Journey So Far

The relationships with critical stakeholders such as communities, contractors, suppliers, regulators, customers have a profound impact on Greenko’s business. Greenko, as a responsible business, understands this and utilizes multi-faceted stakeholder relationships to form the basis for strong partnerships which aid the group in creating value and sharing value.

Greenko’s partnership with communities, contractors, and suppliers enable it to complete projects within stipulated deadlines, manage assets efficiently and create positive community impacts. Further, the transition from GKO 3.0 to 4.0 requires Greenko to develop new partnerships, engagement models and also transform fully to the digital mode. The transition to 4.0 warrants that the leadership at Greenko must envision the energy assets to be decentralized. These energy assets are efficient, effective in leveraging the society and nature. Transformation GKO 3.0 and 4.0 means a digitally enabled, socially entrenched and environmentally regenerative business. Greenko believes, delivering multiple values to the economy, society, and environment through the regenerative and circular model will deliver sustained returns to its stakeholders.

Greenko works to increasingly engage its Stakeholders in all the company’s activities and operations. Throughout the value chain, Greenko interacts with thousands of people and organizations that are critical to its social and relationship capital, a fundamental element for the sustainable performance of the company. Greenko has made advances with measures such as International competitive bidding, smart contracts, going 100% paperless and implementation of Automation Process in SAP. It also conducts reviews through MS Teams meetings to share and deliver value to all stakeholders.

Greenko’s C&P transformation

C&P transformation is a radical effort to change, rethink, reinvent and reposition C&P role in the organization.

Greenko has been one of the few organizations that has successfully managed to bring in the concept of circularity into the business model. As we begin to provide secure and sustainable energy solutions on a global scale, we coordinate seamlessly with our stakeholders to rejuvenate our business environment.

Strategic Alliances¹

Greenko strives to build partnerships with suppliers, contractors, regulators, and customers based on trust and shared values that are essential for working cohesively and effectively over the long term to deliver affordable, reliable, and clean power.

Greenko aims to stimulate technology cooperation to enhance the development of alliances, and to assist developing partners, consistent with their respective capabilities and national circumstances and priorities. Greenko enters into partnerships with suppliers and contractors after diligent screening and performance evaluation based on Quality, Delivery, Quantity, EHS compliance, and statutory compliance. It helps the organization’s businesses to access capital, technology, and operational advice to become more profitable and sustainable, with an aim of expanding clean energy markets and improving livelihoods to accelerate economic growth. Selected contractors are also given Health & Safety and skill development training. In the reporting period, 13 safety awareness campaigns were conducted for contractors.

Greenko passionately believes that Vendors are the co-authors of their success story. The group believes in trust and enduring partnerships to endorse the high quality and value of the asset being constructed. A pre-qualification exercise is carried out for onboarding vendors, which ensures vendor credentials and capability to execute assignments; adherence to health, safety, and environmental norms; and compliance with statutory requirements, including human rights. The performance of the vendors is evaluated at regular intervals in a transparent manner & it provides timely feedback for their improvement and development.

Greenko continues to forge strong bonds with contractors/suppliers such as Siemens Gamesa, Risen, Huawei, TATA Power Solar, Toshiba, and ABB. The group has also entered into strategic partnerships with MP Solar Project and Tata Power Solar in 2018-19. Greenko has entered into long term agreements with suppliers for WTGs, Modules, Conductors, Insulators, and SCADA. The group has also collaborated with Tata Consulting Engineers in collaboration with EDF, France for the Pinnapuram PSP project as a review consultant, wherein Megha Engineering has been chosen as a local vendor for civil works, hydro-mechanical works and Andritz Hydro has been roped in for design, supply, erection, testing & commissioning of the electro-mechanical package. The Group has established social partnerships with various Gram panchayats and local communities to effectively carry out its community development programs. Additionally, Arcadis remains the Group’s ESIA partner and R.S Envirolinks Technologies is its EIA partner. Other strategic partners of the Group are CII-GBC, National Safety Council, ASSOCHAM, Data Security Council of India, National Solar Energy Federation of India.

Responsible Contracts

The project management process at Greenko is unique in many ways. The IRESP or Smart Contracts are categorized into two high-value packages - Electromechanical and civil/hydromechanical. Also, the contract agreement on the lines of IRESP / smart contract principles are based on two aspects, design consultants for civil and hydromechanical aspects & consultants for reviewing the designs from owners’ perspectives. This good practice in procurement also takes care of the requirements of the World Bank and Funding agencies.

