The primary business of KPI Global is generating and selling electricity from own solar power projects as IPP under the brand ‘Solarism’. The Company had initially commissioned and started commercial production of solar power project of 5MW capacity and subsequently, the Company has successfully commissioned another 10MW capacity at Sudi & Tanchha village, Amod Tehsil, Bharuch District, Gujarat (Solarism Plant). Accordingly, by end of March, 2019 the Company has successfully commissioned 15MW capacity in Phase-1 under this vertical and started getting revenue from the same.
The Company has established a ~13.25 km long 66 KV transmission line from Solarism Plant to GETCO’s Amod Substation, using towers which are suitable for double circuit of ‘panther’ conductors enabling transmission upto 100 MW capacity of power. Further, the Company has already signed the connectivity agreement and O&M Agreement with GETCO for 66 KV Transmission Line for 25 years.
The Company has entered into bilateral PPA’s for a period of ranging from 3 to 20 years with reputed industrial consumers located in Gujarat for direct sale of the solar power generated at Solarism Plant. The rate of PPAs is an average of around 7% discount to the prevailing per unit price of the power rates of the DISCOMs, less other adjustments. This results in not only reducing their overall power cost but also enables our PPA customers, who are Obligated Entities, for meeting their respective RPO obligations.
Captive Power Producers (CPP’s) are those entities who install a power project for their own consumption. The units generated from such projects are directly credited to the CPP’s bill and subtracted from the units supplied by DISCOM, proving to be economically more viable and prudent source of power. According to Gujarat Solar Power Policy 2015, any electricity consumer can install its own solar power plant for its captive use.
The Company has another unique vertical of developing and selling solar power plants to CPP customers. Under this vertical, CPP customers will benefit by generating power for their captive use, thereby reducing their overall power cost and would also enable our CPP customers, who are Obligated Entities, for meeting their respective RPOs. The Company under this vertical either sells or leases, part of the solar power project land at Solarism Plant, for the solar power plant of CPP customers, and develop the solar power project on behalf of the customers, by entering into a turnkey agreement for supplying the developed solar power project. This enables the CPP customers to not only use a common pool of grid connected land to generate solar power, but also provide the ready-made infrastructure to evacuate power, using our transmission line from Solarism Plant to the Amod Substation.
The Company collects charges from the customers for leasing the solar power project land as well as for operation and maintenance services. Under the CPP model, the Company receives income from sales at the time of selling the developed power plant to CPP customers as well as receives an annuity for operations, maintenance and land lease rental.
In the initial years of the business operations, the Company was engaged in the sale of land parcels to third parties, which were leased back for foraying into solar power generation for a period of 25 years by entering into a lease agreement. Accordingly, the company is paying fixed lease rental to the land owners as per the lease agreement. The Company had established initial solar power plant of 5 MW on the plots of leased land. Since the initial needs have already been fulfilled, the Company has stopped this business.