The power sector is currently experiencing its most significant transformation globally in history, fueled mainly by the urgent need for cleaner energy. With this transformation, Renewable energy is set to grow at an accelerated pace, giving rise to a newer global energy economy. However, the government's 2030 target to achieve 50% of installed capacity from non-fossil fuel-based generation, along with a long-term target of achieving net-zero emissions by 2070, poses significant challenges for both developers and system planners. In line with these, the government has set ambitious medium term targets to reduce emission intensity by 45% from 2005 levels by 2030, achieve 50% of non-fossil fuel capacity by 2030, and create a carbon sink of 2.5-3.0 billion tons of carbon dioxide.
Further, to achieve net-zero emissions by 2070, the Indian government has also introduced the Net Zero Emissions Bill, 2022 with an aim to provide relief for vulnerable communities from the effects of climate change, as per India's nationally determined contributions under the UNFCC; while Energy Conservation Amendment Act, 2022 poises to bring in voluntary markets into force by July 2023 in addition to mandatory de-carbonization of buildings and industries.
As of March 2023, the total installed capacity of renewables reached ~172 GW (including large hydro), majorly influenced by a considerable addition of solar power projects, which have seen significant growth over the last decade. The Ministry of Power has also identified a trajectory for the energy mix that states need to follow, with the goal of achieving 43.33% renewable energy by 2030, indicating the government's efforts for emergence of renewable dominated energy mix.
Due to such changing market dynamics and the introduction of new instruments into the market there are significant challenges for consumers and distribution utilities as well, especially in devising their portfolio strategies or moving towards 100% renewable energy.
To help the clients with a variety of challenges, Mercados EMI offers strategic guidance to private sector companies, banks, and utilities on the best effectively possible ways to navigate and capitalize on the opportunities in the emerging markets while adapting to changing environmental policies. Our services encompass a range of Policy, Regulatory, technical, and strategic challenges that are relevant to the renewable energy sector guided by a strong set of values.
Mercados offers bid advisory support for conventional, renewable and downstream City gas distribution projects and offers end to end services including the following:
- Site selection/relative ranking of opportunities
- Overall fitment with strengths of Client, Identification of project risks and mitigation strategy
- Undertaking market surveys/demand assessment
- Assistance in finalizing the assumptions of capital expenditure requirements
- Preparation of financial models
- Scenario Analysis- key project financials
- Preparation of Bid formats – assistance in submissions
- Assistance in reverse bidding (if applicable)
- Contract Signing support.
In case required, we also assist the clients in finding a strategic partner for pursuing projects on a large scale.
Mercados has this core expertise in undertaking market assessment and entry strategy for clients desiring into the Indian Energy Space in conventional, renewable and midstream/downstream gas business. We offer specialized services covering the entire portfolio from analysis to actual on ground support in establishing the business in India. The scope of services includes the following key activities:
- Analysis of Sector Landscape – Policy and Regulatory Scenario
- Identification of risks across value chain
- PEST analysis, Entry barriers, competition analysis
- Strategic fitment of client and need for external support- JV/strategic partner
- Demand Supply analysis
- Development of Financial model- scenario analysis
- Go-to market strategy and expected market share over the business plan period
- Identification of strategic partners/JV partners
- Commercial/Financial Due-diligence
- Hand-holding support in initial setting-up of business in India
Mercados EMI helps to shape policy and regulatory regimes, and advises regulated companies on how to optimize their performance and improve profitability within the regulatory framework.
Our services draw on the outstanding background of our experts that have assisted Utilities across the South Asian region.
This practice includes services related economic and commercial analysis of key regulatory decisions on sectors and assets through development of comprehensive business plans and financial models.
