd.

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olar plants are becoming an integral part of our infrastructure – in the face of rising energy prices and diminishing resources of fossil fuels, they are a popular alternative. Parabolic trough solar farms, for instance, are being installed on uninhabited land in sunny regions – they transform solar energy into heat to power a turbine that generates energy. The efficiency factor of this kind of solar plant can be improved by solar tracking systems which orient the panels or collectors to the changing position of the Figure 1: Parabolic Trough Tracker sun. This function, which is available both for photovoltaics Rotary encoders and and solar thermal applications, requires tilt sensors for solar precise position data and a measuring tracking systems solution working reliably even under highly IXARC magnetic encoders from demanding outdoor conditions. The following POSITAL provide a cost-efficient solution for article presents sensors from POSITAL, a this application. Featuring robust and contactdeveloper and manufacturer of absolute free magnet technology, which provides rotary encoders and tilt sensors. a maximum resolution of 12 bits; these Solar tracking is performed in one or two axes. Single-axis systems require less mechanical effort and fewer sensors – for example, they can be equipped with a singleturn absolute rotary encoder or a tilt sensor with a measuring range of ±50° or more.

If a gear unit is used, a multi-turn encoder will be necessary. Two-axes tracking systems enable higher efficiency but are also more mechanically demanding. In addition to horizontal (azimuth) orientation, the panels are also oriented along the vertical axis.

This requires either two encoders (single or multi-turn, depending on the mechanical requirements) or one encoder and one tilt sensor with a measurement range of at least ±60°.

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encoders easily withstand the most rugged environmental conditions such as humidity, extreme temperatures, and vibrations. The devices can cover up to 20 bits for revolution measurement. They are optionally available with a radial or axial cable output and as hollow shaft or solid shaft versions. Heavy duty models reach protection ratings up to IP69K. The encoders operate without gear units or batteries and can therefore be manufactured very cost-efficiently. Since the Wiegand and Hall sensing technology requires only one permanent magnet, the components take up a minimum of space – this further reduces material costs.

IXARC optical encoders use a proven opto-electronic scanning method and are

especially suited for highprecision applications. The single-turn sensor provides a resolution of 16 bits per revolution. In addition, a maximum of 16,384 revolutions (14 bits) can be registered in multi-turn mode, thereby covering a 30 bit measuring range. The optical encoders do not require backup batteries or referencing – they instantly provide current, absolute position and revolution values even after power loss. All models are optionally available as stainless steel versions and with protection ratings up to IP68.

A n a l t e r n a t i ve t o rotary encoders, TILTIX inclinometers from POSITAL enable easy and low-cost mechanical integration combined with highprecision position data. Mounting fixtures and couplings are not required. They are particularly well-suited for tracking in the elevation axis. TILTIX inclinometers are available as two-axes versions with a ±80° measurement range and as a one-axis version for 360°. They provide a 0.01° resolution at a 0.1° measuring accuracy. The sensors feature capacitive cells based on MEMS technology (micro-electro-mechanical systems), and allow users to measure inclination values directly, without being mechanically coupled to drive elements. A high sampling rate of up to 100 measurements per second enables an efficient filtering of vibrations and shocks and minimizes the settling time.

The highly robust devices feature IP68 or IP69K protection ratings. They are available with SSI, CANopen, DeviceNet, or fieldbus interfaces, or with analog voltage or current signal outputs. “Industrial” and “Heavy Duty” models are available with plastic or aluminum enclosures.

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Martifer Solar O&M, Service For Customers Marco Alves - Head of the O&M Business division, Martifer Solar

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n the beginning, the O&M contracts, more than an opportunity, were a disruption to our EPC business focus something we were not very much interested on.

Nevertheless, with the growth of our portfolio of concluded EPC’s, nowadays close to half a Gigawatt installed in four continents, we realized there was a clear advantage in recognizing the problems and challenges recurrent in the Operation phase and anticipating it on preliminary project phase - this way, we would aim for excellence, ensuring the risk management for the EPC activity, improving the quality of our projects and guaranteeing long term relations with satisfied customers.

We realized that to become a bestin-classO&M partner, we would have to be able to anticipate problems with proven solutions, reason why we decided to domain completely the knowledge and competences for the whole value chain for this industry.

For the purpose, Martifer Solar made its very first step studying all other more mature businesses for service and energy, and finally mapped all the processes for a Solar O&M business 360º management that were later implemented in multi-technological supervision system, developed in-house jointly with an IT partner.

This tool, as conclusion of a two years process, has been awarded recently by its innovation and breakthrough achievements with the Top Five Excellence Award for Software in Europe.

The scope of our services of Martifer Solar O&M is very wide and implemented by its own employees for all technical and core activities and can be resumed as: 26

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•

Full Supervision and Web access to Integration Platform 

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•

With a state of the art integration platform of monitoring systems – that we share an access to our customers without additional cost or investment

Reporting 

Operation

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Being local we act local with our own field service engineers and technicians

Preventive Maintenance 

•

•

In a main Supervision Center, done by specialized engineers proficient in energy management, from sunto-sun;

 Detection and local reestablishment of each and every disruptive behavior on the PV plants we care for, with relevant impact over production, maintenance or safety conditions.

•

p e r fo r m e d b y e n g i n e e r s trained with its manufacturers, Martifer Solar can intervene on manufacturer’s behalf reducing plant overall downtime and cost of interventions;

As required in order to ensure and protect the warranties of each equipment installed, our preventive maintenance plans are adjusted whenever possible or required to maximize production or reduce costs with our customers previous agreement;

Corrective Maintenance 

As much as required, either for assembly repair, equipment replacement always done by general electromechanical technicians, we ensure plant availability and performance with our own internal staff;



Or even for equipment’s repair,

•

Of each and every activity done and for every KPI as requested by our customers – our reporting presents the summary of plant condition and every detail for each disruptive behavior of our customer’s plants;

Asset management complementary services 

All of our local offices staff at our customer’s disposal, for administrative, legal, accounting &fin ancial or engin eering activities.

MARTIFER SOLAR O&M – CRITICAL FACTORS FOR SUCCESS: PEOPLE PROCESSES AND SYSTEMS We perform O&M everywhere with our own local people with local offices so we drive the result of our operations towards our customers’ expectations.

Furthermore, even being a fully integrated player (Development, EPC and O&M) our main difference comes with the specialization and professionalization on O&M business as a core business. If the provider as elected it as a core business, has to have invested on people, processes and systems in order to make it professional.

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O&M People: Globally Localproficiency Only than it shall be really a professional O&M provider and its business will not be only EPC anymore. EPC and O&M are complementary services, but with much distinct businesses and scopes of activity, beyond the nature of activities performed –both have to rely on completely different people profiles, capabilities, processes and systems.

If its background comes also from solar EPC than its awareness and understanding of solar technology and main drivers shall be boosted.

If the background is just field service, they it shall take much longer to understand it and adapt to PV industry. Also the same shall occur in what concerns the relation with main stakeholders of the business – an O&M company with solar EPC background shall access much faster and easier to manufacturers, developers and all related technology providers than a company that does not have experience in EPC.

O&M Systems: Integrate To Control And Reduce Effect Of Technology Outdate An O&M provider should have in place systems that allow him to enhance the detection of unplanned behaviors in the managed PV plants – either they are reflective on the very short term, either on the mid-long term. Than a set of processes designed at its own image should make him able to trigger a re/action in order to attend needs locally on the plants, or remotely, towards production reestablishment.

O&M Processes: Specific, Lining People Over Systems A clear concepts and operational separation should make him able to distinguish corrective maintenance actions from production reestablishment initiatives – his most immediate objective – which sometimes does not happen due to a high concern on repairing. A third main contribution factor for success relies on experience, training and background of the people involved in the O&M operations. Consider that a huge difference will come with the quality of a pre-diagnosis

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done remotely, before sending technicians to plants and also on the capability to be effective on the very first local intervention and also on the re-occurrence of the similar failures, to be avoided – in solar, time is availability and availability is energy and money.

On the long run, an O&M provider should manage MTTR (Mean Time To Tepair), MTBF (Mean Time Between Failure) and performance and drive operational costs and yield.

Customer Focus: Opex reduction or Production assuring Before thinking on opex reduction or production upgrading, the main focus should be on the security of the investment on the long run – i.e., ensure that the warranties of each equipment are properly protected through the fulfillment of the recommendations of each manufacturer for the purpose. Otherwise, the whole investment might become compromised by a walk in the desert with technical problems and endemic defects not recognized by its responsible – the manufacturers.

Then, the focus shall be placed over two main drivers: operational costs reduction and production upgrading.

• Some activities like modules cleaning have impact on both dimensions: cost and production. It should be decided like a normal investment, based on a ration cost-benefit analysis. We have seen customers demanding cleaning more than required and others that don not even want to think about it. Cost for cleaning should be identified, as well as the benefit. A trigger should be set for the limit deviation between dirty and clean cells and the initiative should be considered when the case becomes real. Benefit can have immediate impact of 3% up to 30%.

• Operating costs can be also reduced by installing in the plant remotely actuated disconnecting devices for the medium-voltage equipments and that way reduce global energy consumption of the plant along the evening. It can save up to more than 1€ per kw*peak on a PV plant; • Quality of supervision systems and teams providing it also have a significant impact on the capability to identify disruptive behaviors and reestablish operating conditions, reducing consequent energy losses. If we cannot measure within reasonable

Power –time (energy) we cannot manage within expected behavior. Some benchmarking points it to improve performance over than 4%. Nevertheless, the reality is so dispersed that in some cases the impact can be much higher than that. And the final real impact of supervision can even be totally destroyed if not attached to an effective field service activity with the right people within a reasonable time-distance to PV plants.

Solar Asset Managers: Hard Workers Missing Looking For Reliable Partners And Solutions Asset managers have a very difficult task to achieve, which is to make sure that reality fits excel model. And it is even more difficult when they miss reliable and detailed data about future expectations concerning reliability of the equipment installed. Usually they also miss a clear insight of the potential additional costs they will face in the future due to defects, deficiencies or insufficiencies that could have been claimed still in the warranty period.

Also a major information they should be able to assess on the long run along with its O&M providers is “why didn’t we produce more?” instead of “did we produce as much as expected?”

The PV sector will face big changes in the coming years, and I see coming up soon the evolution of PV plants as we know it today towards multi-technological combined energy production systems. The real status of obsolescence level of installed systems, and the true needs for retrofitting, reconditioning and technological updating of PV plants will be a recurring fact in some markets.

Another important topic will be the public awareness of RAMS analysis (Reliability, Availability, Maintainability and Safety) for each brand and model of equipment that will differentiate the preference of some manufacturers regarding others.

Also, I believe that will be assist to the integration of players along the value chain of O&M aiming global efficiency and overall cost reduction.

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I NT ERV I EW

Hitesh Doshi -

Chairman & Managing Director WAAREE Group

EQ : What potential do you envision in Indiaâ&#x20AC;&#x2122;s Market in near and Mid-Term Future?

corporation; third party sale where the power

HD : I think in the near and mid-term future, the primary potential I can envision is the replacement of diesel and wherever there is need of power due to absence of any power facilities, they will opt to go for Solar power solutions. There are various tenders for the same which demonstrate a sizable demand.

are in place, we shall see a revolution in the

The actual potential will only be realized when aggressive policies will be in place and banks & financial institutions shall begin focusing on solar as an important vertical.

EQ : The Volumes in India will ultimately come from RoofTop/ Off Grid or Large grid Connected Systems?

HD : Yes, this is true because the most important aspect of solar power is that you can opt for small power projects to large MW scale sized projects, you can produce the same on your roof or where it is consumed, spending 40% energy for transmission and distribution and investing huge amounts of finances into transmission infrastructure is not viable.

To achieve the volumes in the roof top industry, we need to work on clear policies for injecting power, supplying excess power, various permissions from municipal 28

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producer is different than the actual user and clarity from MNRE. Once these parameters roof top market.

EQ : REC Mechanism has disappointed Investor. What are your views on the future of the same?

HD : On REC, recently MNRC and JERC have passed orders, if such orders are passed

EQ : Start of 2013 we saw many states coming up forward with tenders close to GW of Projects. How much do you think is possible to achieve in 2014 ?

HD : Iâ&#x20AC;&#x2122;m having an optimistic view of at-least 2000MW on ground. However, quick decision and clearances are going to be a challenge.

EQ : JNNSM new guidelines, VGF & DCR Rules. What are your comments on the same?

HD : I see a good momentum and we will see active interest in tenders, but clarity on anti-dumping duties and stabilization of $ to Rupee is required for cut throat competition and unfortunately they both are not available.

Apart from that prices for wafers are also increasing. There will be totally different bidding range for DCR projects and open projects, but anti-dumping duties need to be clarified before the closing of this bid, than only developers will have more clarity.

across the country; I am sure the REC market will move forward in the right direction To sum it up, we will need jaws with strong teeth. Some immediate actions are required to bring back the confidence of investors.

EQ : Open Access, Concessional Wheeling, Transmission, Cross Subsidy etc. is the key to achieve huge installations in India. What are your views on the Private PPA Market?

HD : As I mentioned earlier a complete clarity in various policies and the requirement for providing electricity across India shall propel with great speed. The private power purchase agreements will help the buyers to reduce this cost of energy and become more competitive in the local and international markets.

Similarly we will observe a rise in investors because of the demand in the market and clarification in the policies. Private PPA will also help to reduce diesel consumption and coal imports in the country.

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SO L A R ENERGY

Successful Commissioning Of Roof Top Solar Power Plants By Godrej & Boyce Mr. Pramod V. Hargude, AVP & Business head - PIRE, Godrej Electricals & Electronics , Godrej & Boyce Mfg. Co.Ltd

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odrej (Electricals & Electronics business, Power Infrastructure & Renewable Energy vertical) has announced the successful commissioning of its solar power plants in Chennai (250 kWp capacity) and in Mumbai (78.3 kWp).

These plants are part of JNNSM Off-Grid decentralized scheme under MNRE’s scheme.

These projects are unique in their usage of special innovative structure from Germany, inverter with 3 independent MPP tracker’s operational with sync of DG & grid power, thus reducing dependence/usage of DG & Grid power considerably. Each plant is expected to generate electricity of approx.

1500 kwh/ kWp per year with each unit of electricity generated from solar reducing 0.95 Kg of Co2 emission.

Key Features of solar installation 250 kWp in Chennai by Godrej:

Curved roof – Orientation given to PV Modules.

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Special solar structure from Schletter Mounting Systems, Germany.

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Each Invertor with 3 Independent MPP Trackors from KACO Germany – Ensuring Maximum generation from PV modules.

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Plant in sync with DG & Grid power.

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Considerable lowering the DG / Grid bills.

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100 % safety measures – Lightning Protections , Fuse over current

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protection etc.

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Plant expected to generate 3.7 Lac Kwh / year.

Installation on tall building approx. 130 ft.



Special elevated structure with maximum utilization of roof.

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Plant in sync with DG & Grid power.

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Considerable lowering the DG / Grid bills.



100 % safety measures – Lightning Protections , Fuse over current protection etc.



Plant expected to generate approx..

1.2 Lac Kwh / year.

Godrej & Boyce plans to play a larger role as an EPC contractor both in On-Grid and Off-Grid power generation. Being driven by the focus on sustainability, Godrej intends to enhance its presence in the sphere of Renewable Energy and will focus on various green initiatives aimed at reducing the carbon footprint.

Key features of Solar Installation 78.3 kWp in Mumbai by Godrej:

Roof Top system under Platinum LEED certification

In a very short span of time, Godrej & Boyce has been able to secure several EPC contracts in the Roof top segment across India. It will soon emerge as one of the top solar EPC players of India”, said Mr. Pramod V Hargude, AVP & Head - Power Infrastructure & Renewable Energy.

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S O L A R P V M A N UF A CT URI N G

Photovoltaic machinery industry expects revitalization of the market for 2014 Dr. Florian Wessendorf - Managing Director - VDMA Photovoltaic Equipment

T

he photovoltaic industry finds itself in perhaps the most challenging time of its young history. Falling prices and over-capacity on solar products, unsafe installation market developments as well as strong international competition require significant efforts of the photovoltaic industry. The situation for photovoltaic equipment suppliers herein is no exception.

Market prospects in the medium and long term still remain positive. Currently, every market participant has to optimize all their Key Performance Indicator (KPI) and resolve the tension between short-term market downturn and long-term perspectives. In addition to the continuous improvement of production processes and the targeted cost reduction, the strategic development of new markets have to be targeted. The key to a long-term competitiveness lies also in closer cooperation along the value chain, starting with production-related research - combining the expertise of the supplier industry and the photovoltaic manufacturers. Creating successful synergies is a feasible target that has been proven impressively in the last decade. The success story of photovoltaics would not be possible without the unique combination of domestic markets, local production, excellent research communities and the broad know-how of the supplier industry. Photovoltaic equipment makers sustainably contribute to the massive downsizing of photovoltaic production costs.

They focus on high performance, uptime and yield and are forerunners in process innovation. Low total life cycle costs of machines and equipments guarantee an energy- and resource-efficient production, so that additionally to investments decisions 30

EQ December 2013

the “eco-image” of photovoltaic products can be satisfied. German machine makers are pioneers in this area and have even shaped eco-standards in Germany and the European Union.

Turning point of Chinese solar industry and emerging markets offer potential for growth The order situation of the manufacturers of components, machines and plants for photovoltaics in Germany develops positively towards the end of the third quarter of 2013.

For the current business climate survey of the German Engineering Federation (VDMA) 43 percent of the companies report an improvement of the order situation compared to the same period last year. For about 48 percent the volume of incoming orders has remained unchanged. However, for the current year the participating industry representatives expect a further decline in turnover. At the moment the photovoltaic equipment industry experiences a slight revitalization of the economic situation, but it comes too late in order to become visible in year’s turnover. Over capacities, pricing pressure and consolidation continue to dominate the solar industry sector. This is why industry experts expect an average decline in turnover of twelve percent for the PV equipment sector in 2013. The turnaround is expected for 2014.

The market begins to show positive signals again. It looks like at least the Chinese solar industry has reached its turning point.

Moreover, leading solar producers show an increasing interest in production in emerging markets like the MENA-region, South Africa, Turkey and Latin America. Therefore,

photovoltaic equipment insiders assume that next year already the investment in equipment and technology will rise again. Accordingly the participating industry representatives expect an increase in turnover of eleven percent for next year.

Capacity utilization remains low Capacity utilization in the German photovoltaics machinery sector remains at a low level. 89 percent of the companies report a utilization below average. The positive signals of the cell and module manufacturers currently cannot be found in orders on hand either. According to the companies the order backlog reaches a volume of only 3 months compared to a backlog of 5.6 for the entire machinery industry for the same period of time. In order to support revenues the PV machine makers intensify their focus on increasing efficiency in production, logistics and personnel as well as on the reduction of purchasing costs (raw material, energy etc.). Long-term investment to increase competitiveness is made in research and development and in raising efficiency.

