Transcript Slide 1

The evolution and current status of
Feed-in Tariffs and Small Power Producer
Regulations in Thailand and Tanzania
REEEP/SERN Regional Workshop on
“Policies for the Massive Diffusion of Renewable Energy Technologies in
Africa - The Design of adapted Feed-in tariff for African countries”
Johannesburg, South Africa
16 November 2010
Chris Greacen
[email protected]
Thailand
Can’t we hook it up and sell power back?
$
$
Technical regulations:
• Allowable voltage,
frequency, THD
variations
• Protective relays
– 1-line diagrams for all
cases:
•
•
•
•
•
Induction
Synchronous
Inverters
Single/multiple
Connecting at different
voltage levels (LV or MV)
• Communication
channels
Commercial regulations:
• Definitions of
renewable energy, and
efficient cogeneration
• Cost allocation
• Principle of
standardized tariff
determination
• Invoicing and payment
arrangements
• Arbitration
+ Standardized Power Purchase Agreement (PPA)
Evolution of Thai VSPP regulations
• 2002
– VSPP regulations drafted, approved by Cabinet
– Up to 1 MW export, renewables only
– Tariffs set at utility’s avoided cost
Reduces air and water pollution
Biogas from
Pig Farms
Produces fertilizer
Produces electricity
8 x 70 kW generator
Ratchaburi
Biogas from Pig
Farms
Micro hydropower
•40 kW
•Mae Kam Pong, Chiang Mai,
Thailand
Korat Waste to Energy – biogas
… an early Thai VSPP project
• Uses waste water from cassava
to make methane
• Produces gas for all factory heat
(30 MW thermal) + 3 MW of
electricity
• 3 x 1 MW gas generators
Evolution of Thai VSPP regulations
• 2002
– VSPP regulations drafted, approved by Cabinet
– Up to 1 MW export, renewables only
– Tariffs set at avoided cost (bulk supply tariff + FT)
• 2006
– Up to 10 MW export, renewables + cogeneration
– Feed-in tariff “adder” (premium payment)
• Paid by ratepayers
– If > 1 MW then utility only pays for 98% of energy (utility
incentive to facilitate VSPPs)
Rice husk-fired power plant
• 9.8 MW
• Roi Et, Thailand
Bangkok Solar 1 MW PV
• Project size: 1 MW
• Uses self-manufactured a-Si
Evolution of Thai VSPP regulations
• 2002
– VSPP regulations drafted, approved by Cabinet
– Up to 1 MW export, renewables only
– Tariffs set at avoided cost (bulk supply tariff + FT)
• 2006
– Up to 10 MW export, renewables + cogeneration
– Feed-in tariff “adder”
– If > 1 MW then utility only pays for 98% of energy
• 2009
– Tariff adder increase, more for projects that offset diesel
http://www.eppo.go.th/power/vspp-eng/ for English version of regulations, and model PPA
Thai VSPP feed-in tariffs
Fuel
Adder
Additional for Additional for Years effective
diesel offsetting 3 southern
areas
provinces
Biomass
Capacity <= 1 MW
$ 0.015
$
0.030
$
0.030
Capacity > 1 MW
$ 0.009
$
0.030
$
0.030
Biogas
<= 1 MW
$ 0.015
$
0.030
$
0.030
> 1 MW
$ 0.009
$
0.030
$
0.030
Waste (community waste, non-hazardous industrial and not organic matter)
Fermentation
Thermal process
Wind
<= 50 kW
> 50 kW
Micro-hydro
50 kW - <200 kW
<50 kW
Solar
7
7
7
7
$ 0.074
$ 0.104
$
$
0.030
0.030
$
$
0.030
0.030
7
7
$ 0.134
$ 0.104
$
$
0.045
0.045
$
$
0.045
0.045
10
10
$ 0.024
$ 0.045
$ 0.238
$
$
$
0.030
0.030
0.045
$
$
$
0.030
0.030
0.045
7
7
10
Assumes exchange rate 1 Thai baht = 0.029762 U.S. dollars
Tariff
=
Biomass tariff =
adder(s) + bulk supply tariff + FT charge
$0.009 + $0.049
+ $0.027
= $0.085/kWh
Generating Capacity supply to Grid
from 2006 - August 2009
การไฟฟ้ าส่ วนภูมภิ าค
PROVINCIAL ELECTRICITY AUTHORITY
MW
(31 August 2009)
Wind
350
Hydro
MSW
300
Solar
Cogeneration
www.pea.co.th
call center 1129
250
Biogas
Biomass
200
รวม
150
100
50
Year
0
2006
การไฟฟ้าส่วนภูมภิ าค
2007
2008
17
2009
VSPP project pipeline as recorded in
EPPO data
Application
under
consideration
Permission
received,
awaiting PPA
PPA signed
Leakage (Project abandoned)
Generating &
selling electricity
Jun 2009
2000
1800
1600
1400
1200
1000
800
Biomass
Solar
Wind
Garbage
600
400
Biogas
200
Coal cogen
Natural gas cogen
0
Application
pending
Received
PPA signed
permission,
awaiting PPA
Microhydro
Generating
electricity
Thailand VSPP Status
Dec 2009
2000
1800
1600
1400
1200
1000
800
Biomass
Solar
Wind
Garbage
600
400
Biogas
200
Coal cogen
Natural gas cogen
0
Application
pending
Received
PPA signed
permission,
awaiting PPA
Microhydro
Generating
electricity
Thailand VSPP Status
Mar 2010
2000
1800
1600
1400
1200
1000
800
Biomass
Solar
Wind
Garbage
600
400
Biogas
200
Coal cogen
Natural gas cogen
0
Application
pending
Received
PPA signed
permission,
awaiting PPA
Microhydro
Generating
electricity
Thailand VSPP Status
July 2010
PPAs signed for
additional 4283 MW
2000
1800
1600
1400
847 MW online
1200
1000
800
Biomass
Solar
Wind
Garbage
600
400
Biogas
200
Coal cogen
Natural gas cogen
0
Application
pending
Received
PPA signed
permission,
awaiting PPA
Microhydro
Generating
electricity
Thailand VSPP Status
Thailand VSPP program features (slide 1 of 2)
Design issue
Options
Low-risk option
Eligibility


