Country: India |
Sector: Solar |
Name of Project: Gandhinagar Rooftop Solar Project |
Contracting agency: Gujarat State Petrochemical Corporation Limited/ Department of Energy and Petrochemicals |
Agency type: Sub-national entity |
Contract term: 25 years |
Construction period: - |
Bid Parameter: Technical qualification and lowest tariff |
Total cost of project: $9 million |
Total Population served: 12000 |
Per unit cost: ~ 19 cents/unit |
Basic specifications: Industry best standards are used, government's agreed technical specifications |
Stage of project: The agreements were signed in April 2012. The projects are operational |
Time taken for processing project from concept to contract execution: 18 months |
Local or foreign investor: Local investors, Azure Power and SunEdison |
Applicable legislation: Gujarat Solar Power Policy 2009, Gujarat Infrastructure Development Act 1999 |
Approving authority: Committee headed by the Chief Secretary for approval of PPP projects, Principal Secretary, Energy & Petro Chemicals, Government of Gujarat who is also Chairman cum Managing Director, Gujarat Power Corporation Limited at line Ministry level |
Is the approval process the same as for other projects: Yes |
Role of Private Party: Procure financing; install solar photovoltaic panels on the rooftops of public buildings made available by government and on private residences and connect to grid; identification of private rooftop space; supply to grid |
Role of Public Authority: Provide access to rooftops of public buildings; facilitate Power Purchase Agreement (PPA) with power procurer; monitor contract according to performance standards |
Financing: IFC loan of $3 million to Azure Power; other financiers were IDBI Bank, India; financial support of $300,000 was provided by Netherlands and Finland. |
Payment Mechanism: The local private power distributor Torrent Power buys the power according to the PPA and pays based on the tariff set through bid. |
Tariff: Tariff is based on bid. |
Comparison to existing rates: - |
Government Support: Facilitation of PPA; public rooftops made available by government |
Other advantages: Emissions savings of 6000 tons |
Contingent liabilities created: Termination payments- 3 year equivalent of tariff payment in case of Government of Gujarat default. |
Risks: Site risk |
Level of risk: Low for demand risk as well as site as the public entity covers these adequately as shown under the risk mitigating features |
Key risk mitigating features: PPA covers the demand / revenue risk, most of the rooftop sites are public buildings committed to be made available by government |
Factors affecting decisions on the size of project or population serviced by the project: This specific project was small, but government has been looking to prepare packages of a size acceptable to the investors. The Gandhinagar project consists of two projects of 2.5 MW each totaling approximately $15 million |
Lessons learned: • Policy framework is required in order to scale up the projects-the IFC is now working on a policy framework for rooftop solar, regulations are being drafted by the forum of regulators • Multiple agreements needed to be signed: rental agreements between private provider and the private residential owners; between the private entity and the public entities owning rooftop space; but there were no standardized documents-for example, appropriate rental agreements for renting rooftop space had to be developed from scratch for this project. • Grid connectivity issues needed to be solved and a framework for connecting such projects to grid could be useful • Choosing between technical options-in this case the issue was between choosing concentrated solar power or photovoltaic panels • Whether gross metering model should be used or the net metering model; there were no specific guidelines for choosing options • Multiple jurisdictions can be joined as seen from the efforts to bundle 5 cities into 3 packages for rooftop solar projects in Gujarat following the first success of this specific project. |