Although there are still a lot of challenges to cope with for the industry, the industry remains positive. All indicators show that the German photovoltaics machinery industry will keep its key-position as a motor for innovations and a provider of solutions for photovoltaics production.

Photovoltaic Equipment – the Key to Costreduction and Highest Quality

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The quality of photovoltaic modules, especially the efficiency of light to current conversion shows a clear positive trend: over the last years the efficiency of all photovoltaic products has been enhanced significantly.

At the same time the prices of photovoltaic modules have dropped dramatically. However, end users demand products with a warranty of 25 years minimum and a return of invest after ten years. They evaluate hard facts like price, quality and reliability. Maybe sometimes design plays a role. Technological issues are usually placed in the background.

Thus, the effective transfer of technological developments into production excellence – innovation in production – is of greatest importance. Equipment makers have the experience from related industry sectors like electronics, flat panel displays and automotive, to name only a few. Their broad background is the key to speed up the learning curves in photovoltaics considerably.

The main challenge for the solar industry in the next years is a serious reduction of the production costs. On the road to power generation parity cost effectiveness and high performance technologies play the key role.

Decisive for cost effective and high quality production is to engineer the most efficient technology.

Although great advances in mass production has been maintained, the photovoltaics industry today is still in a state in which the electronics industry was at the end of the 1970ies (with clear similiarities to crystalline photovoltaics) and the flat panel display sector at the end of the 1980ies (with similarities to thin film technologies). Remember: at the end of the 1970ies a megabyte storage still cost US$ 1.000. The storage of 16 to 64 Kilobyte and 5 megahertz clock rate were standards.

The flat panel display was in a similar situation at the end of the 1980ies: liquid crystal displays for laptops were offered in black and white with a diagonal of 26 cm, manufactured on 370x470mm2 glass substrates. While the Toshiba T1100 cost US$ 4.000 in 1985, notebooks for less than US$ 500 are available today. LCD TV-screens with brilliant colour displays with more than 2,70 m screen diagonal are feasible now. In production glass substrates have reached 2,85x3 m2 (“generation 10”). This in mind you can imagine how great the potential of cost reduction by mass production in the photovoltaic industry is. The pv production learning curve clearly shows: doubling of the

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production leads to a cost reduction of about 20 percent. Sustainable cost reduction needs process innovations all along the process chain: From poly silicon production and ingot growing through wafer sawing, texturing, anti reflective coating, metallization, laser application, tabbing and stringing, soldering and lamination to automation, handling, optical inspection, and software. Herein the photovoltaic equipment makers achieve pivotal solutions.

Moreover the photovoltaic industry has defined objectives for a “greener” production: Recycling makes “green” solar power “double green”. “Triple green” is achieved when even the production of solar technology satisfies ecological criteria. Low total life cycle costs of machines and equipments guarantee an energy- and resource-efficient production, so that additionally to investments decisions the “eco-image” of photovoltaic products can be satisfied. German machine makers are forerunners and have even shaped ecostandards in Germany and the European Union.

German Photovoltaic Equipment – Partner of the World Modern life is not thinkable without intelligent machine applications that make most things of our lifestyle affordable.

With about 978,000 employees (2012) in approximately 6.300 companies the machinery and plant industry is the biggest employer and one of the leading industry sectors in Germany, with an average of mostly medium sized companies. The production volume reaches € 207bn in 2012. Capacity utilization currently amounts to more than 88 percent. In 2012 the industry invested € 5.1bn in research and development. These figures represent a cross-section of all divisions of the German machinery sector

and underline the importance of the industry.

It is the intelligent use of machines that makes production cost-efficient. Therefore it comes as no surprise that the export ratio of the entire industry amounts to 76percent.

Germany ranges no. 1 on the scale of machine supplying countries, followed by the US and Japan.The manufacturers of components, machines and equipment for photovoltaics in Germany follow this tradition. They reached a world market share of 55 percent in average with a turnover of € 1.4 bn in 2012.The export ratio was at a high level - exceeding 80 percent - as usual. Business with Asia has the greatest share of the entire turnover with more than 70 percent. This shows impressively size, success and importance of the photovoltaic supplier industry.

The photovoltaic machinery industry will continue to pave the road to cost effectiveness and high performance technologies. Mass production in this renewable energy sector will help to ensure cheaper, greener and more reliable photovoltaic products that are competitive to conventional energy sources. German photovoltaic equipment makers exhibit a clear advance in comparison to their competitors: They focus on high performance, uptime and yield and are forerunners in process innovation, energyand resource-efficiency. The high export ratio of 90% makes clear that they are a true “partner of the world”. The German Engineering Federation (VDMA) has started working for this sector already in 1995 and has set up an association platform for photovoltaic equipment in 2007. Since 2010 VDMA Photovoltaic Equipmentis a separate association platform within VDMA. With more than 100 members in this area VDMA represents the entire value chain of the photovoltaic equipment industry in Germany.

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CO N V EN T I O N A L P O WER

Recharging the Indian Power Sector

How To Turn Around The India’s Power Sector By 2018 KPMG

A look back at the last decade As we look into the last decade (20032013), it appears that history is repeating itself in the power sector. The financial stress in the sector is very high, this time it affects both the public sector discoms and the private sector gencos. There are stranded power assets and at the same time in many regions consumers are facing power shortages. There is no doubt that positive developments did occur in the last decade– for example, network losses did reduce (from 35 percent in FY02 to 27 percent in FY12)1, private investment in generation did come in substantially (more than INR 300,000 Crores inthe last 10 years)2 , the XIth Plan saw the maximum installed generation capacity addition (54 GW)1 and almost all states have gone for tariff revision in recent years to reduce the gap between cost of supply and retail tariffs (23 states and 5 union territories have gone for tariff revision in FY13 and 8 states have increased their tariffs as of August this year).

Yet, the following statistics show the crisis the sector faces today – •

Distribution sector financial losses stand at INR 67,000 Crores 3 (FY12)

•

Bank exposure to the discoms in the form of short term loans (which largely represents deficit financing) stands at INR 1.9 lakh Crores 4

•

The debt-equity ratio of private gencos has risen to 2.64 in FY13 from 0.91 in FY09 5

•

Commissioned but stranded power capacity stands at more than 33 GW 6 (due to lack of coal & gas) which will result in non-performing assets with investments of over INR 1 lakh Crores

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•

Cost of power deficit 7 in the form of additional cost of diesel backup generation is INR 43,800 crores annually.

Something has gone wrong. The key questions before us today are: •

What are the immediate short term measures to revive the sector and get the investment cycle going?

•

What are the long term measures to ensure sustainability in the sector so that we don’t see history repeating itself in this manner again?

Understanding the last decade A Push-Pull Analysis In any industry, two types of forces are at work - a pull force which is a demand pull for goods and services from consumers, which in turn leads market forces to create capacity across the value chain and provide services efficiently. The second force is a push force, more often seen in regulated or controlled industries, where policy makers and central authorities decide the capacity creation needs and determine resource allocation. Examples of push controlled industries are nuclear power, defence and aerospace.

The power sector makes for an interesting combination of the two forces. Until the

enactment of the Electricity Act 2003, it was highly push oriented. The Electricity Act, among other things, intended to bring in market forces to decide investment decisions.

An example was introduction of open access where consumers could choose suppliers directly. This was the first step in the creation of a pull force in the industry. Consumer choice, merchant power generation, private licensees in transmission and provision for multiple distribution licenses in an area are some examples where the pull force was sought to be created.

The pull forces didn’t work as expected and consumers are still suffering with poor quality of power and inadequate power; though many of them are willing to pay for good quality power! A classic case of market forces not being able to play their part. On the other hand, investors are struggling with stranded assets – out of a total of 179 new announced projects with an aggregate capacity of 236 GW at the end of FY12, only 79 GW8 have got commissioned or are in advanced stages of construction. Many of these projects are stuck in various stages of development waiting for approvals and clearances.

The cost of coping with deficits and poor quality of power is high - as evidenced by the extent of back up diesel power generation of more than 30 GW. Why didn’t the pull

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forces work? One key reason is the failure of retail open access to take off. The volume transacted is only 1-2 percent 10 of the total generation. Due to power deficit, some states like Maharashtra, AP and Tamil Nadu eliminated cross subsidy surcharge (CSS) and encouraged open access. But this appears to be a short term measure to tide over immediate deficits. What is needed is longer term stability of cross-subsidy surcharge policy so that investors can take investment decisions.

Distribution utilities put barriers for fear of loss of cross-subsidy. Regulators were supposed to decide how to balance the interests of consumers, private generators and discoms, but most often tilted the balance in favour of discoms. This points to issues of regulatory independence and in many cases lack of ability to discern between reality and exaggerations. The result was a loselose situation - discoms had high deficits, yet consumers were not able to easily choose alternate suppliers.

Some of the interventions were indeed noteworthy with a strong positive intent.

For example, introduction of competitive bidding for power procurement and the Ultra Mega Power Project (UMPP) initiative are good examples. Yet, both these initiatives had mixed success at best – not all the instances were successful, those that were successful consumed a very long time and many of these will require restructuring or contract renegotiation to make them viable.

The following paragraphs give some reasons for the situation we see today.

The failure of intermediation Discoms were intermediaries between generators and consumers. They stymied open access and took upon themselves the task of procuring power for their consumers Power came from 2 sources - the state & central gencos, and through competitive bidding (case 1 & 2). Both these forms of procurement had unsatisfactory outcomes the main problem being the significant delays in completing the procurement process itself.

Around 83 percent of long term Case-1 bids have been delayed during the period FY07 to FY12 11. While the stipulated time for signing of PPA from the date of issue of RfP is 120 days, the actual average time taken is around 440 days 12 . The delay is

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primarily due to lack of process discipline by the utilities and indecisiveness regarding viability of the quoted tariff. A combination of poor planning and poor procurement processes led to delays and deficits. It is now also acknowledged that the model contracts had weaknesses related to fuel supply risk allocation. But the issue of lack of exercise of flexibility in the procurement process is also to be blamed. The framework provided for regulatory intervention to adapt the bid documents, but either these were not called upon or there was insufficient exercise of the same.

Poor Record of State Gencos While at one end state discoms could not efficiently procure power, at the other end state Gencos also struggled in their role to add capacities due to poor planning and weak financials. There were regular slippages in the capacity additions from state sector and even the operating plants had low utilizations (average net PLF of less than 65 percent in the last five years). As a result some states have very high energy deficits. The situation would have been much worse if it was not for the private sector, which added significant capacities in recent years and created viable alternative to state Gencos. Going forward, governments will need to relook at the role of state Gencos and strengthen them in terms of financials and operations if they have to compete with the private sector.

Lack of Fuel to Power the Nation This is only part of the story. The other big failure was the failure of a push factor fuel availability! The fuel sector has been a controlled market. Allocations are done by the Government and bulk of the coal supply was still through Coal India (CIL). CIL provided letters of assurance to different producers - far exceeding its capability to produce. Ostensibly one reason for this was the past experience related to actual achievement of generation capacity against planned and the view that not all the Letter of Assurance (LOAs) would get called for supply. This is now manifesting in stranded capacities. The other reasons were internal structural difficulties to ramp up production.

The record on private coal mines reaching production has also been very poor. The

Policy and legislative framework impacting coal mining is still evolving. For example, the Mines and Minerals (Development and Regulation) bill is still in the works and the debate around go/no-go areas is still not completely resolved. Even the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, its associated rules and amendments came quite late. Developers were allocated blocks which were not adequately explored and with the uncertainties in policy and legislation 13 , mine development and production continues to stutter. The other reason for delay in bringing to production the coal mines is the continuing lack of competence and bandwidth in the sector. Some of the critical gaps are the following: •

Shortfall in planning capacity with poor capacity in private sector

•

Shortfall in exploration & production capacity - Imminent shortfall in skilled workers for statutory positions like surveyor, mining sardar, overman etc.

•

Reduced pool of experienced mining engineers and geologists due to recruitment freeze in mining companies and scaling down of batch sizes in mining institutes in late 1990s and early 2000s

The gas story has also been bleak and unfortunately has led to significant stranded generation capacities (more than 15,000 MW 14). A poor policy framework on gas allocations is to blame - priority was given to capacities which were ready and this led to capacity creation before gas allocation!

The framework around dispute resolution in new exploration licensing policy (NELP) contracts also appears to be weak since it has taken a lot of time to resolve the issues related to cost recovery.

The only silver lining has been the rise of renewables. Wind was driven by a feedin-tariff (FIT) regime and did not therefore need a procurement process thus saving itself from its perils, though solar power is procured through a tendering system and is currently suffering delays due to the slow process in various states and also at the Centre. The boost to renewables came from the emerging grid parity (as shown in the chart below) with conventional power 15 and the short gestation periods to set up these capacities led many states to embrace them to meet their power shortages. The generation based incentives to wind power

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also provided impetus to new development by augmenting developers’ returns thus helping move the wind sector from a tax incentive driven sector to a core generating sector.

What have we learnt

& what is the way forward?

Addressing the immediate crisis to get a positive investment cycle

More than 30 GW of 79 GW of private thermal and hydro generation capacity planned by FY17 is waiting to get tied up under long term power purchase agreement (PPA). Many of these will again turn into non-performing assets (NPAs) if they do not enter into bankable PPAs by the commissioning date. The Government can consider setting up a centralized procurement agency on behalf of the state utilities which could procure on behalf of the state utilities based on common bidding guidelines. The contracts could be made back-to-back with state utilities to address issues related to payments and creditworthiness. A well designed centralized process will help in reducing delays in procurement and also enable generators to contract untied capacity in a planned manner.

3.

The following measures should be taken up immediately within the next one year:

Implement the loan restructuring package of the discoms in a time bound manner:

Quick implementation of the Government decision to allow coal pass-through for stranded projects:

The following seven states are the major states which contribute to more than 60 percent of short term loans16.

Currently, capacity of ~33GW in an advanced stage of readiness is either tiedup or under negotiations for supply based on competitive bidding. Many of these projects will turn into NPAs for banks because of nonavailability of fuel. For projects which have entered into Power Purchase Agreement (PPAs) under existing competitive bidding guidelines, the Government should allow import of coal for the quantity equivalent to shortfall in domestic coal supply as per the signed Fuel Supply Agreements (FSA). The Cabinet decision in respect of select projects is welcome. What is now needed is a quick implementation of the same. The Central Government should formulate a guideline on how this can be implemented quickly.

This can be through a simple formula that identifies a set of coal indices and normative transportation cost (say, INR /ton-km) which can be applied easily by the regulator. Coal India Limited (CIL) can issue a certificate for the shortfall quantity and the cost of imported coal procured against this approved quantum can be made a pass through by the regulator based on the guideline. A speedy implementation of this decision will go a long way in reviving sentiment and the investment cycle.

Out of these, only Rajasthan and Tamil

1.

2.

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Procurement through a well designed centralized competitive process at regular intervals:

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Nadu have so far issued bonds that are backed by state government guarantee as per the formula suggested by the cabinet committee after the Central Government approved the financial reform package in September 2012.

Uttar Pradesh, Haryana and Andhra Pradesh are expected to issue bonds soon. Punjab and Madhya Pradesh have opted out of the scheme. Central and state governments have to agree on a time bound plan and implement the financial reform package.

4.

Address financing issues by enabling strategic and financial investors to come in and by easing the lending logjam:

In the last two years, we have seen international strategic investors (power utility companies) showing an interest in the Indian power sector. Their entry is much needed, not least because of operational capabilities,

but also to bring in the much needed equity financing into the sector. One of the bigger concerns today is a lack of new pipeline of projects since most of the existing set of players are stressed (aggregate debt-equity of 2.64 and cash losses of INR 124 Crores 17) and would not be in a position to bring much equity. The capacity addition target for 13th plan is 100 GW 18 and private sector is expected to contribute at least 64 GW 19 . This will require equity capital of~ INR 1,27,050 Crores.

To enable strategic and other large financial investors like pension funds, to view the sector favourably, the Government should quickly resolve various uncertainties such as position on coal block allocation, implementation of imported coal passthrough, policy on M&A related to allocated mines and have a war-room approach to resolving issues related to some stuck up projects. A longer term clarity on some of the above issues will also bring in more confidence for investors looking to acquire operational projects and running them for cash flow yields. Further, the domestic lending community is precariously poised towards the sector due to potential NPAs on account of various projects that have got delayed or have been unable to achieve COD due to fuel or PPA related issues. What is needed is a special dispensation liberating provisioning norms for such loans to avoid them getting classified as NPAs. This could be done only for those projects which are facing loan restructuring on account of uncontrollable factors such as coal supply related issues and issues related to environment or forest clearances. This will help unlock the financing logjam and enable a positive investment cycle to commence. Further, the Government should enable takeout financing for banks by strengthening institutions such as IIFCL to undertake the same. This will help partially address the sectoral exposure caps that banks would otherwise be constrained by.

5.

Implementation of operations excellence initiatives in mining companies focused on throughput improvements:

The public sector coal companies need to immediately undertake large scale operations excellence initiatives. Some examples of such initiatives are “Vale Production System (VPS)” of Vale, “Improving Performance Together” program of Rio-Tinto, “One Anglo” program of Anglo American etc.

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Some ideas with regard to how these themes can be adopted in the context of India are enumerated below: •

•

•

Development of pit-head infrastructure: For specific mines identified by Central Mine Planning and Design Institute (CMPDI), immediate action needs to be taken to bridge the gap between production capacity and first mile transportation capacity to nearest siding by ramp up of coal handling plant/automatic wagon loading system infrastructure and improvement of road conditions.

Improvement in mining process and technology: There is a strong case for initiating a Continuous Improvement Program (CIP) aimed at addressing issues such as equipment break-downs, computerized operational planning etc. all of which have an impact on mine through-put Quick adoption of technology to develop underground mines:

Tenders need to be quickly finalized for the underground (UG) mines for which technology identification is already done by CIL and contract terms need to be equitable in line with the model contract agreement for mine development operator (MDO) contract being framed by the Planning Commission

Long-term measures to ensure sustainability The following measures need to be undertaken in the next 1 to 3 years to ensure long term sustainability: Disintermediate the discoms to activate the pull forces of demand: Introduce the concept of retail supplier who will contract between the consumers and the generators.

He will respond to market forces created by deficits and high coping costs. He will contract with generators flexibly and not be bound by standard bidding documents, coal indexation constraints etc. In short, we can overcome the constraints of centralized regulated procurement. This can be done through a legislative change to introduce a new license category - the retail supply license. Further, provisions related to crosssubsidy surcharges and other measures acting as barriers need to be defined in a more definitive manner so that it is binding on

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regulators and does not become a hindrance to open access as seen today.