All generator types eligible
Eligibility restricted to specific technologies,
sizes, ownership types, etc.
N/A
Interconnection and purchase
requirements




Guaranteed interconnection
Priority interconnection
Guaranteed purchase
Priority dispatch
All, where applicable
Contracts



No contracts
Standard contracts
Contracts negotiated on a case-by-case basis
Standard contracts
Contract length



Short-term (1-7yrs) (1-yr automatic renewal)
Medium-term (8-14yrs)
Long-term (15-20yrs)
Long-term, matched to service life
to extent possible
Rate setting basis


Generation cost-based
Value-based (e.g. avoided costs)
Generation cost based
Payment structure



Fixed price schedule
Premium payment
Spot market gap payment
Fixed price schedule
Tariff differentiation


Differentiated
Undifferentiated
N/A
Source: MCG Research, 2010
Thailand VSPP program features (slide 2 of 2)
Design issue
Options
Low-risk option
Purchasing entity



Utility
Transmission system operator
Government entity
Creditworthy counterparty
Commodities purchased




Electricity
RECs
Emissions credits
Capacity
Commodities bundled and purchased for a
reasonable rate of return
Amount purchased


100% (solar only)
Partial purchase (e.g. only net excess)
100%
Adjusting the payment


Periodic review
Automatic adjustment after set period of
time
Automatic adjustment triggered by
capacity
Adjustment based on prior market
performance
Transparent, scheduled, and clearly defined
adjustment mechanism
No Cap
Cap on capacity
Cap on generation
Cap on ratepayer impact
No cap preferable. If cap in place, it should
be transparent, clearly defined, and stable,
with clear queuing procedures


Caps and queuing




Source: MCG Research, 2010
Tanzania
Evolution of Tanzania SPP
regulations
• Approved by regulator August 2009
• Up to 10 MW export, renewables & cogeneration
• SPP Tariffs at average of long run marginal costs (LRMC) and
short run (SRMC)
• Grid-connected SPP tariff (2010): 110.3 TZS ($0.074)/kWh
– 132.36 TZS ($0.088)/kWh dry-season Aug-Nov
– 99.27 TZS ($0.0663)/kWh wet-season Jan-Jul, December
• In rural mini-grid areas offsetting diesel (2010): 368.87 TZS
($0.246)/kWh
• 4 PPAs signed by November 2010
www.ewura.go.tz/sppselectricity.html for English versions of regulations, and model PPAs
Pilot Sisal Biogas Plant 150 kW–
HALE -TANGA - TANZANIA
Processing of Sisal Leaves
Fibre
4%
Sisal
waste
96%
Production of 1 ton of dry fibre generates about
24 tons of sisal waste
Tanzania SPP program features (slide 1 of 2)
Design issue
Options
Low-risk option
Eligibility


