Asia ESCO Conference 2010 Accelerating ESCO Movement in Utility Demand Side Management Programs Gaurav Bhatiani Principal Energy Specialist, USAID Rakesh K Goyal Chief of Party, PA Consulting Panel 1:ESCO Strategies, Policy and Program January 14, 2010
An Emerging Crisis in Water & Power • 90% of ground water is used in agriculture • India a topper in ground water use • There is no water usage policy • Water rights are passed with the rights of land • Groundwater levels are falling by 3 - 10 feet/ year US 300 W. Europe Spain 250 Mexico 200 China India 150 Pakistan Bangladesh 100 Sri Lanka Vietnam 50 Ghana Water is a Global Crisis, but the 0 S Africa scale of groundwater use in India is 1940 1950 1960 1970 1980 1990 2000 2010 Tunisia unique Source: Shah, T, International Water Management Institute, (2005) Page 2 00781-9
Importance of Efficiency in Agriculture Sector Agriculture consumes 23% of power at national level and in many states it accounts for 40% of power. At national level, agriculture uses 38% of water (90% groundwater) 55 – 60% population dependent on groundwater Availability of Demand Govt subsidy water both for Financial Livelihood supply gap in of Rs. 30,000 irrigation and health of of farmers power sector Crore per drinking power sector annum Page 3 00781-9
Power Savings Potential S.N. Measures Potential for Savings 1 Efficient Pumpset 25-40% 2 Suction Pipe & Foot Valve 5-15% 3 Efficient Irrigation Methods 15-25% 4 Total Saving Potential 45-80% Page 4 00781-9
ESCO Based Solution Demonstrated First Ever ESCO deal in Agricultural Demand Side Management on a performance contract basis Public-Private Partnership with a 10 year agreement Location: Doddaballapur (BESCOM) Project Name Water Energy Nexus (WENEXA) Geographical area 11,000 acres No. of villages/population 29/17,000 Supported By USAID % net sown area 75% Implemented by PA Consulting % irrigated area 16% Major crops Mulberry & grapes DISCOM Bangalore Electricity Supply Company (BESCOM) Depth to ground water 200-400 ft ESCO Selected Enzen Global Solutions, Bangalore No. of feeders/pumpsets 4/700 Typical pumpset capacity 5-10 HP Project Site Doddabalapur, 60 KM from Bangalore city Page 5 00781-9
ESCO Based Solution Demonstrated First Ever ESCO deal in Agricultural Demand Side Management on a performance contract basis Public-Private Partnership with a 10 year agreement Location: Doddaballapur (BESCOM) Geographical area 11,000 acres No. of villages/population 29/17,000 % net sown area 75% % irrigated area 16% Major crops Mulberry & grapes Depth to ground water 200-400 ft No. of feeders/pumpsets 4/700 Typical pumpset capacity 5-10 HP Page 6 00781-9
Innovation Developed Farmers - get NHEP, Project based on after-sales services, good commercial principles quality power & required Long term horizon – Market based approach amount of water n no ‘snap back’ effect o Utility – energy savings i t Project risks shared a with greater opportunity u among stakeholders t i cost 46% s and ESCO n ESCO – profit from i w saving energy, payback - n i in three years W Innovation Rules of public procurement followed Active engagement of all stakeholders Risk Mitigation Extensive groundwork – studies, information – reduce perceived project risks Page 7 00781-9
Solution Demonstrated: Key Features BESCOM provided all the preconditions for the project – HVDS installed. – One Distribution Transformer for each pump. – Meters on all Distribution transformer – NGO working and educating farmers for four years – Detailed data available on pumps and pump efficiency – BESCOM obtained in principle agreement from KERC & the Government of Karnataka to proceed on a pilot program Farmers get a new branded energy efficient pumpset free with a 18 month warranty. ESCO to implement the pumpset replacement as a part of the Ag DSM program – ESCO finances the investment required – Provides ongoing O&M support to farmers and establishes a site office ESCO recoups investments through sharing of the energy served 8 Page 8 00781-9