While the Cross subsidy surcharge computed under the National Tariff Policy (NTP) is a step in the right direction, it is being distorted due to non-uniform methodologies adopted by State Electricity Regulatory Commission (SERC’s) and considering bilateral / short term (ST) sources in marginal power purchase cost.

Short term sources would tend to have volatile prices thus preventing a stable crosssubsidy surcharge regime. Therefore, we suggest that cross subsidy surcharge should be computed excluding ST sources to reflect true cross subsidy available in the system over long term.

The table below shows cross subsidy surcharge (without ST purchases) in key states.

Cross-subsidy surcharge for Industrial Consumers at 132kV

load restriction through commercial tariff signals for exceeding a given quota of power rather than load restriction through physical disconnection of feeders.

Expedite the coal allocation process through competitive bidding to support the push factor: The Ministry of Coal should create a roadmap for regularizing the noncontroversial coal blocks that are faced with the risk of summary de-allocation on the back of the Public Interest Litigation (PIL) filed in the Supreme Court. The Government can determine the reserve price for these blocks based on the methodology adopted for upcoming allocations as well as apply normative project financial benchmarks based on approved mine plans and accordingly charge a suitable allocation fee from the allottees. The schedule of payment should be designed in a way that it does not adversely impact the output power prices.

Invite international players who can bring modern technology especially into underground coal mining and increase coal production:

As can be seen from the below graph, total landed cost for replacement of base load requirement of a typical industrial consumer from private sources can be competitive after considering power generation cost, a fair level of cross subsidy surcharge (CSS), transmission charges and losses. Currently, the play available is in the range of INR 1.5 to 2.85 / kWh, suggesting that a winwin situation can be created. To encourage competition under such circumstances, we recommend the following: •

A stable cross-subsidy surcharge regime that gives predictability for investors.

This should be combined with an equitable balancing and settlement system for handling deviations and providing grid support.

•

Well designed guidelines for switching over of consumers from incumbent licensee to new retail supply licensee.

•

A scheme which enables consumers to continue availing supply from alternate sources during periods of deficit. Such schemes have been adopted in states like Tamil Nadu and Andhra Pradesh during 2012-13 and work by providing

India needs modern technologies for depillaring and technologies to access the coal in deep seams through open cast (OC) and underground (UG) methods. With increasing challenge of environmental clearance and land acquisition, it is necessary to apply these methods to fully exploit the potential of mines already in possession of the coal mining companies.

Over the years, the contribution of underground mining has infact reduced.

Given that the limited shallow depth reserves amenable to opencast mining are likely to be exhausted in foreseeable future (may be after 25-30 years) and the production from opencast coal mines in CIL may reach a plateau, it becomes essential to start developing underground mines in earnest. Further, large scale ramp up of underground projects takes time and hence the need to start early and introduce bulk production technologies. It is in this area

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measured with designated Key Performance Indicators (KPI) either by the Central Govt. or Appellate Tribunal for Electricity (ATE). The KPIs should include performance related to issue of orders within stipulated timelines and adherence to provisions of Electricity Act (for example, enforcement of Renewable Purchase Obligations). Based on the report of the performance reviewer, state government or the regulator, as the case may be, has to take appropriate action to correct the short comings.

that we need to invite international players in earnest.

Following are some actions that will enable participation from international companies: •

•

Design the right Public Private Partnership (PPP) framework for MDO participation treating technologically complex projects differently from socioenvironmentally complex projects. As we have seen in many sectors in the past, a proper risk sharing framework and transparent processes are necessary to attract internationally competent bidders.

Provide the right pricing framework for Underground Mining: The Government should provide pricing signals for increasing underground coal mine production which may be at a higher cost and not profitable at current prices.

Options include allowing a certain level of merchant sale through e-auction route and providing import-parity price for underground mines. Given the demand for imported coal, higher prices can be absorbed by power generation companies.

Strengthen regulatory institutions: This is perhaps the single most important institutional change that is needed.

The power regulators are supposed to be independent and autonomous. Yet, in many states, that does not appear to be the case. The key issues relate to a) process of appointments b) competence of regulatory staff and regulators, c) lack of an accountability framework and d) indirect interference from the state government.

Today non-performance of regulators has no punitive implications.

Following are some of the measures that GOI must consider to strengthen regulatory institutions •

At least one of the members of the Commission to be from private sector to reduce government interference

•

Default annual tariff increase linked to certain index (it may be a combination of Wholesale Price Index (WPI), fuel index etc.) should be mandated and correction, if any, should be carried out by the respective regulators to adjust revenue surplus/ deficit. This will safeguard the financial interest of the utilities in case of undue political interference.

• 36

Performance of SERC should be

EQ December 2013

•

Permanent staff should be appointed to strengthen the commission. Staff on deputation should be restricted to 25 percent of the total staff.

Carry out a process re-engineering of the environment and forest permitting processes: Power capacity of more than 103 GW and coal mines of more than 726 MTPA capacity are pending for environmental and forest clearances. There was loss in production of domestic coal from private sector to the extent of 394 MT 21 of coal in the last 5 years because of delay in development of captive coal blocks allocated for power.

This has lead to higher imports and stranded capacities with an impact of more than INR 1,46,157 Crores 22. While these processes are much needed and value-adding, the outcomes can be achieved with much lesser time and cost. Some of the measures in this regard include the following: •

Bring in accountability for timely decisions on clearances by identifying single point responsibility for different projects. “Project officers” for all projects above a certain threshold size should be identified. They would be accountable for timely processing of applications after co-ordinating with various entities.

•

Identify a charter which defines timelines for various activities in the permitting process. This should be monitored at the highest level. As we have shown the loss on account delays can be astronomically high.

•

Develop a parallel processing system where information is processed in parallel by various entities. Use of information technology to enable speedy processing should be done and further bottlenecks either due to certain skills, manpower or information flows should be resolved.

Separate the problem of subsidized sectors such as agriculture supply from the problems of the discoms:

While there are provisions in the Act to provide discoms with the required subsidy, there are many problems related to measurement and actual delivery of the subsidy. A system of direct cash transfers, now seen in other areas, needs to be urgently considered here. Alternatively, the stakeholder for this category should be the Department of Agriculture or Irrigation and not the discoms. The agriculture department could consider disbursement to each division based on agricultural consumption at Distribution Transformer (DTR) level. This approach will help rejuvenate the finances of the discoms and help them to be more commercially sound.

Railways & CMPDI should make an evacuation master plan: Railways and CMPDI should work on coal field master plan on the lines of Chhattisgarh model by working closely with state governments. There is a need to expedite large scale construction to enhance rail capacity for key coal fields, including last mile connectivity to sidings attached to the mines.

A recommended roadmap for a vibrant power sector by 2018 The following is a recommended near term roadmap to recharge the sector: 1.

Introduce retail supplier license in the Electricity Act by 2014. This can free up stranded operational capacity of 19 GW 23 which have no bankable PPAs and the incremental supply can partly bridge the peak power deficits of around 12 GW 24 . This will also ensure that the upcoming capacity is contracted through open access (pull forces) and is not stranded waiting for utilities to procure power.

2.

Immediate implementation of fuel cost pass-through can improve the PLF of coal based power plants to 85 percent, resulting in efficient utilization and financial turnaround of upcoming coal based capacity of 62 GW 25 in XII plan period and commissioned capacity of 40 GW in XI plan. A special dispensation should be made to prevent provisioning of bank loans in respect of such projects so that the financing logjam can be eased and a positive investment cycle returns.

3.

Allocate new coal blocks to private sector and utilities under the proposed competitive bidding process by FY14.

Coal blocks with reserves of ~8 BT

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are identified for power sector which can produce ~195 MTPA at peak production. At least 25 percent of this, i.e. ~50 MTPA should be made possible

by FY20.

4.

Resolve the litigations around existing coal allocations immediately and carry out process reengineering for environmental and forest clearances (EC & FC) in next 12 months. If clearances can be granted for pending projects of 726 MTPA 26 of coal mines in next 2 years and if at least two-thirds 27 of these blocks are developed by the end of FY17, production in FY18 can be ~240 MTPA going up to peak production of 480 MTPA by FY20.

5. Develop a framework for capacity enhancement in mining by CIL in next 1-3 years. This should help CIL ramp up the production and meet the optimistic scenario target of 615 MTPA 28 at the end XII plan against business as usual scenario of 556 MTPA. Also with FDI in mining and adoption of modern technology, CIL should be able to ramp up the underground mine production from the estimated 54 MT to 64 MT 29

by FY18.

To unshackle coal supply, whether from CIL/ SCCL (Singareni Collieries Company Ltd.) or captive blocks, there is a need to step back and relook fundamentally at our legislations like the Coal Mines ationalization Act, Contract Labour Regulations and Abolition Act etc. Otherwise initiatives like revenue-sharing model for difficultgeology mines and large scale private sector participation in capacity enhancement of the sector will not take off as expected.

If we can achieve the above, we will have incremental coal production of 394 MT in XII plan from CIL mines, captive coal mines, Singareni coal mines and increased underground mine production 30. This can support ~80 GW of coal based capacity additions. Considering capacity additions from other sources as per Planning Commission’s target 31, we will have an aggregate energy supply of 1638 BU 32 .

This will be sufficient to meet 100 percent of energy demand projection of 1462 BU in FY18 as per Electric Power Survey 33. urther, these measures will revive the investment cycle, bring in new investors including strategic players and help bring the much needed equity for new projects.

Timebound implementation of Financial

Restructuring Plan (FRP) for discoms will also help improve viability of the distribution sector.

It is important that all stakeholders participate in this resurrection of the power sector. This includes the Central Government and its various ministries such as those of coal, power, environment, railways; the State Governments, the lending community through a change in mindset towards lending, the power utilities (discoms) through efficiency in procurement and allowing a level-playing field for competition through open access, the Electricity Regulators through efficiency and adherence to the spirit of the Electricity Act and importantly the private sector through being reasonable in their expectations and having to make suitable sacrifices to come out of the current situation. In the ultimate analysis it is the power consumer, whether it is the urban or rural, industrial or agricultural, who bears the brunt of the situation. We owe the consumer a much better power situation - a vibrant, competitive and reliable power sector, one that allows industry to compete in the rest of the world and gives all other consumers a quality of life they deserve. For this, we need to recharge the power sector and do so urgently.

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P O L I CY & REGUL A T I O N

Tamil Nadu Electricity Regulatory Commission Order on LT Connectivity and Net-metering, in regard to Tamil Nadu Solar Energy Policy 2012

Order On LT Connectivity And Net-Metering, In Regard To Tamil Nadu Solar Energy Policy 2012

I

n G.O (Ms) No. 121/Energy (C2)/ dated 19-10-2012 Government of Tamil Nadu have approved the Tamil Nadu Solar Energy Policy, 2012 which envisages generation of 3000 MW of Solar Energy by 2015, reduction of carbon emissions and projection of State of Tamil Nadu as a solar hub among other objectives. In letter No. 12009/C2/2012-1/ dated 06-11-2012, the Government have issued a policy directive under section 108 of the Electricity Act, 2003 (Central Act 36 of 2003) to this Commission for necessary action on the said policy.

The Commission issued a suo-motu order titled “Issues relating to Tamil Nadu Energy Policy 2012” on 07-03-2013.

In the said Order it was specified that separate order on net-metering, LT connectivity etc., would be issued separately after obtaining the procedure from TANGEDCO and after obtaining comments/ suggestions from the stake-holders.

TANGEDCO has submitted the same on 18/5/2013. The procedure was hosted in the Commission’s website on 24/7/2013 seeking comments from the stakeholders to be furnished on or before 15/8/2013. Taking into account the procedure submitted by TANGEDCO, the comments received from the stakeholders and the model regulation issued by the Forum of Regulators, the Commission issued a draft order on Netmetering, LT Connectivity and Renewable Energy Certificate(REC) inviting comments/ suggestions received from stakeholders to be furnished before 30/9/2013.

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Taking into account the comments/ suggestions received from the stakeholders, the provisions of Tamil Nadu Solar Energy Policy 2012 and in exercise of the powers conferred by clause (e) of subsection (1) of section 86 of the Electricity Act, 2003(Central Act 36 of 2003), the Commission issues the following order on LT connectivity and Net-metering in regard to Tamil Nadu Solar Energy Policy 2012.

This order shall come into force from the date of its issuance. Both the existing and new Solar ooftop/Solar systems which comply with this order are eligible for Netmetering.

Introduction In the Commission’s Order on the issues related to Tamil Nadu Solar Energy Policy 2012, dated 07/03/2013 the Commission had directed Tamil Nadu Electricity Generation and Distribution Corporation (TANGEDCO) to submit a detailed procedure on Net-metering, LT Connectivity etc., to the Commission.

TANGEDCO has submitted the same on 18/5/2013. The procedure was hosted in the Commission’s website on 24/7/2013 seeking comments from the stakeholders to be furnished on or before 15/8/2013. Taking into account the procedure submitted by TANGEDCO, the comments received from the stakeholders and the model regulation issued by the Forum of Regulators, the Commission issued a draft order on Netmetering, LT Connectivity and Renewable

Energy Certificate(REC) inviting comments/ suggestions received from stakeholders to be furnished before 30/9/2013. Taking into account the comments/suggestions received from the stakeholders, the Commission issues this Order on Net-metering, LT Connectivity in regard to Tamil Nadu Solar Energy Policy 2012.

Eligible consumers for Net-metering The categories of consumers eligible for net-metering have been prescribed under Clause 15 and 22.1 of the Tamil Nadu Solar Energy Policy 2012. Such 5 categories have not been defined in the Commission’s regulations or orders. To give more clarity and for easy implementation, the categories of consumers covered under HT tariff II-A, HT tariff III, LT tariff I-A, LT tariff I-C, LT tariff II-A, LT tariff II-B (1) and LT tariff V as specified in the Commission’s retail tariff order in force are considered to be the “Eligible Consumers” for the purpose of Netmetering. Both the existing and new Solar rooftop/Solar systems which comply with this order are eligible for Net-metering.

Metering Two meters have to be installed by the solar power generator. One is for measuring solar power generation and the other is for Import/Export measurement. The first meter, the solar generation meter, has to be installed at the generator end after the inverter at the ground floor of the premises to facilitate easy access for meter reading. Solar generation

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meter is optional for the eligible consumers who are not availing Generation Based Incentives (GBI).

This second meter is a bi-directional meter which will replace the existing consumer meter (Single phase or three phase as per requirement) is used for commercial settlements. If the consumer wishes to have a record of the readings taken, he shall be allowed to do so by the licensee. The first and the second meter have to be installed at the same location where the present meter for consumption is installed.

The meters shall adhere to the standards specified by the Central 6 Electricity Authority (Installation and Operation of Meters) Regulation 2006 and as amended from time to time. Central Electricity Authority’s (CEA) draft regulation on Installation and Operation of Meters 2013 may also be adopted till such time the final regulation/amendment is notified. The type of meters (LT meter, HT meter, TOD meter etc) shall be as specified by the Commission in its relevant regulations/ orders and as amended from time to time.

The Distribution Licensee shall host the list of approved manufacturers of such meters in their website. The solar check meters shall be mandatory for solar installations having capacity more than 20 kW. For installations size of less than or equal to 20 kW, the solar check meters would be optional. The cost of new/additional meter(s) provided for the net-metering and the installation and testing charges shall be borne by the eligible consumers. The Distribution licensee shall procure, test and install the meters. The eligible consumers may supply the meters at their option. Position & sealing of meters will be guided by the same provisions as applicable to consumer meters in the Central Electricity Authority’s metering regulations.

Since hybrid generators are encouraged in the Tamil Nadu Solar Energy Policy 2012, separate sets of meters shall be installed and readings taken for each generator following similar procedure.

The assessor shall take readings of both the solar generation meter and the bidirectional Import/Export meter in case of the consumers availing GBI. A new type of meter-card to record the readings of generation details with the

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facility to incorporate both the assessor’s and consumers’ initials shall be provided by the 7 distribution licensee. Such cards shall also have the details of Generator’s Bank Account Number to which the GBI have to be credited directly by the Tamil Nadu Energy Development Agency(TEDA).

The meter reading taken by the distribution licensee shall form the basis for commercial settlement. At the end of every monthly/bimonthly reading, the solar energy generation will be communicated to TEDA by the distribution licensee through e-mail with a copy to the consumer, to facilitate direct transfer of GBI amount to the generator.

Net-metering configuration diagram is shown in Annexure I.

Commercial arrangements Electricity generated from a Solar rooftop/Solar system and injected into the licensee’s grid shall be capped commercially at 90% of the electricity consumption by the eligible consumer at the end of a settlement

Capacity range

Connecting voltage

Upto 4 kW

240V – single phase or 415V – three phase at the option of the consumer

Above 4kW and 415V – three phase upto 112kW Above 112kW

At HT/EHT level

period. Excess energy generated beyond the 90% cap shall be treated as lapsed.

If the import of energy by the consumer is more than the export in a billing cycle, the net energy consumed has to be billed b y t he Distribution Licensee as per the tariff in force applicable to that category of consumers. Export of energy in excess of the consumption of the consumer in a billing cycle shall be carried forward to the next billing cycle. The settlement period for final settlement of netmetered energy shall be 12 months period from August – July.

There shall be no carry forward of energy allowed to the next settlement period in the following year.

LT Connectivity The Technical Standards for connectivity shall be as specified in the CEA’s (Technical Standards for connectivity of the Distributed Generating Resources) Regulations, 2013 and as amended from time to time T h e m a x i m u m c a p a c i t y fo r interconnection with the grid at a specific voltage level is governed by the Distribution Code/Supply Code and as amended from time to time. The interconnecting voltage level of the distributed generating resources for various capacity ranges are tabulated below as specified in the said codes : This Connectivity norms are applicable to al l the SPGs who seek connectivity at LT network of the distribution licensee. For the purpose of net metering, LT connectivity can be permitted for HT services subject to connectivity norms.

isolation of the SPV from the grid. The inverters used should meet the necessary quality requirements. The protection logics should be tested before commissioning of the plant. Safety certificates for the installation should be obtained from the appropriate authorities.

The automatic isolation of the SPV should be ensured for, no grid supply and low or over voltage conditions and within the required response time. Adequate rated fuses and fast acting circuit breakers on input and output side of the inverters and disconnect /Isolating switches to isolate DC and AC system for maintenance shall be provided.

The consumer should provide for all internal safety and protective mechanism for earthing, surge, DC ground fault, transients etc. as per the CEA regulation/standards.