The project begins with an International Competitive Bidding process (ICB), and provides an opportunity for global players in the bidding process and helps Greenko in shortlisting the most suitable and apt candidate for critical projects.

At the ICB, the terms and conditions pertaining to risks are clearly highlighted by Greenko, so that the vendor is well aware of the probable risks and their mitigation before the contract is materialized – in line with the terms of its IRESP principles.

All IFC guidelines are followed for the tendering process. Before the tenders are passed, transparent technical discussions take place. This leads to understanding the risks, mitigation measures and residual risk beforehand.

Greenko’s smart contracting evaluates the offers based on the asset life cycle and in case of any design/technical failure, penalties are levied on the supplier/vendor based on physical efficiency tests.

KPIs FY 2020-21

• Supplier development programs
  
  Capital Equipment wise (WTGs, PV Modules, Inverters, Hydro Turbines, Transformers, Conductors etc.,) Vendor development done by visiting vendor manufacturing facilities, through web meetings, Product Evaluation, Exhibitions and Magazines.
• Amount spent on CAPEX
  
  Rs 111.12 Crore CAPEX
• Amount spent on OPEX
  
  Rs 18.64 Crore CAPEX

Smart Procurement

Greenko instituted Smart Procurement initiative for self-reliant sourcing of spare parts without compromising the 5Rs of Right Source, Right Price, Right Material, Right Quantity, and Right Time. The various steps followed for Smart Procurement is listed in the infographic. A special team is formed and assigned a task to visit different sites to ease the execution of Smart Procurement. The team is assigned a task to identify the part codes of the components. The technical data sheets of identified components were collected from different vendors and web channels. These exercises helped Greenko’s in-house team to decode and comprehend the specification and other technical details of spares. Through this initiative, the Greenko team was able to identify alternative products in the market with similar specifications. The key benefits of this initiative are Improvement in technical know-how on Spares and Services, Reduced dependency on selective vendors, Better Lead Time of the Spares, Cost Savings.

Sustainable Partnerships

Greenko has established a turbine procurement strategy for establishing framework agreements and developing strong relationships with leading turbine suppliers for securing turbine requirements as the Cost of turbine constitutes a significant proportion of hydropower and wind energy project costs. Turbine suppliers are limited and the demand for turbines outstrip the manufacturing capacity, hence establishing such framework agreements go a long way in smooth execution of contracts and procurement related to turbines. To date, the company has purchased hydro turbines for high-head hydropower projects from Alstom, hydro turbines for low head projects from BFL Turbines, and wind turbines from GE Energy, Gamesa, ReGen Powertech, and Suzlon.

Operating equipment for solar energy projects primarily consist of solar panels, inverters, cables, solar mounting structures, trackers, and the evacuation system. Greenko purchases major components such as solar panels and inverters directly from multiple manufacturers. There are several suppliers in the market and those suppliers are selected based on expected cost, reliability, warranty coverage, ease of installation, and other ancillary costs. Greenko’s primary solar panel suppliers are Trina Solar, Chint Solar, and Risen. Greenko also sources solar inverters from SMA Solar.

In about 25% instances, Greenko has incorporated supplier suggestions in incorporating the circularity in decision making. In the reporting period, Greenko entered MoU with Tata Power Solar for setting up 180 MW Solar Power Generation system at Shivpuri, Madhya Pradesh. It also entered long term contracts with ONYX Insight to modernize 500 wind turbines.

Greenko had sought ONYX Insight technology to enhance the quality of data from the wind turbine drivetrain to enable the adoption of latest predictive analytics. Greenko is looking forward to adopting machine learning

in addition to predictive maintenance. Greenko has managed to retain 80% suppliers in the reporting period and conducted 10 events conducted in 2019-2020 & and also 2020-2021, to discuss the roadmap for the next 5 years, again emphasizing the circular approach in Greenko’s supply chain management. Greenko also received the One, Sliver Award for green procurement practices for one of the group companies in 2019-20.

Transmission and Interconnection

The availability of transmission infrastructure and access to a power grid or network is critical to a project’s feasibility. The relationship and continuous engagement with the transmission utility authorities ensures timely access to transmission infrastructure. Greenko discusses availability with the relevant state utilities and files an application with the relevant authorities to interconnect with the network. Power from wind and solar farms is typically evacuated to the relevant grids through high voltage transmission lines from dedicated pooling stations that result in stable energy transmission and it minimizes electricity grid stability issues.