The Process Followed Electrical Selection Capacity Project Risk Bid process network up of ESCO building execution Mitigation gradation Electricity savings HVDS Data collection Draft RFP and Bid evaluation Farmers Agreements marketing Capacitor Mining Presentation by DISCOM M&V Protocol banks and Pre NIT bidders employees >>> Keeping Presentation electronic Pre- bid Financial ESCO stakeholders meters Preparing meeting evaluation informed business Award model Site visit 2005-2008 2008- 2009 2009 ONGOING 2009 Page 9 00781-9
Network Upgradation: HVDS and Metering ATC Loss at BESCOM's Pilot Site 50.0 46.5 Trend line Actual 41.8 41.4 39.2 38.9 39.3 40.0 36.9 36.6 36.5 34.3 34.3 33.5 34.2 32.3 35.8 37.4 30.9 30.7 % Loss 31.6 29.9 35.7 29.5 30.3 30.0 32.6 32.3 25.2 29.1 29.7 29.9 27.7 29.4 30.0 29.2 28.8 27.8 21.9 27.5 29.9 26.7 26.9 25.3 24.8 23.8 20.8 20.0 17.8 Target - 12% 17.0 17.0 16.0 16.0 19.7 19.0 16.2 10.0 Nov'05 Jan'06 Jun'06 Nov'06 Jan'07 Jun'07 Nov'07 Jan'08 Jun'08 Nov'08 Jan'09 June'09 Jul'05 Aug'05 Sep'05 Dec'05 Feb'06 Mar'06 Apr'06 Jul'06 Aug'06 Feb'07 Mar'07 Apr'07 Sept'07 Feb'08 Mar'08 Jul'08 Sept'08 Dec'08 Feb'09 Mar'09 Apr'09 Jul-09 Aug-09 Sep-09 Oct'05 May'06 Sep'06 Oct'06 Dec'06 May'07 July'07 Aug'07 Oct'07 Dec'07 April'08 May'08 Aug'08 Oct'08 May'09 Oct-09 Month % Loss Target Linear (% Loss) Page 10 00781-9
Network Upgradation: HVDS and Metering ATC Loss at BESCOM's Pilot Site 50.0 46.5 Trend line Actual 41.8 41.4 39.2 38.9 39.3 40.0 36.9 36.6 36.5 34.3 34.3 33.5 34.2 32.3 35.8 37.4 30.9 30.7 % Loss 31.6 29.9 35.7 29.5 30.3 30.0 32.6 32.3 25.2 29.1 29.7 29.9 27.7 29.4 30.0 29.2 28.8 27.8 21.9 27.5 29.9 26.9 26.7 25.3 24.8 23.8 20.8 20.0 17.8 Target - 12% 17.0 17.0 16.0 16.0 19.7 19.0 16.2 10.0 5 6 6 6 7 7 7 8 8 8 9 5 6 6 6 6 7 7 7 7 8 8 8 8 9 9 9 9 9 9 9 5 5 5 5 6 6 6 6 6 7 7 7 7 7 8 8 8 8 8 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ' ' ' ' ' ' ' ' ' ' ' ' ' ' v n ' ' ' ' n ' ' v n ' ' ' ' n ' ' v n ' ' ' n ' ' ' v n ' ' ' ' - - - l ' ' ' r r l ' ' ' r r ' ' ' r ' l ' ' r r e - g p t c b y g p t c b y y g t t c b l y g t t c b y l u p u p u p u g p t c o a a u c o a a u p c o a a i u p c o a a e a e a l e r a e a n u e e u e e u e u e c J O A J O A u e O p J e O A u e N J M J N J M J N J M J N J M u J F F F F O A S D M A S D M A D M A D M J A S S A S J Month % Loss Target Linear (% Loss) Page 11 00781-9
Risk Mitigation: Contents of the RFP Volume –I – RFP Document – Draft Agreement between BESCOM and ESCO – Draft Agreement between ESCO and Farmer Volume-II (on CD) – Annex. A to H- regarding site study about feeders, land, irrigation, pump etc carried out by various agencies. Annexure A: Concept Note on Agricultural DSM (June, 2007) Annexure B: Financing Agricultural DSM Projects. (Aug, 2008) Annexure C: Map of Feeders 12 & 13 in project area (200a6) Annexure D: Land use maps for Feeders 12 & 13 in in the project area (July 2008) Annexure E: Pumpset Survey for Feeders 12 & 13 in the project area (Updated 2008) Annexure F: Water Balance Study in parts of Doddaballapura Taluk, (October 2008) Annexure G: DPR: Irrigation Efficiency Improvements Feeder 12 and 13 (2006) Annexure H: Farmers’ Education in Doddabballapura (2004-2008) ) 12 Page 12 00781-9
The Bid Process: Pre-Bid Meeting Page 13 00781-9
The Bid Process: Site Visit Page 14 00781-9
Selection: Technical & Financial Criteria Technical Criteria Maximum Points Understanding of the Problem & Technical Approach 30 Proposed Organization, Staffing and prior experience 50 related to the project Innovation & other factors 15 Usage of (BEE) Star-rated pumpsets 05 Applicant with a score of 70 or more shall be declared as technically qualified. Financial Criteria Energy Saving in the project with reference to the base X (say) line (in %) Proportion of Energy saving proposed to be shared with Y (say) BESCOM (in %) Bidding Parameter (in %) X*Y Applicant proposing the highest value of bidding parameter shall be the finalist ESCO Page 15 00781-9
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