To prevent back feeding and possible accidents when maintenance works are

Restrictions on grid penetration At the local distribution level connectivity to rooftop solar/solar systems shall be restricted to 30% of the distribution transformer capacity on the basis of first come first served. The maximum cumulative capacity in the Distribution Licensee area shall be limited to the extent prescribed in the Tamil Nadu Solar Energy Policy 2012 and by the Renewal Purchase Obligation(RPO) specified in the Commission’s Regulation on year to year basis.

carried out by distribution licensee personnel in his network, suitable isolator/ isolating disconnect switches which can be locked by distribution licensee personnel should be provided. This is in addition to automatic sensing and isolating on grid supply failure etc and in addition to internal disconnect switches. In the event of distribution licensee LT supply failure, the SPG has to ensure that there will not be any solar power being fed to the LT grid of distribution / licensee. The consumer is solely responsible for any accident to human being/animals whatsoever (fatal/non-fatal/departmental/ nondepartmental) that may occur due to

Standards, Operation and Maintenance of Solar Power Generators (SPGs) The solar power generator (SPG) and equipments shall meet the requirement specified in the CEA’s (Technical Standards for connectivity of the Distributed Generation Resources) Regulations 2013 and as amended from time to time. The responsibility of operation and maintenance of the solar power generator including all accessories and apparatus lies with the solar power generators. The design and installation of the roof top Solar Photo Voltaic(SPV) should be equipped with appropriately rated protective devices to sense any abnormality in the system and carryout automatic 40

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The SPG shall restrict the harmonic generation, flicker within the limit specified in the relevant regulations issued by the Central Electricity Authority.

The inverter should be a sine wave inverter suitable for synchronizing with the distribution licensee’s grid.

Grid interactive solar PV system with battery backup is not under the purview of this order. Any battery backup shall be restricted to the consumer’s network and the consumer shall be responsible to take adequate safety measures to prevent battery power/Diesel Generator(DG) power/backup power extending to distribution licensee’s LT grid on failure of distribution licensee’s grid supply.

Application for Solar Power connectivity shall be in Form-1 and shall be submitted to the respective section officer/designated officer of the distribution licensee alongwith a registration fee of Rs. 100 (Rupees One hundred only). The licensee shall acknowledge the receipt of the application.

Both the parties shall sign a net-metering connection agreement as in Form-2.

Applicability of Renewable Energy Certificates and RPO Net-metering injection is not eligible for REC. The energy adjusted against netmetering arrangement shall qualify as deemed Renewable Purchase Obligation (RPO) for the distribution licensee.

back feeding from the SPG plant when the grid supply is off. The distribution licensee reserves the right to disconnect the consumer installation at any time in the event of such exigencies to prevent accident or damage to men and material.

The consumer shall abide by all the codes and regulations issued by the CEA/ Commission to the extent applicable and in

Court cases Cases have been filed in the appropriate judicial forums against the Commission’s order on the issue related to Tamil Nadu Solar Energy Policy 2012 and the subject is subjudice to the extent of the prayer in the respective petitions. This Order is subject to the outcome of these cases.

force from time to time. The consumer shall comply with CEA/TNERC/CEIG/ distribution licensee’s requirements to the extent i t is

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appl icable with respect to safe, secure and reliable function of the SPG plant and the grid. The power injected into the grid shall be of the required quality in respect of wave shape, frequency, absence of DC components etc.

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Determination Of Tariff For Grid Interactive Solar Power Plants Including Rooftop And Small Solar Photo Voltaic Power Plants M.R.Sreenivasa Murthy - Chairman, Vishvanath Hiremath, K . Srinivasa Rao - Member

Scope of the present Tariff determination: The Tariff determined in this order is applicable to all grid connected Solar PV generators, Solar Thermal power generators and Rooftop Solar Photovoltaic generators entering into power purchase agreements (PPA) on or after 01.04.2013 and during the control period as specified in this Order.

The discussion and decisions on the operational and financial parameters, for determination of tariff for the above plants is given in the following paragraphs.

Determination of Tariff for Solar Photovoltaic, Solar Thermal Power projects and Rooftop solar PV plants: Life of the plant: Commission’s Decision: The Commission notes that as of now there are no grid connected solar PV / Solar thermal plants of MW scale in India which have completed their assumed useful life. However considering the life assured by the manufacturers / developers and the life considered by other Commissions in the country, the Commission decides that the useful life of the plant shall be taken as 25 years.

suggested adoption of a two part tariff or front loaded tariff. It is to be noted that there is no substantial component of variable charges involved in solar power generation and hence a two part tariff may not be justified. The main objective is to build in certainty of revenue flows to the generator and to enable the investor to recover his costs.

The levelised tariff duly considers the time value of money for the period of tariff determination. In order to provide certainty of annual revenue streams to the investors, the Commission decides to adopt levelised single part tariff for a period of 25 years.

Capacity Utilization Factor: Commission’s Decision: Many of the stake holders have endorsed the proposals made in the discussion paper for adoption of CUF at 19% for Solar PV and solar rooftop PV plants, and 23% for Solar thermal power plants.

However, some of the stakeholders have suggested that adoption of a Capacity Degradation Factor should be considered.

Commission’s Decision:

The Commission has not considered the adoption of the capacity degradation factor as suggested by some of the stake holders in the absence of adequate and reliable data. Further the tariff determination is on a generic basis and the CUF has not been considered with reference to any specific technology like concentrated Solar PV with Sun tracking systems.

Some of the stake holders have

As per the data published on the website

Term and Tariff Design:

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of MNRE, the capacity utilisation factor for solar PV plants considered by CERC and most of the SERCs in the country is 19%. In the case of solar thermal plants the CUF considered by CERC and all the other SERCs in the country is 23%.

In the light of the above, the Commission decides to adopt a CUF of 19% for Solar PV, 19% for solar rooftop PV and 23% for solar thermal plants.

Capital Cost: Commission’s Decision: The capital cost consists of the cost of equipment along with the cost of land and civil works. The Commission, in its earlier tariff order dated 13th July 2010 had considered a capital cost of Rs.15.50 Crs. per MW for Solar PV plants and Rs.13 Crs. for Solar thermal plants.

The Commission notes that the Stakeholders have suggested capital cost ranging from Rs.8.00 Crs to Rs.12.75 Crs for Solar PV Plants and Rs.12.00 Crs to Rs.14.00 Crs for Solar thermal plants. However, it is observed that no suggestions are supported with sufficient data.

CERC in its order dated 28th February 2013 in suo-moto Petition No.242/ SM/2012 has decided a benchmark capital cost of Rs.8.00 Crores per MW for solar PV and Rs.12.00 Crores per MW for solar thermal.

In the absence of any reliable data made available by the stakeholders, the Commission has decided to go by the

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benchmark cost determined by CERC as the same is derived after a detailed analysis of the market prices of each element of the capital cost.

The cost of the solar PV modules at Rs.325.92 lakhs per MW has been derived by CERC at an exchange rate of Rs.54.32 per US$ considering the module cost at 0.60 US$/Wp. The present rate of exchange is Rs.61.405 per US$ (as on 04.10.2013) and the average exchange rate in the last six months works out to Rs.59.33 per US$.

Considering an exchange rate of about Rs.60 per US$ and the module cost at 0.60US$/Wp, the cost of the module would be Rs.360 lakhs per MW. Further, considering all other costs as per the benchmarked costs by CERC, the capital cost for Solar PV plants at the present rates would be about Rs.8.30 Crores per MW. Thus, considering the changes in rupee’s exchange rate as suggested by some of the stakeholders, the Commission decides to consider a capital cost of Rs.8.30 Crores per MW for Solar PV Plants.

As regards the solar thermal plants, the Commission notes that the benchmark cost derived by CERC indicates decline in capital costs of solar thermal plants to Rs.12.00 Crores per MW. While some stakeholders have suggested adopting CERC benchmark cost, others have suggested adopting 14 Crores per MW or link capital costs with the size of the plant. However, the claims of increased capital cost are not supported by any data. As such, the Commission decides to consider a capital cost of Rs.12.00 Crs per MW for Solar thermal plants The capital cost of rooftop solar PV plants considered by other SERCs in the Country range from Rs.1.00 lakh to Rs.1.20 lakhs per kW. The Solar Energy Corporation of India, in its proposal for introducing the pilot scheme for large scale grid connected rooftop solar power generation, has estimated the system cost at Rs.0.80 to Rs.0.90 Crores for a 100 kWp solar rooftop PV system.

MNRE in its proposal of solar rooftop generation under JNNSM, has stated that the cost of rooftop PV systems could reach 85000 to 90000 per kW when a developer is able to reach a

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cumulative capacity of 5MW. Considering the above available data on capital cost, the Commission decides to consider a capital cost of Rs.0.90 lakhs per kW for Solar Rooftop and small kW scale Solar PV plants.

Thus, the Capital cost considered for determination of tariff is as follows: Further, in cases of projects availing capital subsidy of 30% the tariff with 30% reduction in capital cost as determined in this Order will be applicable.

Debt Equity Ratio (DE Ratio): The Commission had proposed to adopt a Debt Equity Ratio of 70:30. Based on the Tariff Policy and the Industry norm, the Commission decides to allow 70:30 Debt Equity ratio.

Tenure of Debt:

that availing loans at 250 basis points over the base lending rate may not be Particulars Solar PV Plants

Capital cost Rs.9.40 Crs. to 10.00 Crs. per MW Rs.12.75 Crs. to 14.00 Solar Thermal Plants Crs. Per MW Solar rooftop PV plants 0.80 lakhs to 0.90 lakhs per kW

possible and hence higher interest rates needs to be allowed.

Thus, the Commission decides to adopt an interest rate of 12.30% p.a on long term loans for Solar PV and Solar thermal plants. In case of solar rooftop PV plants and small solar plants, the Commission decides to adopt an interest rate of 12.50% p.a.

Operation & Maintenance expenses:

Commission’s Decision:

Commission’s Decision:

The Commission is of the view that, considering 10 years as the normative tenure for debt repayment will enable the investor to recover its costs in a reasonable period. Considering a longer period for debt repayment will only increase the interest burden on the investor leading to higher tariff.

The Commission is aware that most RE projects obtain loans for capital investment for a tenure of ten years.

Therefore, the Commission decides to adopt loan repayment tenure of ten years.

The proposed O&M expenses of Rs 9 lakhs per MW works out to 1.125% of the capital cost for solar PV plants and Rs.13 lakhs per MW works out to 1% of the capital cost for Solar thermal plants.

Interest on Term Loan: Commission’s Decision: The Commission notes that the base lending rate of SBI is 9.80% (with effect from 19.09.2013). However, considering the fact that many of the stakeholders will be venturing into solar power generation for the first time and also many small investor groups are likely to invest in solar rooftop systems, Capital financing at the base lending rate may not be possible. The interest rate considered for similar plants by other Commissions ranges from 12% to 13%. Considering the risk factors involved in financing such new projects, the Commission decides to allow 250 basis points over the base lending rate.

However, in case of rooftop solar PV plants, the Commission is of the view

While some of the stake holders have agreed with the proposal of the Commission, others have suggested O & M expenses of 0.75% to 1.5% of the capital cost for solar PV, 1.5% of the capital cost for solar thermal plants and 0.5% for solar rooftop PV plants.

As regards the rate of annual escalation, some of the stakeholders have suggested adopting 5.72% annual escalation.

It is observed that while many stakeholders have suggested the levels of O&M expenses to be allowed but have not furnished any reliable information/ data for such suggestions.

The Commission notes that as suggested by stakeholders, while 1.5% of capital cost would be sufficient for solar PV and solar thermal plants, the O & M cost for rooftop PV plants should be more than 1.5% considering the lower capital cost.

Considering the levels of O&M expenses suggested by the stakeholders, the Commission decides to adopt O & M expenses of 1.5% of the capital cost for Solar PV plants and solar thermal plants and 2.0% of the capital cost for

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solar rooftop PV in all cases with an annual escalation of 5.72%.

Working capital: Commission’s Decision: Payment security mechanism in the form of Letter of Credit (LC) is available to the generator to recover his monthly claims of fixed and energy charges. In view of this, provision of working capital equivalent to two month’s receivables is considered reasonable. Hence, the Commission decides to allow two month’s receivables for determining working capital requirement for solar PV plants, solar rooftop PV and solar thermal plants.

Interest on working capital:

tenure of ten years, the Commission decides to allow depreciation of 7% for the first ten years and 1.33% for the remaining fifteen years on straightline method on the capital cost of the asset.

Discount Factor: Commission’s Decision: Considering the approved rate of interest on loan @ 12.30% and Return on Equity @ 16%, with normative debt equity ratio of 70:30, the discount factor works out to 13.41% and the Commission decides to adopt a discount factor of 13.41% for determination of levelised tariff for 25 years.

Auxiliary Consumption:

Commission’s Decision:

Commission’s Decision:

As discussed under the para pertaining to interest on loans, the existing SBI base lending rate is 9.80% w.e.f.

19.09.2013. Allowing a cushion of 250 basis points, the Commission has decided to allow an interest rate of 12.30% for long term loans for solar PV and solar thermal plants. In case of solar rooftop PV plants, the Commission has decided to allow an interest rate of 12.50%. For financing working capital requirements which is on a short term basis, a marginally higher rate of interest would be necessary. Hence, the Commission decides to allow 13% towards interest on working capital for solar PV, solar thermal plants and solar rooftop PV plants.

Considering the suggestions of the stakeholders, the Commission agrees that the solar PV plants also require auxiliary power for air conditioning of inverters and control room, cleaning, water pumping system, security and yard lighting. Hence the Commission decides to allow auxiliary consumption of 0.25% of the generation.

Return on Equity (RoE): Commission’s Decision: The Commission decides to allow 16% Return on Equity. Further, the Commission decides not to consider grossing up the RoE to include the tax element as the tax liability changes from time to time and between different generating companies. Therefore, the Commission decides to allow the actual tax paid annually as a pass through without factoring in the same for tariff computations. Thus, the tax paid will be claimed by the generators directly from the procurer (Distribution Licensees).

Depreciation: Commission’s Decision: Considering 70% of the capital cost to be financed by debt with loan repayment

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As regards solar thermal PV plants, the Commission decides to continue with the auxiliary consumption of 8% of the gross energy generated.

Further the Commission decides not to allow any auxiliary consumption for rooftop solar PV systems.

Other issues: Sharing of Clean Development Mechanism (CDM) benefitsThe Commission decides to continue with the following mechanism for sharing of the CDM benefits between the generating company and the beneficiaries: 100% of gross proceeds on account of CDM benefit are to be retained by the project developer in the first year, after the date of commercial operation of the generating station, In the second year, the share of beneficiaries shall be 10%, which shall be progressively increased by 10% every year till it reaches 50%, where after, the proceeds shall be shared in equal proportion by the generating companies and the beneficiaries.

Grid Connectivity: The Commission decides that, the STU shall arrange necessary facilities to evacuate power from the interconnection point. Further, STU/ESCOMs shall not collect any network augmentation charges towards system augmentation beyond the interconnection point. The developer shall be responsible for providing evacuation facility upto the interconnection point.

In the case of solar rooftop PV of kilowatt scale, the evacuation from 1 kW upto 5 kW installed capacity of solar rooftop PV shall be at single phase 230 volts, the evacuation from 5 kW upto 50 kW installed capacity shall be at 3 phase 415 volts level. Further, solar rooftop PV systems with installed capacity of 50 kW and above shall be connected at 11 kV distribution system. The maximum installed capacity of solar rooftop PV plant at any single location shall be limited upto 1 MW, for the purpose of applying the solar rooftop PV tariff.

The grid connectivity shall be arranged by the distribution licensee in accordance with the prevailing CEA (Technical Standards for Connectivity to the Grid) Regulations 2007, CEA (Technical Standards for Connectivity of the Distributed Generation Resources) Regulations 2012 to be notified by CEA and KERC grid code as amended from time to time. Further, the distribution licensee shall take adequate measures to install necessary protective devices to prevent the possibility of any feedback to the grid in the event of failure of grid power supply to ensure safety of personnel working on the distribution system. Further, safety precautions as stipulated in the CEA (Measures Relating to Safety and Electricity Supply) Regulations 2010 shall be complied with.

Metering: Metering shall be in compliance with the CEA (Installation and Operation of Meters) Regulations 2006 as amended from time to time.

In the case of solar rooftop PV systems connected to LT grid of a distribution company, the concept of net metering shall be adopted and the net energy pumped into the grid shall be billed.

In the event of energy generated

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exceeding the energy consumed during a billing period, the ESCOMs shall pay the rooftop consumer for the surplus energy injected into the grid at the tariff determined in this Order.

In the event of energy consumed by rooftop consumer exceeding the energy generated during a billing period, the rooftop consumer shall pay the ESCOM for energy consumed at the retail supply tariff applicable for that category as per the prevailing Tariff Orders of the Commission. Further, there shall be no change in billing the demand charges.

Applicability of Merit Order dispatch: All grid connected solar power plants inclusive of Kw scale rooftop plants and small solar plants shall be considered as ‘Must Run’ and shall not be subjected to Merit Order Dispatch principles.

Applicability of Wheeling and Banking Charges and Cross Subsidy Surcharge : During the course of the hearing, it was submitted that as the cost of power to be generated is high, if the generators are made to pay Wheeling and Banking charges and the CrossSubsidy Surcharge, they will not be able to sell the electricity generated in the open market as the rates to be realized in the market will not be adequate to cover the cost incurred in setting up of the Plant and its operation. Thus, the solar power generators will be able to sell power only to ESCOMs within the limited scope of solar power to be purchased to fulfil their RPO. The Commission has considered the above submission. It is observed from the prevailing market that the power sold by the RE generators to consumers directly can fetch them only rates comparable to the retail tariff applicable to such consumers. Retail tariff applicable to consumers is generally lower than the solar tariff. If the wheeling and banking charges and the cross-subsidy surcharge is deducted from the rates realized from the third party sales, the net price realized by the generators is not adequate to make solar generation financially viable.

As noticed above, the Commission under Section 86(1)(e) of the Electricity Act, 2003 has a mandate to promote the RE generation by providing suitable measures for connectivity and sale 44

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of electricity (emphasis supplied).

Therefore, as a promotional measure, considering the high cost of generation of Solar power and to enable Solar power generators to sell the electricity generated in the market, the Commission decides not to levy any Wheeling and Banking charges, or Cross-Subsidy Surcharge on the Solar generators who sell electricity on open access within the State.

Control Period: In its tariff order dated 13th July 2010, the Commission had considered control period beginning from 13.07.2010 to 31.03.2013. In the present discussion paper, the Commission had proposed a control period of two years beginning from 01.04.2013 to 31.03.2015.

It is observed that though the gestation period for solar power plants is less than a year, a longer time would be required for an investor to identify and acquire land, achieve financial closure of the proposed project and enter into contract for procurement and commissioning of the plant. Further, sufficient time is also required for creation of infrastructure for evacuation of power. As such, the Commission decides to adopt a control period of five years beginning from 01.04.2013 upto 31.03.2018.