Customer Stewardship

Greenko values its customers and makes continuous efforts to meet their expectations. Customers of Greenko include stateowned and privately-owned distribution companies, industrial and commercial bulk users of electricity. The distribution utilities who are customers of Greenko often face challenges due to the inherent non-firm nature of renewable energy supplies. Greenko understands these challenges and works in cooperation with them to address and provide electricity on demand by forecasting the schedule to the extent feasible. The performance record of Greenko in providing the power as per schedule is demonstrated by low penal charges. The industrial and commercial bulk users face challenges from

Customer Profile

90%

Public Utilities

8%

Private Customer base

2%

Exchange sale Based on
the PPA capacity

KPI’s FY 2020-21

• 95% Contractors Satisfaction Level
• 80% Suppliers Satisfaction Level
• Internal customer satisfaction index- 4.5 on 5 scale
• 9.5 for Utility Customers
• 10 for open access clients

the transmission and distribution utilities and due to frequent changes in regulator determined charges for wheeling, banking, etc. In such situations, Greenko works with the regulator and utilities to provide an uninterrupted and reliable power supply to industrial and commercial customers. Greenko also sells power on the energy exchanges and interact with both the operating exchanges in India to make the trade more effective and rewarding to the involved parties.

Public Policy Advocacy

While the impacts of climate change on business are hard to gauge, Greenko’s assets are designed for sustenance in a dynamic geo-political environment. It becomes imperative for Greenko to contribute significantly in matters of public policy formulation in the light of diversified energy sources and the quest for energy independence

We are marching towards a Net- Zero economy and Greenko will play a significant role as a global player. At Greenko the commercial management is implemented via robust financial strategies, systems and processes aligning with the organizational vision and objectives, as also regulatory frameworks. The risks are managed by identifying potential threats early on to ensure smooth functioning

It is encouraging to see that governments across the globe are orienting themselves for a net-zero carbon future. The scenario over the past few years has transformed rapidly and continues to grow at a pace faster than ever before with technological interventions. On the back of a strong resolve from management and strategic planning, Greenko is working constructively for policy advocacy with regulatory authorities for an energy-independent future

At Greenko, 600+ professional hours are spent by senior management in suggesting the regulators and policymakers tariff policies, proposed Electricity Act Amendment, etc. The officials at Greenko are constantly engaged in providing constructive feedback regarding government policies & regulations, highlighting the urgent need for storage policy/ mission as also Hydro policy for India.

The efforts are bearing fruit and are visible from hybrid tenders by SECI & proposal for introducing hydro purchase obligation is also on the fast track. Also, the senior management is putting continuous efforts in bringing awareness and importance of Schedulable power (RE on demand) to push RE into replacing conventional fossil power. Greenko has indeed come a long way from making strategic alliances, developing contractors, earning stakeholders based on trust and shared vision of supplying clean and affordable power to participating actively in regulatory affairs and advocating the Decentralization of RE. The Group has made significant contributions to CERC for significant policy formulation.

Greenko’s efforts in policy Making/Regulations are summarized below

For Connectivity Regulations:

• Consideration of Renewable generation asset + Storage as an eligible entity for applying for connectivity to the ISTS network

For Tariff Determination:

• Inclusion of ‘Renewable hybrid energy project’ and ‘Renewable energy with storage project’ as eligible Renewable generation asset.
• Inclusion of operational norms for ‘RE + Storage’ projects to be considered for determination of tariff
• Inclusion of definition of ‘Storage including pumped storage project for integration with RE generation asset to be considered as RE project

For Inter-State Transmission (charges & Losses) Regulations

• Rationalization of Transmission charges based on the utilization of the transmission asset by the user

Draft Report on Optimal Generation Capacity Mix for 2029-30 by CEA

• Inclusion of ‘Pumped storage projects’ as key energy storage asset for emerging energy shifting requirement with the increase in Renewable generation proportion

Contribution to Regulatory Policy Matters

Stakeholder Trust

We are in the midst of a significant transformation with respect to the energy scenario. This trend is bringing about major changes to our markets and business structures which is encouraging us to capture the untapped potential of the energy market by delivering long-term value via new energy solutions. It is now more important to review our business strategy from a sustainability point of view to combat the effects of climate change

ESG has always been the core critical to demonstrating long-term value creation. of the projects we develop and operate. On the ‘social’ side, we feel there is much more that needs to be done in areas such as access to healthcare infrastructure and rural development