Mercados assists the clients at different phases of the project to estimate renewable resource for sites and prepare feasibility reports and bankable detailed project reports. Mercados understands and prepare feasibility reports and detailed project reports (DPR) specific to the sectors to meet client’s business requirements. We help Financial Institutions, Independent Project Developers (IPP), Captive consumers and multilateral institutes in following aspects:
- Detailed geotechnical analysis of sites
- Site specific resource assessment
- Meteorological data validation
- Generation estimates through PVSyst and other modelling softwares
- Infrastructure adequacy
- Grid availability
- Yield prediction
- Social and Environmental Impact Assessment
- Financial modelling
- Business model strategy
- Technology evaluation and selection
- Outline designs and layouts
- DPR preparation
- With growth in Renewable energy penetration it is paramount to know:
- Which are the issues and problems renewable energy poses to the power system.
- Which are the means to overcome these problems.
- Which are the regulatory measures adopted and if they are suitable or not.
- Renewable energy impact on the power system in the following ways
- Grid stability: Most of the installed RE energy used a technology which was very sensitive to grid voltage variations.
- Wind turbines disconnected from the grid when facing voltage dips.
- As a consequence, there was a big wind generation loss when the grid faced transient conditions with sudden voltage changes (the so- called voltage dips).
- The subsequent generation lack must be balanced instantaneously by importing energy from the interconnection with neighboring countries.
- The Spanish interconnection capacity with the rest of Europe is very limited and occasionally it can not supply the desired amount of energy
- The balance between generation and demand is jeopardized, putting in risk the stability of the grid.
Our expert assist utilities:
- Review of existing transmission system
- Load flow studies to assess the overloading elements in the network as per the RES capacity addition plans/scenarios
- Identification of network expansion/augmentation required for evacuation of RES generation under multiple cases for RES capacity addition plans/scenarios
- Identification of reactive power elements required under multiple cases for RES capacity addition plans/scenarios
- Assessment of the operational challenges posed by Different RES technologies- Solar, Wind
- Detailed Analysis of the available technological solutions
- Assessment of Policy/Regulatory and Market Framework in India and abroad
- Assessment of the Ancillary Services Market in India and abroad
- Assessment of forecasting tools and techniques for RES generation
Mercados provides Lender’s Engineer services in Solar, Wind, Small Hydro, waste to energy and biomass power plants to Financial institutes, Banks and multilateral organizations. We are preferred and empaneled Lender’s Engineer with multiple PSU financial institutes to advise them on technical and commercial fronts of the power renewable power plants. We have provided Lender’s Engineer services for over 400MW of Renewable energy plants which includes one of the biggest solar parks in India and biggest waste to energy power plant in India. Our Lender’s Engineer services covers the entire project life cycle from pre-financial closure to post-commissioning performance analysis.
Our scope of services is as follows:
- Pre-financial closure phase (Technical & Commercial due diligence)
- Review of project feasibility
- Review of project design
- Project commercial appraisal
- Review of agreements
- Review of cost-breakup and schedules
- Review of BOM and technical specifications
- Verification of approvals and Clearances
- Implementation phase
- Physical progress monitoring
- Verification of actual cost incurred
- Scrutiny of Test reports
- Periodic site inspections
- Review of draw down requests
- Post commissioning phase
- Review of O&M arrangements
- O&M schedule review
- Comments on Adequacy of spares
- Periodical performance assessments
- Periodical O&M site inspections
- Pre-financial closure phase (Technical & Commercial due diligence)
Techno-commercial Feasibility Study
- Accompany Client team during site selection process
- Analysis of survey report of identified project site (Soil investigation / survey would be conducted by vendors selected by Client and is not inclusive in Mercados Scope)
- Preparation of Detailed Project Report covering financial analysis based on acquired land, achieved bid price and approved EPC quotations/ project cost
Project Monitoring and Assistance in Loan Disbursement
- Regular monitoring of EPC / vendors with respect to timelines given the implications of LDs during development phase
- Review of certificates and data sheets for various equipments being ordered by EPC in order to ensure alignment with contracts
- Selection of suitable dashboards for regular monitoring of plant post Commercial Operation
- Assistance in Disbursement of Loan
- Accompanying Client team in Interactions with State Govt and related bodies for Statutory approvals and Single Window Clearances