Tariff for grid connected Solar PV, Solar Thermal Power Plants and Roof Top Solar Photovoltaic Plants : On the basis of the approved parameters, the following is the approved tariff : Type of Solar plantt

Approved Tariff in Rs/ Unit

Solar PV Power Plants

8.40

Solar Thermal Power Plants

10.92

Rooftop and Small Solar PV Plants

9.56

Rooftop and Small PV Plants with 30% Capital subsidy

7.20

The above approved tariff is applicable to solar power generators entering into power purchase agreements (PPA) on or after 01.04.2013 and upto 31.03.2018 other than those where the tariff is discovered through bidding process.

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Abstract of cost parameters approved by the Commission: Based on the above decisions of the Commission, the following is the abstract of the parameters considered for determination of tariff: Approved Parameters Particulars

Solar PV

Solar Thermal

Solar Rooftop PV/Small Solar Plants

Capital Cost/MW-Rs. Lakhs Debt: Equity Ratio Debt-Rs. Lakhs/MW Equity-Rs. Lakhs/MW Debt Repayment Tenure in Yrs. Interest charges on Debt-% Capacity Utilisation Factor (CUF) ROE-% Discount Factor -% Auxiliary consumption-% O & M expenses in Rs.Lakhs per MW O & M Escalation p.a.

Working Capital

830 70:30 581 249 10 12.30% 19%

1200 70:30 840 360 10 12.30% 23%

0.90/kW 70:30 0.63/kW 0.27/kW 10 12.50% 19%

16% 13.41% 0.25% 1.5% of CC (12.00) 5.72% 2 months receivables 13.00% 7.00% 1.33%

16% 13.41% 8% 1.5% of CC (18.00) 5.72% 2 months receivables 13.00% 7.00% 1.33%

16% 13.41% 0.00 2% of CC (0.018/kW) 5.72% 2 months receivables 13.00% 7.00% 1.33%

Interest on Working Capital-% Depreciation for first 10 yrs Depreciation for next 15 yrs

Solar Rooftop PV/Small SolarPlants(with 30% capital subsidy) 0.63/kW 70:30 0.441/kW 0.189/kW 10 12.50% 19% 16% 13.41% 0.00 2% of CC (0.018/kW) 5.72% 2 months receivables 13.00% 7.00% 1.33%

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D.C. Samant-Chairman, S.K. Mittal, S. Dhawan - Member

In the matter of Determination of Benchmark Capital Cost for Solar PV and Solar Thermal Power Projects for FY 2013 - 14 and resultant Generic Levellised Tariff .

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n accordance with the provisions of Electricity Act,2003 and National Tariff Policy notified by Govt. of India (GoI) , the Commission under its RERC (Terms and Conditions for Determination of Tariff) Regulations, 2009 had incorporated the enabling provisions for determination of generic tariff for solar power projects.

Capital Cost Commissionâ&#x20AC;&#x2122;s Analysis and Decision Commission clarifies that benchmark capital cost specified by the Commission excludes the cost of transmission line from solar plant to RVPNâ&#x20AC;&#x2122;s 132 kV or 220 kV GSS, receiving power, which is to be borne by a Solar developer. As regards the clarification about Capital cost benchmark, whether Capital cost per MW is for 1 MWp i.e. installed module capacity or 1 MW AC output of a solar plant, it is stated that capital cost benchmark for a solar PV plant refers to cost per MW of the output.

Regarding the comments of the stakeholders to consider the cost of land as Rs. 16.80 Lakh/MW same as considered

by CERC, Commission would like to state that it is also mentioned in the draft order that Capital Cost arrived by CERC is in All India Context. However, the situation varies from State to state. The land used by Solar developers for setting up their Solar Projects in the State is mostly Govt. land; which is being allotted at concessional rate of 10% of the DLC rate (agriculture land) as per the provisions of Rajasthan Land Revenue (Allotment of Land for setting up of Power plant based on Renewable Energy Sources) Rules, 2007 as Page 11 of 27 amended from time to time. In addition to this, the land used

by Solar developer for setting up their Solar projects is mostly a wasteland virtually having negligible commercial utility. Therefore, in view of the above, Commission considers it appropriate not to make any changes in Capital cost norm for a Solar plant on account of land cost.

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One of the developers has requested for considering township as a part of the Capital cost for both Solar PV and Solar Thermal.

Commission would like to clarify that capital cost norms for Solar projects (both Solar PV and Solar thermal) are generic norms and are applicable for both small and large scale projects and small projects do not need a separate colony. The large projects on the other hand have the benefit of economies of scale. In view of the above, Commission, therefore, is not inclined to accept the said contentions.

One of the stakeholders has furnished the solar module spot price (updated on 26.06.2013) showing higher average prices for Silicon Solar module (0.731 $/Watt against 0.667$ considered in the draft order) and thin film solar module ($ 0.664/W against 0.620$/W considered in the draft order) referred in the Commissionâ&#x20AC;&#x2122;s draft order. It is clarified that the price information was analyzed to capture the cost trend of PV modules. It is mentioned that PV insight reports (last updated on 31.07.2013) indicates average price for Silicon Solar module as 0.697 $/W and average price for thin film solar module as 0.613 $/W, which are lower than suggested by the stakeholder. It is clarified that while specifying the benchmark capital cost, the future spot price trends cannot be lost sight of. Considering that solar module prices were almost at the same level even as on 31.07.2013 as indicated in the draft order, Commission is, therefore, of the view that no change is required in the Capital cost benchmark norm on this account.

One of the stakeholders apprised that on insistence of Solar manufacturers Association, Directorate General of Antidumping and Allied Duties (DGAD) has initiated an investigation of imports of Solar cells and expressed that , if any antidumping duty is levied, there are chances of increase of price of modules. Any change in the capital cost bench mark purely based on speculation of imposition of antidumping duty can not be

agreed.

One of the stakeholders has requested to increase the inverter price from ` 60 Lakh/MW to` 90 Lakh/MW in view of spot prices revealed by PV energy trend. Some stakeholders have submitted that since Photo voltaic inverters come with a typical five year warranty, with a provision for a ten year extended warranty, it is, therefore, to be replaced after 12-15 years of operation for which present value of replacement cost of approximately ` 25 Lakh/MW may be considered in capital cost. CERC in their order dated 28.02.2013 in the matter of determination of the benchmark capital cost norm for solar PV and Solar thermal power projects applicable during FY 2013-14, has also observed that some of the inverter manufacturers have started manufacturing in the country. CERC even after considering the replacement cost of inverter after 12 to 15 years, has considered ` 60 Lakh/MW as reasonable cost. Therefore, in view of the above, no change is required in the Capital cost benchmark norm on this account.

Several stakeholders have requested that capital cost for solar PV and solar thermal may be revised on account of foreign exchange rate variation. Commission would like to state that though Commission has not specified the breakup of capital cost benchmark, however, the capital benchmark norms specified are broadly based on benchmark specified by CERC for FY 201314. CERC in their order has considered average currency exchange rate of past six months for arriving at the module cost instead of considering the prevailing exchange rate.

Accordingly, they had considered exchange rate at ` 54.32/US $. Further, it is mentioned that the variation in exchange rate is affected by the prevailing general economic scenario, therefore, is amenable to change either way in future course. Sometimes exchange rates also exhibit abnormal variations. Thus, the suggestions of stakeholders of considering prevailing exchange rate for arriving at module cost cannot be accepted. Commission

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Rajasthan Electricity Regulatory Commission, Jaipur

has, on the other hand, considered average rate of exchange for past six months of Rs 57.62/US$ (1st March 2013 to 30th August 2013), which is the most recent trend of six months period, to smoothen out abnormal exchange rate variations and accordingly, the cost of PV Module increases by ` 19.80 Lakh (= [(57.62/54.32- 1)*325.92). In light of this, total capital cost for solar PV Projects has been increased by Rs. 20.00 Lakh by rounding off.

One of the stakeholders has cited that based on media reports, the capital cost of a commissioned solar thermal project i.e.

Godavari Green Energy Ltd., is coming to ` 15.8 Cr./MW. They have also submitted that capital cost for FY 2013-14 should not be less than ` 12.75 Cr./MW (capital cost for FY 2012-13), it should be minimum ` 13.00 Cr./MW. Commission would like to state that presently Commission is determining the generic capital cost benchmark, where, unless a significant reliable and validated data relating to cost of the commissioned projects is available, it would not be appropriate to change the benchmark norm based on data of a specific project. In view of this, Commission considers it appropriate to retain the capital cost benchmark norm for solar thermal projects as proposed in the draft order i.e. ` 11.80 Cr./MW for FY 2013-14, including connectivity charges of ` 2.00 Lakh/MW.

Capacity Utilisation Factor (CUF) As far as CUF of solar PV plants is concerned, it is mentioned that CUF of plants operating in the state is lower than 20% at some locations and more than 20% at other locations. Further, Commission also observes that throughout the country geographic and climatic conditions vary and it is difficult to expect the same CUF norm for different locations in the country. Commission considers it appropriate to retain the benchmark norm of CUF as 20%. In case of solar thermal plants, in absence of actual data of full one year, Commission is of the views that no change is required for benchmark CUF and accordingly, benchmark CUF of 23% would continue to remain applicable.

De-ration Commission’s Analysis and Decision Commission would clarify that in the initial 3-4 years of operation, there is no considerable de-ration to be accounted 46

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for, as the same is more or less covered in the manufacturer’s guaranteed output of the solar modules. Therefore, Commission considers it appropriate to retain de-ration of 0.50% per annum after two years for solar PV modules.

Auxiliary Consumption Commission’s Analysis and Decision Commission recognizing the requirement of solar plant has allowed auxiliary consumption of 0.25%. Further, Commission has also considered de-ration separately to account for the reduction in generation with passage of time and also, in absence of reliable actual operational data, Commission presently, is not inclined to make any change in auxiliary consumption benchmark for solar PV projects on this account.

Operation and Maintenance (O& M) Expenses Commission’s Analysis and Decision Commission observes that there is hardly any operational experience of MW scale thermal power projects in India to establish the norms for O&M expenses. Commission, therefore, considering an annual escalation of 5.72% over O&M Expenses of Rs. 15.00 Lakh/MW approved for FY 2012-13 with 0.3% towards insurance cost every year on the depreciated value of the assets, arrived at the figure of Rs 15.86 Lakh/MW for FY 2013-14 in the draft order. Accordingly, Commission does not consider it appropriate to make any change in the O&M expenses benchmark for solar thermal projects.

Applicability of Rate of Surcharge Commission’s Analysis and Decision As regards the suggestion of applying surcharge rate of 10% for corporate tax and MAT, it may be mentioned that the most of the plants getting commissioned in the State for supply of power to distribution companies are typically of size 5 to 10 MW and annual taxable income of such plants relevant for levellised tariff would be less than 10 Crores.

Therefore, these would not be subjected to said increased surcharge rate of 10%. In light of the above, Commission considers it appropriate to retain a surcharge rate of 5% in the tariff computations of generic tariff for FY 2013-14.

Other issuesTransmission Charges Commission’s Analysis and Decision As regards the waiving off the transmission charges and losses for solar power projects in line with CERC, Commission would like to observe that this matter relates to amendment in tariff regulations and falls outside of the purview of this order.

Other issues-Applicable Tariff for Solar PV Plants Commission’s Analysis and Decision Commission observes that tariff design should be such which may ensure adequate cash flow stream to the developers in the initial years of the project when debt servicing cost is higher and at the same time, the interests of utility and consumers are protected by avoidance of cost burden during these years. Commission, therefore, has been specifying the levellised tariff for solar power projects commissioned during earlier years. Commission, therefore, considers it appropriate to continue with the past practice of specifying the levellised tariff.

Other issues-Tariff Based bidding Commission’s Analysis and Decision Commission observes that both issues raised by the stakeholder related to the bidding said to be conducted by RREC. RREC, being a trading licensee, therefore, falls outside the domain of regulatory control of the Commission in respect of directions as suggested by the stakeholder. Therefore, Commission is unable to accept the suggestion of the stakeholder at this stage.

Other issues-Penal charges for recovery of wrongly claimed AD benefit Stakeholder’s comments/suggestions Commission’s Analysis and Decision Commission would like to state that penal charges of 1.50% per month for recovering the additional amount of wrongly claimed AD benefit by a power generator have been specified for wind power projects (order dated 17.05.2013) and therefore, Commission considers it appropriate to continue with the same for Solar power projects also.

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Metering Commission’s Analysis and Decision As the metering is now to be done at Generator’s bus bar, the issue of accounting for losses in case of metering at RVPN/ Discom’s sub-station doesn’t arise.

Interest on Term Loan Commission’s Analysis and Decision Commission would like to state that Capital cost has been specified only on the lumpsum basis broadly based on total capital cost specified by CERC keeping in view the overall situation and no break up was specified. In light of this, the contention of the stakeholders is not acceptable.

Rooftop and Small Solar PV and thermal systems: Applicable Tariff (as in draft Order) Commission’s Analysis and Decision Commission would like to state that for setting up of a MW scale power plant, a set of preliminary works are required to be done, which also include land acquisition and development etc. For a typical green field grid connected solar PV MW scale project, the cost components towards land, civil and general works, preliminary and preparative expenses taken together come in the vicinity of 15-17%. For roof top solar PV systems such expenses would be lower. However, CUF for roof top PV systems would be lower as such systems may be located predominantly in the areas having lesser solar radiation when compared with western Rajasthan, which has better solar radiation potential and also due to impact of shading of trees/adjoining buildings. In view of such consideration, Commission has been specifying the same tariff for Rooftop PV Systems as applicable to the MW scale projects. In light of the above position, Commission considers it appropriate to continue with the past practice of specifying same tariff for both roof top PV and small solar plants and MW scale PV projects.

table i.e. with or without availing AD benefit would be a valid tariff for purchase of Solar Power by distribution licensees from solar generation plants set up in Rajasthan.

For a solar power generator claiming the higher tariff worked out as above for projects not availing Accelerated Depreciation benefit , Commission considers it appropriate to lay down modalities as under: (1) The PPA should include an undertaking of the solar power generator that Accelerated Depreciation benefit would not be availed for the generating plant/ unit; (2) The first bill raised by the solar power generator shall be accompanied by an undertaking that Accelerated Depreciation benefit shall not be claimed. Based on this, the applicable tariff would be allowed; (3) The claims of energy charges as per applicable tariff may be entertained based on the said undertaking upto the due date of filing of Income Tax Return of the relevant financial year.

This would mean 30th September, 201 4 for payment for the financial year 1 3 - 1 4 and for the first six months (upto 30 th September) of financial year 1 4 - 1 5 and so on; (4) After filing of Income Tax Return a certificate from a Chartered Accountant (CA) that Accelerated Depreciation has not been claimed would have to be submitted or in the alternative a copy of Income Tax Return filed with Income Tax Department wherein Accelerated Depreciation has not been claimed along with verification of Tax Consultant may be furnished; (5) As Income Tax Return is required to be filed in the next year, the payment of amount corresponding to non - availment of Accelerated Depreciation in respect of energy supplied in the month of October

onwards of the financial year following the financial year of commissioning of the plant would be made only after the said certificate/copy of Income Tax Return is furnished; (6) For the energy supplied in the months of October onwards, the methodology as given in sub - paras (4) & (5) above be followed. Commission also considers it appropriate that undertaking of the power generator in PPA saying that benefit of Accelerated Depreciation would not be availed should also include an undertaking that in case it is found that benefit of Accelerated Depreciation has been claimed, the licensee would be entitled to recover the additional amount wrongly claimed by power generator along with penal charges @ 1.50% per month.

A solar power generator not availing CDM benefit would need to give an annual undertaking that CDM benefit has not been availed. However, if CDM benefit is availed, it would have to be shared with distribution licensee as envisaged in Regulation 42 of RERC Tariff Regulations 2009 .

Grid connectivity charges are governed by regulation 89(2) of current MYT Regulations and therefore, Connectivity charges @ ` 2.00 Lakh per MW , would be payable .

If the capacity in excess of RPO is to be contracted, the licensee must obtain prior approval of the Commission based on reasons and full justification before contracting for capacity in excess of RPO requirement.

The metering shall be at the generator premises as provided in CEA Metering Regulations.

Copy of this Order be sent to the State Government, Central Electricity Authority (CEA), MNRE,RREC, Distribution Licensees and be also placed on the Commission’s web site.

Conclusion The generic tariff levellised for 25 years for two different technologies (solar PV & solar thermal) and for Roof Top and small solar plants is summarized as under: Both the tariff mentioned in the above

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47

P O L I CY & REGUL A T I O N

Punjab State Electricity Regulatory Commission Smt.Romila Dubey, Chairperson, Shri Gurinder Jit Singh, Member

Petition under Section 86 (1) (b) and 86 (1) (e) and other applicable provisions of the Electricity Act, 2003 for purc hase of electricity from solar energy generators in the State of Punjab.

P

unjab State Power Corporation Limited (PSPCL) has filed this petition seeking approval of the Commission to procure electricity including the tariff from solar energy generators to be established in the State of Punjab and also to the draft Power Purchase Agreement (PPA) to be executed with the solar energy generators . PSPCL has submitted that Government of Punjab (GoP) has recently issued New and Renewable Sources of Energy (NRSE) Policy, 2012, which is aimed at the development of renewable energy sources, in particular solar energy generation in the State of Punjab. PSPCL has further submitted that vide letter dated 26.02.2013, Punjab Energy Development Agency (PEDA) informed that the Government of Punjab has approved installation of minimum 300 MW Solar PV power projects in the State in the first phase.

Pursuant to above , PEDA initiated competitive bidding process for inviting generators for the establishment of 300 MW Solar PV power projects in Punjab.

On the basis of the bids received, PEDA allocated a total capacity of 250 MW Solar PV power projects to various developers. The allocations have been made in two categories namely (i) 1 to 4 MW (total capacity of such projects: 50 MW) and (ii) 5 to 30 MW (total capacity of such projects: 200 MW) . The tariff discovered in the competitive bidding process varies from ` 7.20 per kWh to ` 8.70 per kWh for 1 to 4 MW capacity projects and ` 7.67 per kWh to ` 8.74 per kWh for 5 to 30 MW capacity 2 projects. The details of the tariffs discovered and allocations made are attached as per Annexure - 1.

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PSPCL has submitted that solar energy generation is expected to be one of the sources for future renewable energy generation which can be procured in large quantum. It has been further submitted that the solar energy generation has been promoted in various other States and also through the policies issue d by the Government of India (GoI) .

