has large-scale solar got its sums right?...project development longer development cycle means more...
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Has Large-Scale Solar got its Sums right?
EPC Perspective
Vikas Bansal
Head of International Business Development
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DRIVERS: LEVELIZED COST OF ELECTRICITY
Other CAPEX
Project Development Longer Development Cycle means more Cost
Insurance Africa/SE Asia/Argentina has High Cost of Insurance ( MIGA,CAR)
OPEX Remote locations have higher cost of SLAs
due to low installation base
Generation Higher Module Efficiency
1500 V Technology
Bi Facial Modules
Automated Cleaning Technologies
EPC CAPEX PV Module: Recent increase in Prices
Tracker: Higher Steel Cost in 2017
Local Cost (Civil, Installation): Low in Middle East,
India, Mexico, could be 2X in Africa , Argentina or Bangladesh
Transportations: Extremely high in Africa
Construction Period Interest During Construction
Africa/SE Asia/Australia have longer construction Period
Borrowing Rate Higher for Africa, Parts of Asia
DFIs are usually more expensive
2017 VS 2016 2018 VS 2017
Levelized Cost of Electricity
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TARIFF TREND, EXPECTATION GAP: IPP, LENDER AND EPC
TARIFF (USD/MW-Hr)
0
10
20
30
40
50
60
70
80
90
2015 2016 2017
IPP/DEVELOPER
• Aggressive assumptions on business
model: Technology, Construction
Timelines, Design Life, Capex (Module
Price), Opex and Contingencies
• Abundant Capital: Deployment
Pressure
• Medium term perspective: More Capex
Driven
LENDER
• Zero risk on Technology and
Construction: Transfer all risk to EPC
• Long term perspective (Loan
Tenure): Life Time Cost Driver
Balancing Act: EPC
• Immense Pressure to justify Business Model
assumptions of IPP
• Meet Lenders expectations to keep Life Time
cost low
• Difficult to maintain balance between profits
and liabilities