Prospects for International Green Energy Equity Investments Private Equity perspective - India

Transcription

1 Prospects for International Green Energy Equity Investments Private Equity perspective - India

2 Green / Renewable Energy and Energy Efficiency Indian Renewable Energy Sector Landscape few examples Policy recommendations

3 Green / Renewable Energy Energy which helps mitigate the perils of climate change attain energy security inclusive growth (important for developing countries) employment generation Cleantech resource conservation Energy generation infrastructure which does not degrade the environment 3

4 Renewable energy & energy Integral part of climate change mitigation measures Huge scope for energy conservation (NEGAWATTS) and efficiency improvement Huge untapped market Viable opportunities in wind, biomass & hydro 4

5 Green / Renewable Energy and Energy Efficiency Indian Renewable Energy Sector Landscape few examples Policy recommendations

6 Value Proposition Why Indian RE market? Consistent Demand-Supply Gaps of 10% + National priority to increase energy security and focus on climate change Abundant untapped resources Transformational regulatory policy changes A compelling opportunity to access the growing Indian renewable energy market Low deployment and local manufacturing costs Strong domestic project financing market Among the top 3 markets globally* *E&Y country attractiveness index based on regulatory environment, fiscal support, unexploited resourcessuitability to different technologies and other factors.

7 Indian renewable energy market drivers Global Drivers Conventional Energy Price & Volatility Energy Security Climate Change Government Policy Technology innovation & decreasing cost Additional Indian Drivers Large demand-supply gap and high economic growth rate Net energy importer Abundant untapped Resources Low cost manufacturing Types of opportunities Projects Based Global Value Chain Enablers Indian Wedge Positive Policy Interventions Strong domestic project financing market Mature carbon market The drivers are more pronounced thus making India a very attractive market 7

8 Indian renewable energy market sector trends Energy Source Installed Capacity (MW) Total Potential (MW) Wind 11,807 46,000 60,000 Biomass / Cogen Solar Power Small Hydro (<25 MW) Waste to Energy 2,200 25, (grid connected) 50,000 2,735 15, ,700 Key Sector Trends o Several local suppliers, low deployment cost o Mature regulations and GBI to boost equity returns o Large IPPs begin to emerge o Packaged (Site+Turbine) model is prevalent o Huge wastelands tracts to be utilized for biomass o Govt. funding support for cogen power generation o National Solar Mission to develop 1.3 GW by 2012 and 20GW by 2022 o Unharnessed sector, key to long term energy security o Low cost manufacturing base to bring down cost o Closest to grid parity o Mature technology o Ecologically safe as compared to large hydro o Emerging sector with huge Govt. support o Closest to load center o Increasing Private Sector Participation Total 16, ,700 [x] % untapped potential and growing at a [y] % CAGR Large untapped potential across all sectors

9 Indian renewable energy policy landscape Enabling policies National Solar Mission for 20 GW solar power Renewable Power Obligations (RPO) (2%-10% presently and to be made mandatory for all states) Renewable Energy Certificates (REC) Open Access, Power Trading and Group-Captive sale Guaranteed power off-take Project Funding support related Capital subsidy for Small Hydro Soft loans disbursment through IREDA Preferential import and excise duties Funding for Bagasse Cogen plants Monetary incentives to improve project viability 10 year Income Tax holiday Higher and long term feed-in tariffs Generation based incentive (GBI) for wind projects 80% accelerated depreciation in case of wind and solar projects Indicative impact of policies on project attractiveness Positive policy direction to support renewables growth

10 Green / Renewable Energy and Energy Efficiency Indian Renewable Energy Sector Landscape few examples Policy recommendations

11 Landscape Astonfield Greenko OGPL Auro Mira Green Infra Origination Promoters Investors and Investment Operational Capacity (MW) Pipeline (MW) Focus Sectors Amit Shah, Sourabh Sen Private Anil & Mahesh Aloe, AIM listing (72 M Euro),GEF (31%), (46.3 M), TPG (35 M -10%) (B & H) 778 (S) (B) Solar (Key) and Bio 400 Hydro (Key), Bio, Wind, Solar Shriram EPC Shriram EPC (10 M), Bessemer (10M), Olympus (35M) 40 (B)+152 (W) 274 (B)+ 300 (W) + 15 (H) Wind and Biomass (Key) N. Srinivasan Barings (25 M) IDFC PE Funds IDFC PE Fund II (27 M) and Fund III (54 M) 17.5 (B) 124 (W) 47.5 (B) (H) + 50 (W) Bio (Key), Hydro, Wind 215(W)* + 50(H)* + 24(B)* + 15(S)* Wind, Hydro, Bioenergy, Solar, EE GI Differentiators Rapid Growth, Positive EBITDA Co within 2 years Professionally Managed Co. with high corporate governance standards One of the largest renewable IPP in India Diversified Pipeline across sectors *(Only active pipeline considered) Key differentiators make Green Infra stand out

12 Wind IPP a representative case Investment per MW of capacity ~ USD 1.2 to 1.3 Project IRR at P75 ~ 13.5 * Equity IRR ~ 16 to 20% * * inclusive of CER revenue, and GBI Availability of debt finance from Banks and IREDA Qualifies for 80% depreciation, 80 I benefit (Tax holiday) High class outsourced EPC and O&M Green Infra s experience of successfully managing 124 MW 12

13 Green / Renewable Energy and Energy Efficiency Indian Renewable Energy Sector Landscape few examples Policy recommendations

14 Policy Recommendations- Solar Solar thermal Recognition of solar thermal in a hybrid solution Tariff and CERs for Hybrid Solutions Solar PV Distribution license for off grid Solar power producers Policy support for cost effective equipments Introduction of concept of tax equity 14

15 Policy Recommendations- EE Regulatory requirement to cut down energy intensity in energy intensive industry on a YOY basis Credit enhancement measures for the dues of ESCOs by providing them the rights equivalent to distribution companies in case of non payment Monetary incentive for the producers of energy efficient gadgets / equipments / conductors / storage media LEDs 15

16 Policy Recommendations- Biomass Recognition of biomass energy in a hybrid solution Tariff and CERs for biomass energy in hybrid solution Assistance in waste land acquisition for biomass based energy generation Regulatory support to make farmers co-operatives accountable for performance of long term contracts Monetary incentive for distributed energy generation using bio solutions Introduction of concept of tax equity 16

17 Policy Recommendations- Wind Introduction of concept of tax equity Policy support for cost effective equipments Policy support for open access to wind power (infirm!) Monetary support for storage based solutions Promotion of point base land use vs contiguous land uses National data base of wind resource availability at relevant heights 17

18 Policy Recommendations- small hydro Introduction of concept of tax equity Policy support for cost effective equipments Policy support for open access to small hydro based energy Promotion of canal based small/micro hydro solutions Availability of long term funding support Time bound availability of licensing rights 18

19 ENERGY EFFICIENCY THANKS