On the same lines GoP has taken proactive steps to ensure development of solar energy generation capacity and at the same time discovered cost through the competitive bidding process. PSPCL has further submitted that it is the distribution licensee in the State of Punjab and is required to fulfil its minimum renewable purchase obligation (RPO) specified by the Commission in its Regulations namely Punjab State Electricity Regulatory Commission (Renewable Purchase Obligation and Its compliance) Regulations, 2011 (RPO Regulations, 2011) . As per these Regulations, the solar RPO for FY 2013 - 14 and FY 2014 - 15 is 0.13% and 0.19% respectively. PSPCL has submitted that the present installed capacity for Solar PV power projects in Punjab is about 10.75 MW and with the addition of aforementioned 250 MW capacity and another 65 MW solar capacity in the pipeline , PSPCL would be able to comply with the solar RPO . PSPCL has intimated that from the year 2015 - 16 onwards, the solar power of about ` 314 crore annually would be purchased from these 250 MW capacity Solar PV power projects at an average tariff of ` 8.37 per kWh. PSPCL has submitted that the total procurement as envisaged is likely to exceed the RPO as specified presently and in the

circumstances filed this petition seeking approval for procurement of 250 MW capacity of solar energy generation in the State of Punjab to be established by the generators as listed in Annexure - 1. It has been submitted that in terms of section 86 (1) (b) and sect ion 86(1)(e), the procurement of electricity including the rate is required to be approved by the Commission . PSPCL has also sought approval of the draft PPA to be signed with the solar power generators.

In the prayer, PSPCL has requested the Commission to approve the procurement of electricity by it from solar energy generators at the tariff discovered in the competitive bidding process conducted by PEDA as per details in Annexure - C to the petition and allow this power purchase cost as a pass through in the Annual Revenue Requirement (ARR) and further requested the Commission to approve the draft PPA , attached as Annexure - E to the petition , with or without modifications.

The petition was admitted by the Commission and PEDA was directed to file reply by 11.10.2013 with a copy to PSPCL as per Commissionâ&#x20AC;&#x2122;s Order dated 25.09.2013.

PEDA in its response filed on 11.10.2013 , while referring to Commissionâ&#x20AC;&#x2122;s Order dated 25.06 .2013 in Petition No. 37 of 2013 (Suo - Motu) , has submitted that in line with the said Order, it invited competitive bids on the basis of discount to be offered by the bidders on the generic tariff determined by the Commission for Solar PV power projects.

PEDA has further submitted that as per National Tariff Policy , the RPO for Solar power is targeted at 3% in the year 2022.

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Therefore to achieve the same, the per year rise on the base of RPO of 0.19% for FY 2013 - 14 specified by the Commission, will be 0.4% per year for which appropriate solar power capacity additions are required. PEDA has contended that, therefore, the addition of 250 MW through the present bidding process is in order and will help in achieving the RPO target in future. PEDA has further submitted that the tariff for the Solar PV power projects arrived at through the competitive bidding process is levellised tariff and will remain same for 25 years (term of the PPA) whereas the tariff for conventional coal based power projects will increase every year due to rise in fuel cost and therefore at some point of time in near future, this solar power will be cheaper than the conventional power from coal based thermal plants . PEDA has prayed that the prayer of PSPCL in the petitio n may be accepted by the Commission.

In the hearing on 15.10.2013, PSPCL submitted that its prayer at Sr.No. (a) be taken up by the Commission on priority and prayer at Sr. No. (b) may be deferred for the time being pending resolution on deviations and variations and that PSPCL shall file an application for this purpose. PSPCL was directed to file the said application by 29.10.2013 with a copy to PEDA. PSPCL was further directed to file additional submission s on the deviations/variations occurring in the draft PPA by 05.11.2013.

The next date of hearing was fixed to be held on 12.11.2013. PSPCL vide its Memo No. 6895/TR - 5/539 dated 06.11.2013 sought extension for filing the submissions by 11.11.2013.

PSPCL has filed the submissions on 11.11.2013 and submitted that in order to expedite the process of approval of procurement of electricity at the tariff discovered in the competitive bidding process conducted by PEDA and approval of the PPA, the present petition may be considered in two parts . Firstly for approval of procurement of electricity at the tariff discovered in the competitive bidding process conducted by PEDA with pass through of cost of this power through ARR of PSPCL 4 and thereafter the approval of PPA to be signed by PSPCL with the project developers . Accordingly, with regard to first part of the petition, PSPCL has prayed to approve the procurement of electricity from solar energy generators at the tariff discovered in the competitive bidding process conducted by PEDA as per

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the details already submitted and allow the power purchase cost to be incurred by PSPCL as pass through in the ARR of PSPCL . In the hearing on 12.11.2013 and as brought out in its Order of even date , the Commission considered the proposal of PSPCL and decided that Order in respect of the first part shall be issued separately. As regards second part, PEDA was directed in the Order dated 12.11.2013 to first take up the draft PPA with the bidders/project developers and obtain their consent/concurrence to the variations/deviations in the draft PPA from corresponding provisions in Request for Proposal (RfP) and Implementation Agreement (IA) and file the same within two/three days.

The Commission notes that PEDA initiated the competitive bidding process in a transparent manner and invited bids from solar PV power project developers for supply of electricity on the basis of discount offered by the bidders on the generic tariff determined by the Commission for Solar PV power projects in the said Order i.e. ` 8.75 per kWh. The Commission further notes that the rates discovered in the bidding process are in the range of ` 7.20 per kWh to ` 8.70 per kWh for 1 to 4 MW capacity projects and ` 7.67 per kWh to ` 8.74 per kWh for 5 to 30 MW capacity projects. The project wise tariff discovered is enclosed as Annexure - 1 to this Order. The Commission further notes that, as brought out by PEDA, the Solar RPO is targeted as 3% by 2022 and would need to be enhanced by 0.4% per year from the current level . To meet this target, about 13 3 0 MW solar capacity is required to be installed by 2022 , considering 6% compound average growth rate of power in Punjab i.e. on an average about 145 MW annually. Presently in its RPO Regulations, 2011, the Commission has specified the RPO upto FY 2014 - 15 and accordingly, RPO beyond this period i.e. FY 2015 - 16 onwards is to be fixed by the Commission. The GoI is pressing hard to bring the solar RPO compliance in the States upto the targeted 3% as per the Tariff Policy. Recently, Joint Secretary, Government of India, Ministry of New and Renewable Energy vide letter dated 29.08. 2013 has emphasized to suitably fix the RPO to match the same with the Tariff Policy. Secretary, Government of India, Ministry of New and Renewable Energy vide D.O. reference dated 04.09.2013 has also requested the Commission for ensuring the RPO compliance. The Commission notes

that the approval granted by the GoP for installation of minimum 300 MW solar PV power projects is a step in the right 5 direction and would help the State to meet the solar RPO target from FY 2015 - 16 onwards . In this regard, the submission

by PSPCL that they would be procuring more solar energy than RPO requirement beyond FY 2014 - 15 is not tenable. The Commission, under section 86 (1) (e) of the Electricity Act, 2003 is mandated to promote generation of electricity from renewable sources of energy . Furthermore, para 6.4 of the Tariff Policy provides for preferential tariff to be determined by the Commission for renewable energy projects while para 5.2.20 of the National Electricity Policy requires adoption of suitable promotional measures for encouraging higher generation from renewable energy sources.

Keeping in view the above, the Commission approves the procurement of electricity by PSPCL from the solar energy generators at the tariff discovered in the competitive bidding process conducted

by PEDA as per details in the attached Annexure - 1. The cost of power purchase from the projects enlisted in Annexure - 1 would be considered as pass through in the ARR of PSPCL. The tariff period for the said projects would be twenty five ( 25 ) years as per Regulation 6(c) of the Central Electricity Regulatory Commission (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2012 adopted by the Commission in its Order dated 19.07.2012 in Petition No. 35 of 2012 (Suo - Motu) with State specific modifications. Further, the tariffs approved above would be applicable upto 31.03.2015 provided that (i) the PPAs are signed on or before 31.03.2014 and the entire capacity covered in each PPA is commissioned on or before 31.03.2015 , in line with Regulation 8 of the said Regulations .

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QUA RT ER RESUL T S

SunEdison’s Third Quarter 2013 Reflects Improved Execution Despite Numerous Challenges Saumya Bansal Gupta - EQ International

Third Quarter 2013 Highlights: •

GAAP revenue of $611.5 million and GAAP EPS of $(0.47)

•

Non-GAAP revenue of $672.0 million and non-GAAP EPS of $(0.00)

•

Solar Energy recognized non-GAAP revenue related to 75 MW of solar energy systems, interconnected 55 MW and ended the quarter with 558 MW

under construction •

Solar project pipeline grew to 3.1 GW and backlog grew to 1.1 GW

•

Semiconductor Materials generated positive cash flow

•

Successfully closed public stock offering netting proceeds of $239.6 million

•

Cash and cash equivalents of $640.3 million at quarter end

under construction and backlog all grew sequentially, with 558 MW under construction at quarter end. Semiconductor Materials again generated cash during the quarter.

Sequentially, the company’s cash and cash equivalents increased $202.3 million, driven primarily by cash inflows from the issuance of common stock, solar project financing and strong working capital management, offset by outflows from increased solar project construction.

“I am pleased with our third quarter performance, and encouraged by the improved execution our solar and semiconductor teams have demonstrated despite numerous challenges,” commented Ahmad Chatila, Chief Executive Officer. “Relative to last quarter, our Solar Energy segment generated improved results and grew our solar project pipeline and backlog. I am very encouraged by the near-term trends in our solar project business. In Semiconductor Materials, a continued soft market remains our primary challenge, but our position remains as strong as ever. We have achieved a more streamlined cost structure while maintaining key customer relationships, both of which we believe will drive value in the semiconductor business when the market turns. Our priority remains to improve our balance sheet and generate strong returns for our shareholders,” Chatila concluded.

Solar Project Pipeline, Backlog & Construction

SunEdison, Inc. announced financial results for the 2013 third quarter that reflected improved execution with some continued softness in its Semiconductor Materials segment. Solar pipeline, projects

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EQ December 2013

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key metrics for the 2013 fourth quarter and revised metrics for full-year 2013. Assuming no significant worldwide economic issues in these periods, the company expects the following:

For the fourth quarter 2013: •

Semiconductor Materials revenue between $220 million and $230 million

•

Solar energy systems total non-GAAP sales volume in the range of 234 MW to 264 MW

•

Solar energy systems MW retained on the balance sheet between 75 MW and 80 MW

•

Solar energy systems MW completed between 309 MW and 344 MW

•

Fully developed solar energy systems average project pricing between $2.75/ watt and $3.50/watt

•

Capital spending between $28 million and $38 million

For the full year 2013: •

Semiconductor Materials revenue between $920 million and $930 million

•

Solar energy systems total non-GAAP sales volume in the range of 405 MW to 435 MW

•

Solar energy systems MW retained on the balance sheet between 100 MW and 105 MW

•

Solar energy systems MW completed

The Solar Energy segment ended the 2013 third quarter with a project pipeline of 3.1 GW, up 231 MW compared to the prior quarter and up 251 MW from the year ago period. Backlog at September 30, 2013 was 1.1 GW, an increase of 28 MW compared to the prior quarter.

Solar projects interconnected during the 2013 third quarter totaled 55 MW and consisted of 42 MW of direct sale projects, 7 MW of sale-leaseback projects and 6 MW of projects held on the balance sheet. During the year, solar project development spends increased to take advantage of market opportunities. As of September 30, 2013, 558 MW of the pipeline was under construction, compared to 200 MW the prior quarter and 117 MW a year ago. “Under construction”

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refers to projects within pipeline and backlog, in various stages of completion, which are not yet operational.

between 505 MW and 540 MW •

Total solar energy systems average project pricing between $3.10 /watt and $3.40 /watt

•

Capital spending between $130 million and $140 million

Outlook The company provided the following

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QUA RT QUA ER RT RESUL ER RES TS

Canadian Solar Expects Module Shipments To China And Japan To Be The Main Drivers Of Demand In The Fourth Quarter Of 2013 Saumya Bansal Gupta - EQ International

Third Quarter 2013 Highlights •

Solar module shipments were 478 MW, compared to 455 MW in the second quarter of 2013.

•

Net revenue was $490.9 million, compared to $380.4 million in the second quarter of 2013.

•

Net revenue from the total solutions business was 41.1% of total net revenue, compared to 25.7% in the second quarter of 2013.

•

Gross margin was 20.4%, compared to 12.8% in the second quarter of 2013.

•

•

•

•

•

•

52

Net revenue for the third quarter of

module shipments in the third quarter of

Diluted earnings per share was $0.56, compared to diluted loss per share of $0.29 in the second quarter of 2013.

2013 was $490.9 million, up 29.1% from

2013 included 60 MW used in the Company’s

$380.4 million in the second quarter of 2013

total solutions business, compared to 35 MW

and up 50.6% from $326.0 million in the

in the second quarter of 2013 and 21 MW

Cash, cash equivalents and restricted cash balances at the end of the quarter totaled $681.7 million, compared to $540.6 million at the end of the second quarter of 2013.

third quarter of 2012. Total solar module

in the third quarter of 2012.

Positive cash flow from operations was $152.0 million, compared to $40.7 million in the second quarter of 2013.

MW in the third

Closed the sale of two solar power plants in Ontario, Canada valued at over C$95 million to TransCanada Corporation (TSX, NYSE: TRP) (“TransCanada”).

shipments to the

Entered an agreement to sell two solar power plants in Ontario, Canada to a fund managed by BlackRock (“BlackRock”).

in the third quarter

Increased the total late-stage solar project pipeline to approximately 1,015 MW, with geographic diversification in Canada, Japan, the U.S. and China.

2013 and 5.7% in

EQ December 2013

shipments in the third quarter of 2013 were 478 MW, compared to 455 MW in the second quarter

By geography, in the third quarter of 2013, sales to European markets represented

of 2013 and 384 quarter of 2012.

Solar

module

Japanese market represented 29.5% of total shipments of 2013, compared to 35.7% in the second quarter of the third quarter of 2012. Solar

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9.5% of net revenue, sales to America

represented 46.9% of net revenue, and sales

generating stable feed-in-tariff income.

leadership, while ensuring the high quality

to Asia and all other markets represented

The Company has been working with the

of our solar products and solutions. We will

43.6% of net revenue, compared to 10.6%,

end buyer of these projects on acceptance

also continue to differentiate our business

37.8% and 51.6%, respectively, in the second

tests before completing these sales. The

model by growing our utility-scale project

quarter of 2013 and 47.9%, 24.9% and

Company expects to realize approximately

pipeline. We have secured 1,015 MW of

27.2%, respectively, in the third quarter

$60 million in additional revenue for each

geographically diversified utility-scale project

of 2012.

project once the transactions are completed.

pipeline, which extends our visibility into our

The Company cannot determine if these

revenue, profitability and cash flow from the

transactions can be closed before the end

total solution business for the next two to

of the fourth quarter of 2013, in particular

three years. As our track record indicates, I

For the fourth quarter of 2013, module

due to the winter weather in Canada, which

am confident that we have the right strategy

shipments are expected to be in the range

may affect the testing schedule. As a result,

and the right team to execute our strategy,

of approximately 480 MW to 500 MW.

it has not factored the sale of either of these

and we believe that Canadian Solar remains

Gross margin for the quarter is expected

two projects into its guidance for the fourth

in a strong position with exciting prospects

to be between 13% and 15%. Shipment

quarter of 2013.

for future profitable growth.”

Business Outlook

and gross margin expectations exclude potential project sales in the fourth quarter as explained below.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, remarked: “We are pleased with our progress to date 

In line with guidance for the fourth

in the execution of our strategy. Clearly, the

quarter of 2013, the Company now expects

industry is emerging from a very challenging

annual module shipments to be approximately

period, with improved pricing power and

1.75 GW to 1.77 GW, at the top end of its

growing demand. As we move forward, our

previous guidance of 1.6 GW to 1.8GW.

strategic direction remains the same. We will

The Company expects module shipments

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maintain our focus on preserving our cost

to China and Japan to be the main drivers of demand in the fourth quarter of 2013.

In addition, it also expects to continue to make further inroads into other key emerging markets in the Americas, Asia and the Middle East. The Company expects its module shipments to Europe will remain at the same level as in the third quarter of 2013, as it continues to see limited demand resulting from the minimum import price required by the recent undertaking agreement with the European Union.

As mentioned previously, the Company has two solar power projects in Ontario, Canada in commercial operation and

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QUA RT ER RESUL T S

Jinko Solar’s Second Consecutive Quarter Of Profitability Saumya Bansal Gupta - EQ International

Third Quarter 2013 Highlights •

Total solar product shipments were 518.9 MW, consisting of 489.3 MW of solar modules, 10.9 MW of silicon wafers and 18.7 MW of solar cells.

This represents an increase of 6.1% from 489.2 MW in the second quarter of 2013 and an increase of 54.8% from 335.2 MW in the third quarter of 2012.

•

As of September 30, 2013, the Company has completed 105MW worth of solar projects and expects additional 108MW to be completed in the fourth quarter.

•

Total revenues were RMB1.96 billion (US$320.7 million), representing an increase of 11.2% from the second quarter of 2013 and an increase of 47.6% from the third quarter of 2012.

•

Electricity revenues generated from solar projects were RMB39.9 million (US$6.5 million), representing an increase of 717.8% from the second quarter of 2013.

•

Gross margin was 22.3%, compared with 17.7% in the second quarter of 2013 and 5.8% in the third quarter of 2012.

•

Income from operations was RMB244.3 million (US$39.9 million), compared with income from operations of RMB155.8 million in the second quarter of 2013 and a loss from operations of RMB111.3 million in the third quarter of 2012.

•

Net income attributable to JinkoSolar Holding Co., Ltd.’s ordinary shareholders was RMB103.5 million (US$16.9 million), compared with a net income attributable to JinkoSolar Holding Co., Ltd.’s ordinary shareholders of RMB49.0 million in the second quarter of 2013 and a net loss attributable to JinkoSolar Holding Co., Ltd.’s ordinary

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EQ December 2013

JinkoSolar defines “in-house gross margin” as the gross margin of PV modules produced using the Company’s in-house produced silicon wafers and solar cells.

shareholders of RMB114.5 million in the third quarter of 2012.

•

Diluted earnings per American depositary share (“ADS”) was RMB4.40 (US$0.72), compared with a diluted earnings per ADS of RMB2.20 in the second quarter of 2013 and a diluted loss per ADS of RMB5.16 in the third quarter of 2012. Each ADS represents four ordinary shares.

•

Cash flow from operating activities was RMB780.4 million (US$127.5 million).

•

Non-GAAP net income1 attributable to JinkoSolar Holding Co., Ltd.’s ordinary shareholders in the third quarter of 2013 was RMB196.9 million (US$32.2 million), compared with a non-GAAP net income attributable to JinkoSolar Holding Co., Ltd.’s ordinary shareholders of RMB74.3 million in the second quarter of 2013 and a non-GAAP net loss attributable to JinkoSolar Holding Co., Ltd.’s ordinary shareholders of RMB87.6 million in the third quarter of 2012.

•

Non-GAAP basic and diluted earnings per ADS were RMB8.72 (US$1.44) and RMB8.40 (US$1.36), respectively in the third quarter of 2013.

second consecutive quarter of profitability following robust quarter-over-quarter growth in revenue, module shipments, and gross margins,” commented Mr. Kangping Chen, JinkoSolar’s Chief Executive Officer. “We have picked up considerable momentum from the strategic investments we made during the downturn. During that time, we successfully penetrated new markets, broadened our geographic reach, and expanded our downstream business, which has already resulted in net profitability for the entire year, a goal we initially set for ourselves to complete by the end of 2013.

We now look forward to closing out the year on an even stronger footing. JinkoSolar is now solidly among the leading global solar PV companies with gross margins that have steadily improved to 22.3% thanks to our leading cost structure, improving global ASPs and growing profits from solar projects. I believe our strong operational and financial performance demonstrates management’s effectiveness and ability to execute its strategy. Having regained profitability for a second quarter, and having achieved net profitability for the entire year a quarter ahead of schedule, we are now devoting our substantial resources and attention towards growing our core PV business and to rapidly expanding our downstream business.”

“I am very proud to report JinkoSolar’s

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energy generator and asset operator, to supply 18.5MWp photovoltaic modules for solar farm projects in the United Kingdom.

“Our exposure globally has continued to grow as we leverage our reputation to diversify our geographic presence globally.

As European markets slow, we continue to seek out new opportunities in exciting solar markets such as China, Japan, US, South Africa, and India.”

discounts and commissions but before offering expenses.

•

Recent Business Developments •

•

In August 2013, JinkoSolar supplied 23MW of Solar PV modules to Swinerton Builders, a leading US Engineering and Construction Company and Clenera, a clean energy finance and management firm.

In August 2013, JinkoSolar supplied 2.3 MW of solar modules for a rooftop system constructed by Sentinel Solar.

The project is the largest roof-top project in Canada and was commissioned under Ontario’s Feed-in Tariff plan.

•

In September 2013, JinkoSolar’s 20MW solar PV power plant project in Shaya, Xinjiang Province and 10MW solar PV power project in Gonghe, Qinghai Province successfully passed the inspection conducted by the national grid. The company has successfully connected more than 100MW of solar PV power projects to the grid.

•

In September 2013, JinkoSolar closed its follow-on public offering of 4,370,000 ADSs at a public offering price of US$16.25 per ADS, including 570,000 ADSs sold pursuant to the underwriters’ exercise in full of their option to purchase additional ADSs. The Company received aggregate net proceeds of approximately $67.8 million, after deducting underwriting

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•

•

In September 2013, JinkoSolar supplied 20MW of highly-efficient solar modules to the State Grid Corporation of China, the world’s largest utilities company for the Second Phase of China’s National Wind/PV/Energy Storage and Transmission Joint Demonstration Project.

In October 2013, JinkoSolar was recognized as one of the “Top 100 Best Employers in China 2013”. The Company was selected by the World Executive Journal in conjunction with the World HR Laboratory, Bossline and CEO-ZINE; organizations that promote company culture and brand awareness of an employer. JinkoSolar was the only solar PV Company recognized.

•

In October 2013, JinkoSolar signed a strategic agreement with the local authority in Electromechanical Industrial Park, Zhenjiang New Area, Jiangsu Province, to develop a 120MW distributed PV power plant within 3 years. It will be the largest distributed PV power plant in China upon its completion.

•

In November 2013, JinkoSolar has become one of the first Chinese solar PV companies to have obtained JIS Q 8901 Certification from TUV Rheinland.

Operations and Business Outlook For the fourth quarter of 2013, we expect total solar module shipments to be in the range of 500MW to 530MW. Full Year 2013 total solar module shipments have been revised upwards, and will now be in the range of 1.7 GW to 1.8 GW compared to the previous guidance of 1.5 GW to 1.7 GW. By the end of the year, total operational solar PV projects are expected to be in the range of 210MW to 230MW.

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In October 2013, JinkoSolar entered into an agreement with Lightsource Renewable Energy, the UK’s largest solar

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QUA RT ER RESUL T S

Renesola: - Experiencing Growth Due To Increasing Geographic Diversity Saumya Bansal Gupta - EQ International

Third Quarter 2013 Financial and Operating Highlights •

Total solar wafer and module shipments were 851.0 MW, representing an increase of 0.2% from 849.3MW in Q2 2013. Total module shipments were 462.9MW, representing an increase of 6.6% from 434.1MW in Q2 2013.

•

Net revenues were US$419.3 million, representing an increase of 11.1% from US$377.4 million in Q2 2013.

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Gross profit was US$34.1 million with a gross margin of 8.1%, in line with the Company’s guidance and up from a gross profit of US$27.4 million, with a gross margin of 7.3% in Q2 2013.

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Operating loss was US$180.3 million, which reflected a non-cash charge of US$202.8 million, including an impairment charge of US$194.7 million on long-lived assets associated with the Company’s Sichuan polysilicon factory, representing an operating margin of negative 43.0% compared to an operating loss of US$16.6 million with an operating margin of negative 4.4% in Q2 2013.

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Net loss attributable to holders of ordinary shares was US$200.3 million, representing basic and diluted loss per share of US$1.12 and basic and diluted loss per American depositary share (“ADS”), each representing two shares, of US$2.23.

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Cash and cash equivalents plus restricted cash totaled US$438.5 million as of the end of Q3 2013, an increase from US$405.8 million as of the end of Q2 2013.

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Net cash inflow from operating activities was US$79.6 million, compared to net cash inflow of US$65.5 million in Q2 2013.

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“During the third quarter, we continued to grow our module business while increasing the geographic diversity of our sales, resulting in another quarter of record shipments and revenue that exceeded guidance,” said Mr. Xianshou Li, ReneSola’s chief executive officer. “We had strong results in our target markets overseas, particularly in the United States, which positively impacted our average selling price. We also explored more extensively our global footprint by adding OEM capacity in more regions and further expanding our overseas sales distribution network to both existing and new markets.

Strong overall demand supported growth in our total module shipments and selling prices, a trend we expect to continue in the fourth

quarter. In the third quarter, we achieved a gross margin of over eight percent, an improvement from last quarter. We also received certification for a number of our newer products, which may serve as our future business growth driver.”

“At the end of September, after carefully assessing the operating status of our polysilicon factory, we came to the conclusion that our efforts to reduce the production cost at the Phase I facility of the polysilicon factory were unsuccessful. We decided to permanently cease production at the Phase I facility in October 2013. As a result, we recognized a significant non-cash impairment charge for the third quarter. We

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believe the discontinuation of production at the Phase I facility will help reduce our polysilicon production cost, in line with our efforts to achieve a target cost level that would make our in-house polysilicon production cost-efficient compared to the prevailing market price of polysilicon. In addition, we believe the discontinuation will help reduce our power consumption and depreciation and therefore help to enhance our profitability going forward. While the solar sector remains highly competitive and subject to political uncertainties, we are confident our international approach to our module business and continuing investments in new technologies will support our longerterm goals,” said Mr. Li.

Recent Business Developments •

In December 2013, ReneSola announced that by the end of 2013, it is expected to deliver 63MW of its Virtus II PV modules to SunEnergy1, a leading solar engineering, procurement and construction firm based in North Carolina.

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In November 2013, ReneSola announced that in collaboration with California solar installer Pickett Solar, it will contribute over 1.9MW of highefficiency PV modules to power SunWest Fruit Company’s fruit-packing facility in Parlier, California.

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In November 2013, ReneSola announced it delivered 1MW of its 305W Virtus II PV modules to Hecate Energy, a leading U.S. based developer of power projects.

The 3,280 1000V modules will power a project in Georgia, U.S.

•

In November 2013, ReneSola announced that, under its contract with NIPPON STEEL & SUMIKIN BUSSAN MATEX

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CO., LTD., a Tokyo-based provider of steel and industrial supply, the Company successfully completed delivery of 2MW

of its highest-efficiency polysilicon modules, VirtusII® 260W, in support of a 4MW mega solar project in Uenoharashi, Yamanashi Prefecture, Japan.

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In November 2013, ReneSola announced it will deliver more than 178,000 PV modules, which will be used in a 53.5MW project being developed by OCI Solar Power.

In November 2013, ReneSola announced its collaboration with Solar Side Up of Golden, Colorado in a series of projects totaling 44.5KW in solar PV arrays.

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In November 2013, ReneSola announced the completion of a 2.5MW solar PV facility near Roswell, New Mexico.

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In October 2013, ReneSola announced it had successfully renewed its PowerGuard warranty insurance policy through August 2014. The policy began in 2012 and provides coverage for all ReneSola solar panels.

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In October 2013, ReneSola announced it had donated solar PV modules to the Brian D. Robertson Memorial Solar Schools Fund. 12 educational facilities in Illinois have received solar PV modules that are soon to be installed.

Outlook For Q4 2013, the Company expects total module shipments to be in the range of 490MW to 510MW, and expects overall gross margin to be in the range of 9% to 11%.

For the full year 2013, the Company expects total solar wafer and module shipments to be in the range of 3.0GW to 3.1GW, with solar module shipments expected to be in the range of 1.70GW to 1.75GW.

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`Trina Solar :- Delivered Better-ThanExpected Performance Saumya Bansal Gupta - EQ International

Third Quarter 2013 Financial and Operating Highlights •

Solar module shipments were approximately 775 MW during the third quarter of 2013, an increase of 19.8% from the second quarter of 2013

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Net revenues were $548.4 million, an increase of 24.4% from the second quarter of 2013

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Gross profit was $83.4 million, an increase of 62.9% from the second quarter of 2013

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Gross margin was 15.2%, compared to 11.6% in the second quarter of 2013

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The Company recorded an accounts receivable provision of $9.9 million in the third quarter of 2013

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Operating income was $6.0 million, compared to an operating loss of $23.9 million in the second quarter of 2013

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Operating margin was 1.1%, compared to negative 5.4% in the second quarter of 2013

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Net income was $9.9 million, compared to a net loss of $33.7 million in the second quarter of 2013

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Earnings per fully diluted American Depositary Share (“ADS” and each ADS represents 50 of the Company’s ordinary shares) was $0.14, compared to loss per fully diluted ADS of $0.47 in the second quarter of 2013 “I am pleased to report that we have

returned to profitability and delivered a better-than-expected performance across a number of key operating metrics. Our third quarter module shipments exceeded the high end of our expectations by almost 100 MW, driven by strong demand across most of our key markets,” said Mr. JifanGao, chairman and CEO of Trina Solar. “While average selling prices and polysilicon costs continue to stabilize in the third quarter, consolidation in the solar industry will also continue as it aligns more closely with supply. As a result of our ongoing efforts in improving our operational efficiency and controlling manufacturing costs, we achieved a further reduction in non-silicon costs, which contributed to notable quarter-on-quarter margin improvement.

“In the third quarter we saw continued strong demand in our key markets, driven in particular by increasing demand in China, North America, Japan and the UK, where we have further strengthened our leading positions. In the meantime, we continue to successfully achieve our aim of

diversifying our geographical footprint, with non-EU markets now comprising a majority of our sales. We expect this diversification will continue to support sustainable growth in volume and revenues.

“Our decades-long investment in building a premier reputation globally for quality, reliable products and services has also produced great results in the domestic market, further enhanced by favorable industry conditions and regulatory environment.

We have experienced a strong and growing demand for our products in China, where we continue to be seen as a preferred business partner.

“As a long-term goal, we are committed to investing in innovation and R&D to promote the ongoing development of the solar industry. Our Changzhou PV laboratory is one of the first PV laboratories in China to receive accreditation from China’s Ministry of Science and Technology as a State Key Laboratory of PV Science and Technology.

This is a clear endorsement of Trina Solar’s ongoing efforts and expertise in solar innovation and R&D. We remain committed to the development of high-efficiency products tailored to the needs of our customers, with Trinasmart being the most recent example of our ongoing achievements on this front.

We believe these efforts further enhance the recognition of our brand.

“On regulatory developments, the agreement reached between Europe and China that sets a minimum price for Chinese panels and a maximum cap on annual

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Fourth Quarter and fiscal year 2013 Guidance During the fourth quarter of 2013, the Company expects to ship between 760 MW to 790 MW of PV modules.

The Company believes its overall gross margin for the fourth quarter, taking into account wafer and cell quantities outsourced from third party suppliers to meet demand in excess of its internal capacity and other needs will be in the mid-teens in percentage terms.

shipments provides a degree of certainty in Europe. While Europe will continue to be an important geographical region for sales and marketing, we are also committed to geographical diversification and continued expansion, in order to take advantage of favorable market conditions where they exist and limit exposure to risks associated with other markets.”

Recent Business Highlights 250 MW AC) to the Copper Mountain Solar 3 project in Boulder City, Nevada, USA.

During the third quarter of 2013, the Company: •

Announced that it received the new International Electrotechnical Commission (IEC) 61730-2 standard certification with Class A Fire Safety from TUV Rheinland for its new frameless PDG5 modules. Trina Solar is the first manufacturer in Asia to obtain this certification.

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Announced the commercial availability of an enhanced version of its industryleading Trinasmart modules, embedded with Smart Curve technology.

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Announced that it supplied 7 MW of photovoltaic modules to Ikaros Solar, a leading company dedicated to the installation of green solar energy systems, for an agricultural project at Goose Willow Farm in the town of Abington in the UK.

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Announced that it had redeemed, together with all accrued but unpaid interest, all remaining outstanding convertible senior notes due 2013 on July 15, 2013.

With this redemption, Trina Solar has no outstanding convertible debt.

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Announced that it would provide 1.1 million of its 72-cell PV multi-crystalline modules (a total of 345 MW in DC power; equivalent to approximately

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Announced that it held its 2013 annual general meeting of shareholders on September 3, 2013. Each of the proposals submitted for shareholder approval was approved.

Such guidance is based on the exchange rate between the Euro and the U.S. dollar as of November 19, 2013.

For the full year 2013, the Company revises its previous PV module shipment guidance of between 2.3 GW and 2.4 GW to 2.58 GW and 2.62 GW.

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First Solar Ends Third Quarter With Increased Net Sales Saumya Bansal Gupta - EQ International •

Record Quarterly Net sales of $1.3 billion

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GAAP EPS of $1.94 per fully diluted share, Non-GAAP EPS of $2.28 per fully diluted share

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Cash and Marketable Securities of $1.5 billion, Net Cash of $1.3 billion

First Solar, Inc. announced its financial results for the third quarter of 2013 as Net sales increased by $746 million from the prior quarter and an increase of $427 million from the third quarter of 2012. The sequential increase in net sales is primarily attributable to higher systems business project revenues, which included initial revenue recognition of Desert Sunlight and the sale of the ABW projects in Canada. Compared to the third quarter of 2012, the increase in net sales was also attributable to the Desert Sunlight and ABW projects and higher sales volume to third-party module-only customers in the third quarter of 2013, partially offset by initial revenue recognition for Topaz, achieved in the third quarter of 2012.

Revenues for the first nine months of 2013 were $2.5 billion compared to $2.3 billion for the first nine months of 2012.

The Company reported third quarter net income per fully diluted share of $1.94, compared to $0.37 in the second quarter of 2013 and $1.00 in the third quarter of 2012.

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The third quarter of 2013 was impacted by pre-tax asset impairment charges of $56.6 million related to the recently announced agreement to sell the Company’s facility in Mesa, Arizona. The sale of the facility is expected to provide additional liquidity to the Company in the form of cash sale proceeds, net of costs to sell, of approximately $115 million, and is expected to result in a net reduction in annual operating expenses (including both depreciation expense and cash expenditures) of approximately $10 million. The Company expects the Net cash

proceeds from the sale to be received in the fourth quarter of this year. Excluding the impact of the asset impairment charge, Non-GAAP net income per fully diluted share was $2.28. The sequential increase in Non-

GAAP earnings is primarily attributable to the initial revenue recognition of Desert Sunlight, the sale of the ABW projects, and higher sales volumes to third-party moduleonly customers in the third quarter compared to the second quarter. The year over year increase in earnings was primarily due to higher systems business project revenue, higher manufacturing utilization and higher module sales to third-party customers in the third quarter of 2013 compared to the third quarter of 2012.

Cash and Marketable Securities at the end of the third quarter were approximately $1.5 billion, an increase of approximately $247 million compared to the end of the second quarter of 2013. The Company’s Net Cash grew to approximately $1.3 billion, an increase of approximately $274 million from the second quarter of 2013. Cash flows from operations were $375 million in the third quarter, compared to $222 million for the second quarter of 2013.

“The third quarter marks a key milestone in our Company’s progress in achieving the strategic objectives we outlined during our Analyst Day event in April,” said Jim Hughes, CEO of First Solar. “During the quarter we delivered on several key objectives, including additional bookings of 860MWdc, significant reductions to our module manufacturing cost, and strong financial performance. With these encouraging results achieved, we move

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forward, focusing on strengthening our leadership position in the marketplace and achieving our strategic objectives for future success.”

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Yingli Green Energy:- Rapid Growth Expected in China, the United States, Japan Saumya Bansal Gupta - EQ International •

Total net revenues were RMB 3,649.4 million (US$596.3 million).

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Total PV module shipments increased by 5.1% from the second quarter of 2013.

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Overall gross profit was RMB 498.8 million (US$81.5 million), representing a gross margin of 13.7%.

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Operating loss was RMB 70.3 million (US$11.5 million), representing an operating margin of negative 1.9%.

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Net loss was RMB 235.6 million (US$38.5 million) and loss per ordinary share and per American depositary share (“ADS”) was RMB 1.50 (US$0.25).

On an adjusted non-GAAP basis, net loss was RMB 226.6 million (US$37.0 million) and loss per ordinary share and per ADS was RMB 1.45 (US$0.24).

“We are delighted to see a continued rapid growth in demand from China, the United States, Japan and other emerging PV markets in the third quarter, driving our shipments to another historical high. Due to the stabilized average selling price of PV modules and the Company’s unwavering focus on bringing costs down, our gross margin in

the third quarter increased to 13.7% from 11.8% in the second quarter, exceeding our previous guidance of 11% to 13%,” commented Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy.

the Americas accounted for more than half of our total shipments for the first time in our history. As project developers accelerated construction of utility scale projects in China due to the adjustment of feed-in tariff, sales

“While European markets continued to make adjustments under the new Undertaking Agreement with higher average selling prices combined with softer demand in the third quarter of 2013, shipments into China and

to China accounted for 38% of our total shipments in the third quarter, compared to 28% in the previous quarter. Meanwhile, shipments to the U.S. market as a percentage exceeded that to the European market as grid parity became achievable in more states in the U.S. and there was also rapid growth in the distributed generation segment.

Likewise, our shipments to Japan rose by 35% compared to previous quarter due to strong demand for high quality PV modules.

Demand from other emerging markets also grew rapidly throughout all segments, both commercial and residential.”

“Turn to the downstream business, we achieved a remarkable quarterly results with 368% sequentially increase in revenues from PV systems. In addition to the stabilized average selling price in this quarter, reduced

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manufacturing costs also contributed towards our overall profitability. As our cell efficiency roadmap shows, we are targeting to reach conversion efficiency rates of 19% and 23% for our multi and mono cells, respectively, on commercial production lines by the end of year 2020. This roadmap represents our commitment in reducing total manufacturing costs and demonstrates our confidence in achieving technological progress.â&#x20AC;? â&#x20AC;&#x153;Based on the current robust market demand and the strengthening of the geographic diversification of our products, we are confident to achieve our shipments guidance for the full year of 2013,â&#x20AC;? Mr. Miao concluded.

Business Outlook for Full Year 2013 Based on current market and operating conditions, estimated production capacity and forecasted customer demand, the Company reiterates its PV module shipment target to be in the estimated range of 3.2 GW to 3.3 GW for fiscal year 2013, which represents an increase of 39.4% to 43.7% compared to fiscal year 2012.

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Indian Solar Market â&#x20AC;&#x201C; Forecasting a Better 2014 after a Lackluster Year Mercom Communications India

I

t has been a quiet year for the Indian solar sector, with installations at 900 MW so far this year and final numbers forecasted to be similar to last year. With 420 MW of CSP projects missing commissioning dates, India is not likely to register any significant year-over-year installation growth for 2013, even as global solar market is forecasted to grow ~20%.

The guidelines and requests for selection (RfS) have finally been published for Phase

prices and a ~15 percent rupee depreciation, all of which contributed to overall project costs. At the same time, reverse auctions in India continue to defy odds and go in the opposite direction with record low bidding, especially in states that have an L1 type bidding mechanism (lowest bid must be matched by all) in place. Current economic conditions, solar irradiance and off-taker creditworthiness do not look to be reflected in these bids. With bids fluctuating almost 50

and market intelligence to be successful in this environment.

India is entering election season with state elections in Chhattisgarh, Madhya Pradesh, Mizoram, Rajasthan and Delhi due next month. According to the guidelines by the Election Commission of India, non-agricultural land transactions cannot be approved by the government during election season without the approval of the Chief Electoral Officer.

This will delay any solar projects that are in the middle of land acquisitions by a few months.With some states yet to sign PPAs and upcoming state and general elections, our preliminary estimates are tentatively at 1,750 MW of solar installations in India for 2014. Although the projected installation growth looks impressive, it includes 420 MW of CSP projects that did not get installed in 2013.

Local solar industry views on current market conditions II Batch I, for 750 MW of PV projects.

Unfortunately, India has decided to include domestic content requirements for half (375 MW) of PV projects, which may be enough to cause a trade dispute but not enough to help domestic manufacturers. It is an unnecessary risk that raises uncertainty with minimal reward.

percent over the year when comparing stateto-state, it is imperative to have deep insight

Project developers we talk to are not sure they can make profits at the low bids

According to the proposed time line, these 750 MW of JNNSM Phase II projects will not be commissioned until at least May 2015. Therefore, projects under Indian state schemes are where the action will be in 2014.The challenges faced by the Indian economy this year also affected solar industry. This year the market has seen high inflation, a ~8 percent rise in module

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we see in some states, though there are a few states with healthy tariffs. Their opinion is that the viability gap funding (VGF) mechanism was unnecessary as they thought that the current model was working. The consensus is that the disbursement of VGF is too complicated and takes 5 years to get reimbursed compared to immediate payment after completion for other infrastructure projects. While some developers said they would bid for projects both with and without domestic content requirements (DCR), their concern was that financing will be challenging with a 5 year VGF payment period. This may work for large companies with large balance sheets, but less so for developers looking for non-recourse financing. Considering that the planning commission has already acknowledged problems with the VGF and the public-private partnership model and is working on a draft bill to fix some of these issues, it is baffling as to why they would continue to experiment with a model that is obviously problematic, especially in a new sector like solar.

All the developers we spoke with agree that margins are razor thin; most bids do not take solar irradiation, inflation, currency depreciation, and off-taker creditworthiness into account. A tariff of 6.50 (~$0.11) in one state is not the same as a 6.50 (~$0.11) tariff in another. Developers are hoping to see a correction phase where bids go up in line with current market conditions. However, concerns remain that too many inexperienced firms are bidding recklessly. This is typical in most of the infrastructure projects in India.

The message from developers is to keep it simple and consistent; there is no need to experiment if something is working. There needs to be strict enforcement of rules already implemented instead of bad behavior being rewarded.

Utility push back against captive generation is a very interesting development brought to our attention. We hear that utilities are objecting and putting up hurdles against large corporations starting captive

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power projects. They are afraid to lose these big paying customers but they also are not providing quality power without cuts. This is a development we will continue to monitor.

Surprisingly, manufacturers were upbeat, feel that demand has improved, and hope for continued domestic content requirements.

In our conversations with manufacturers representing close to 50 percent of the solar manufacturing capacity in India, capacity utilization rates were quoted in the 70-100 percent range, which is completely at odds with the ~25 percent utilization rates quoted in the media in an effort to get help from the government. The average selling prices quoted were in the $0.65-0.70/W (~?3942/W) range. Some local manufacturers have started manufacturing modules for Chinese companies, which then get shipped to Europe.

Price pressure remains the single biggest challenge for local manufacturers.

Financial institutions are very focused on quality projects that have strong credible partners and good EPC providers. Panel manufacturer credibility is very important to some banks. One large bank said that they have not yet financed a single project so far that is using domestically-manufactured panels. They see DCR as a concern. Because of low bids and credit rating of utilities, banks, fearful of inconsistent payments, are concerned about lending to projects. Most said that they need more clarity before they will lend on VGF projects.

Update on Select India State Policies JNNSM – Phase I Phase I Batch I: PPAs for Batch I projects were signed for 610 MW (140 MW-PV, 470 MW-CSP). 140 MW of PV projects have been commissioned and only one 50 MW CSP project has been completed out of the 470 MW that were originally due to be commissioned by May 2013.

The remaining projects have been given

an extension until March 2014. Our due diligence indicates that 150 MW of the 470 MW CSP projects are in advanced stages of development. Once commissioned, these projects will receive tariffs between ?10.4912.24 (~$0.18-$0.20), a premium of almost 40-50 percent over new PV projects (most of which are currently bidding in the ?6.508.00/~$0.11-0.13 range). These projects will not be penalized for delaying uto a year. It is time to eliminate the required PV:CSP ratio for good and let the market decide on the best and most cost-effective technologies.

Phase I Batch II: 330 MW of the 340 MW in Batch II have been commissioned with the remaining 10 MW delayed and most likely will be canceled.

JNNSM - Phase II As previously mentioned, after almost a year of delays, final guidelines and RfS for JNNSM Phase II Batch I were published recently. 750 MW of grid-connected PV projects will be auctioned under the viability gap funding scheme. Because of the delay in announcing Phase II, these projects are not expected to be commissioned until at least May 2015.

Out of the 750 MW, 375 MW will have a separate bidding process and will have a domestic content requirement under which solar cells and modules used must be made in India. Developers can either opt to bid for “DCR” or “open” categories.

The “open” category will have no domestic content requirement.Under VGF, developers will sign a PPA for 25 years to sell power at a fixed tariff of 5.45/kWh (~$0.09/kWh).

In the case of accelerated depreciation, the tariff will be reduced by 10 percent to 4.75/ kWh (~$0.08/kWh). The maximum limit for VGF is 30 percent of the project cost, or 2.5 crore/MW (~$416,667/MW), whichever is lower.

There have been some mechanisms added to ensure project performance; a minimum capacity utilization factor (CUF) of 17 percent over a year has been set.

Projects have to maintain a CUF within -15 percent and +10 percent of their declared value until the end of 10 years from Commercial Operations Date subject to the CUF remaining over a minimum of 15 and within -20 percent and +10 percent thereafter until the end of the PPA duration of 25 years.Another major change in the guideline compared to the draft proposal is

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and Andhra Pradesh which could happen next year.

Punjab: Of the 300 MW proposed, Punjab opened bidding for about 250 MW of PV projects. With average tariffs ranging between ?8.20-8.40 (~$0.13-0.14)/kWh, PPAs are expected to be signed for these projects next month. The delay in signing PPAs can be attributed to land acquisition problems and delays due to upcoming elections.

Uttar Pradesh: Uttar Pradesh opened bidding for about 130 MW of PV projects, with average tariffs ranging between ?8.01?9.33 (~$0.13-$0.16)/kWh, which is probably the best in India right now along with Punjab.

PPAs for these projects are expected to be signed in the next few weeks.

the payment schedule which has not been welcomed by developers. The VGF payment will be released in tranches: 50 percent on successful commissioning of the full capacity of the project, and the rest progressively over the following 5 years (10% each year) subject to the project meeting generation requirements (CUF) within a specified range per the policy guidelines.

Tamil Nadu: Tamil Nadu announced a 1,000 MW tender in December 2012 for PV projects. Tamil Nadu used an L1 bidding process. Fifty-two developers have signed letters of intent (PPA due to be signed shortly) for a total of 698 MW at ?6.48 (~$0.11/kWh). Developers have 10 months to commission these projects from the date of PPA signing.

Tamil Nadu Generation and Distribution Corporation (the state owned utility and off-taker also referred to as TANGEDCO) is also considered a high-risk off-taker due to its poor credit-worthiness and history of delayed payments.

Gujarat: Gujarat currently has 857 MW of PV projects commissioned under its state policy, the most of any Indian state so far.

Gujarat, known as the most business-friendly state, inexplicably sought to cut the tariff rate it pays to projects, citing excessive profits from project owners. The petition for this cut was rejected but we confirmed that Gujarat Urja Vikas Nigam Limited (GUVNL) is

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planning to file an appeal with regulators.

It will be a crushing blow to Gujarat’s reputation as a business-friendly state if it continues to pursue this path of retroactive tariff cuts. There is nothing that business and investors hate more than retroactively changing laws.

Andhra Pradesh: The government of Andhra Pradesh has decided to allow any company to set up a solar project in the state at ?6.49 (~$0.11) per kWh, including those who have not participated in the recently-concluded competitive bidding for 1,000 MW. PPAs have been signed for 147 MW of PV projects and another 125 MW of PPAs will be signed soon according to Transmission Corporation of Andhra Pradesh Limited (APTRANSCO). No solar projects are expected to be commissioned this year.

Eastern Power Distribution Company of AP Limited (APEPDCL), in association with New and Renewable Energy Development Corporation of Andhra Pradesh (NREDCAP), has launched net metering to encourage consumers to produce solar power. Under this scheme, domestic users would be allowed a maximum subsidy of 50 percent of the cost of installing a solar rooftop project (up to 3 kW).

Kerala: The 10,000 rooftop solar power plant program is currently being implemented out of which approximately 6,000 installations are complete. The remaining 4,000 installations are expected to be complete by December 2013. These projects are up to 1 kWp in size and for captive use.

Under a competitive procurement policy, the government expects to develop 330 MW of solar projects of which 50 MW are under construction and due to be commissioned by December 14, 2013.

Rajasthan: To date, there are 40 MW of solar projects installed under Rajasthan’s state policy. Bidding for 75 MW of solar projects took place in March 2013. The land allocation for these projects is in progress, but delayed due to upcoming elections.

Rajasthan Ren ewable En ergy Corporation Limited (RRECL) has also invited an RfP for selection of 50 solar projects of 1 MW each; the deadline for which is extended until November 25, 2013.

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The Government of India has also given its initial go-ahead on splitting the state of Andhra Pradesh into two states, Telangana

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EQ - 2013 ISSUES The EQ Team Would Like to Thank You for your support & Cooperation in Helping us become the No.1 Publication on Solar & Renewable Energy Market in India and Completing Yet Another Successful Year 2013.

The Next Edition will be Anniversary Issue in January 2014.

Wishing you Merry Christmas and Happy & Prosperous New Year 2014.

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Anand Gupta Editor & CEO

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Solar Canada 2013

Date: 9-10, Dec-2013 Place: Toronto, Canada Organiser: Cansia Tel.: +1 866 5226742-222 Email: schester@cansia.ca Web.: solarcanadaconference.ca

International Conference on Emerging Trends in Renewable Energy Date: 27-18Dec-2013 Place: Bhubaneswar, Odisha, India Organiser: Department of Mechanical

Engineering,C.V. Raman College of Engineering Tel.: +91 8763760530 Email: icetre2013@gmail.com Web.: cvrce.edu.in/icetre_home.htm

9th Power On International Battery & Alternate Power Sources Exhibition & Conference Date: 10-13Jan-2013 Place: Pune, India Organiser: Shivam Info Tel.: +91 11 22137081 Email: anjali@batteryfair.co.in Web.: www.batteryfair.co.in

World Future Energy Summit 2014 Date: 20-22Jan-2013 Place: Abu Dhabi, United Arab Emirates Organiser: Reedxepo Tel.: +971 504528168 Email: claude.talj@reedexpo.ae Web.: www.worldfutureenergysummit.com

Vega Green Energy

Date: 31Jan-02Feb-2013 Place: Hyderabad, India Organiser: Vega Environ Tel.: +91 9177477599 Email: chandu.r@vegaenviron.com Web.: vegagreenenergy.com

Energy, Utility & Environment Conference 2014 Date: 3-5Feb-2013 Place: Phoenix, Arizona, USA Organiser: EUEC Tel.: +1 520 6153535 Email: info@euec.com Web.: www.euec.com

InterSOLUTION 2014

Date: 15-17Jan-2013 Place: Ghent, Belgium Organiser: Intersolution Tel.: +32 9 3857719 Email: info@intersolution.be Web.: www.intersolution.be/en

Solar Power Generation USA 2014 Date: 4-5Feb-2013 Place: San Diego, Canifornia, USA Organiser: Green Power Conferences Tel.: +44 207 0990600 Email: info@greenpowerconferences.com Web.: www.solarpowergenerationusa.com

Indian Renewable Energy Summit 2014 Date: 12-13Feb2013 Place: Gandhinagar, Gujarat, India Organiser: Green Global Source Tel.: +91 7567697809 Email: info@greenglobalsource.com Web.: www.indianrenewableenergysummit.com

Power Purchase Agreement 2014 Date: 11-14Feb2013 Place: Johannesburg, South Africa Organiser: Infocus International Tel.: +65 6325 0210 Email: register@infocusinternational.com Web.: www.infocusinternational.com/ppa

SEMICON Korea 2014

Date: 12-14Feb2013 Place: Seoul, Korea Organiser : SEMI Tel.: +82 2 5317800 Email: semiconkorea@semi.org Web.: www.semiconkorea.org

The International Exhibition CleanTech 2014 Date: 18-19Feb2013 Place: Tel Aviv, Israel Organiser: Mashov Group Tel.: +972 8 6273838 Email: info@mashov.net Web.: cleantech.mashovgroup.net

forum-solarprax...

2nd Annual Egypt Power and Electricity Summit Date: 19-20Jan-2013 Place: Cairo, Egypt Organiser: IQPC Tel.: +971 4 364 2975 Email: enquiry@iqpc.ae Web.: www.egyptelectricity.com

Solar Middle East 2014

Date: 11-13Feb2013 Place: Dubai, The United Arab Emirates Organiser: Informa Exhibitions Tel.: +971 4 3365161 Email: info@solarmiddleeast.ae Web.: www.solarmiddleeast.ae

Africa Energy Indaba 2014 Date: 18-20Feb2013 Place: Johannesburg, South Africa Organiser: Siyenza Management Tel.: +27 11 4639184 Email: info@siyenza.za.com Web.: www.energyindaba.co.za

For Listing of your Event : Conference and events are listed free-of-charge, so please feel free to get in touch to tell us about your event. We would also be happy to provide you with free copies of magazine for distribution at your events.(while stock last). Please send your conference information to : Mr. Gourav Garg at gourav.garg@EQmag.net

68

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EQ provides unique Insights & Transparency in Power Generation, Clean Energy, Low Carbon Technologies, Carbon Markets.

Latest Industry Information, News, Research & Analysis, Technology & Products Information, Business & Financial News, Policy & Regulation is delivered to an interesting diverse readership base in Energy Corporations, Government, Policy Makers & Regulators, Consultancy & Advisory Firms, Associations, Banking & Financial World * PLATFORM : EQ offers a diverse & integrated platform with its Bi-Monthly Technical Magazine (Distributed in Print & Digital Formats), Special Supplements addressing Specific industry, Weekly E Newsletters, Diverse Digital Publishing with its appearance on Web, iPad, Kindle, iPhone, Blackberry, Android Platforms (COMING SOON) along with strong emphasis on Social Networking @ Facebook, Twitter to enhance your reach, visibility, branding and addressing the issues you feel are most important. * REACH : EQ Maintains a strong focus on the Indian Market from where it is published with 12,500 Copies distributed to Key Decision Makers. Approximately 2,500 copies are printed for Select International presence. Its unique and strong digital presence (Distributed to 100,000 Contacts) takes it beyond borders and get popularity in International Market. * PRESENCE : EQ is present in almost all Fair & Conference in India and the Most important International Events.

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EQ International Magazine Editorial Advisory Board

Shivanand Nimbargi MD & CEO Green Infra Limited

Rajesh Bhat - Managing Director juwi India Renewable Energies Pvt Ltd

Oliver. Behrendt Managing Director - REFU Solar Electronics Pvt Ltd

Ravi Khanna - CEO Solar Power Business Aditya Birla Group

Gyanesh Chaudhary Managing Director Vikram Solar Private Limited

Gaurav Sood Managing Director Solairedirect Energy India Pvt Ltd

Inderpreet Wadhwa CEO Azure Power

Sunil Jaini Chief Exe. Off. & Exe. Director Hero Future Energies Pvt Ltd.

Pashupathy Gopalan Managing Director MEMC-SunEdison

Paulo Soares CFO & Director Inspira Martifer Solar Ltd

K Subramanyam Former CEO Tata BP Solar

Shaji John Chief Solar Initiatives, L&T

R.N.I. NO. MPBIL/2013/50966 | DT OF PUBLICATION: DEC. 20 | POSTAL REGD.NO. MP/IDC/1435/2013-2015

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