All generator types eligible
Eligibility restricted to specific technologies,
sizes, ownership types, etc.
N/A
Interconnection and purchase
requirements




Guaranteed interconnection
Priority interconnection
Guaranteed purchase
Priority dispatch
All, where applicable
Contracts



No contracts
Standard contracts
Contracts negotiated on a case-by-case basis
Standard contracts
Contract length



Short-term (1-7yrs) (1-yr automatic renewal)
Medium-term (8-14yrs)
Long-term (15-20yrs)
Long-term, matched to service life
to extent possible
Rate setting basis


Generation cost-based
Value-based (e.g. avoided costs)
Generation cost based
Payment structure



Fixed price schedule
Premium payment
Spot market gap payment
Fixed price schedule
Tariff differentiation


Differentiated
Undifferentiated
N/A
Source: MCG Research, 2010
Tanzania SPP program features (slide 2 of 2)
Design issue
Options
Low-risk option
Purchasing entity



Utility
Transmission system operator
Government entity
Creditworthy counterparty
Commodities purchased




Electricity
RECs
Emissions credits
Capacity
Commodities bundled and purchased for a
reasonable rate of return
Amount purchased


100%
Partial purchase (e.g. only net excess)
100%
Adjusting the payment


Periodic review
Automatic adjustment after set period of
time
Automatic adjustment triggered by
capacity
Adjustment based on prior market
performance
Transparent, scheduled, and clearly defined
adjustment mechanism
No Cap
Cap on capacity
Cap on generation
Cap on ratepayer impact
No cap preferable. If cap in place, it should
be transparent, clearly defined, and stable,
with clear queuing procedures


Caps and queuing




Source: MCG Research, 2010
South-south policy/technology transfer:
Technical Visit of the Delegation
from the United Republic of Tanzania to Thailand
regarding
Thailand’s Very Small Power Producer (VSPP) program
13-20 March 2010
LESSONS FROM THAI VSPP & TANZANIAN SPP
• Thailand’s path to full generation-cost FIT started successfully
with tariffs based on avoided cost starting in 2002…
• Initial trickle of applications gave utility time to build capacity to
implement program through comfortable ‘learning by doing’ approach
• ... added FIT in 2006 very successful in attracting
projects
• Incentivize utility
• Tanzania’s regulations are just recently approved, but first
PPAs already signed
• Peer-to-peer exchange
• Build mid-level relationships across bureaucracies
• Utility folks like to listen to other utility folks
Thank you
[email protected]
This presentation available at:
www.palangthai.org/docs
VSPP regulations available at:
http://www.eppo.go.th/power/vspp-eng/
And
www.ewura.go.tz/sppselectricity.html
Table of Tanzania SPP documents
Main grid
Process Guidelines
(roadmap)
Process rules
Interconnection
Guidelines
Interconnection
rules
Mini-grid
Guidelines for Developers of Small Power Projects (SPP) in Tanzania
In draft form, under consultation
Guidelines for Grid Interconnection of Small Power Projects in Tanzania (Parts A, B, C)
(under consultation)
In draft form, under consultation
Standardized PPA
 Standardized Power Purchase
Agreement for Purchase of Grid-Connected
Capacity and Associated Electric Energy
Between Buyer and a Small Power Project
 Standardized Power Purchase
Agreement for Purchase of Off-Grid
Capacity and Associated Electric Energy
Between Buyer and a Small Power Project
Tariff methodology
 Standardized Tariff Methodology for the
sale of Electricity to the Main Grid in
Tanzania Under the Standardized Small
Power Purchase Agreements.
Standardized Tariff Methodology for the
Sale of Electricity to the Mini-grids Under
the Standardized Small Power Purchase
Agreements
Tariff calculations
for year 2009
Detailed Tariff Calculations under the
SPPA for the Main Grid for year 2009
Detailed Tariff Calculations under the
SPPA for the Mini-grids for year 2009
 = “Approved”. Approved and proposed SPP documents will be made available at: www.ewura.go.tz/sppselectricity.html
40
Tariffs determined by SPP type
Connected to
main grid
Connected to
isolated mini-grid
Selling wholesale
(to TANESCO)
Case 1
Case 2
Selling retail
(directly to final
customers)
Case 3
Case 4
* DNO: Distribution Network Operator (currently TANESCO)
41
Tariff Case 1: selling wholesale to main grid
Clrmc  Csrmc
Ccase1 
2
Where Clrmc is the long run marginal cost as defined by Tanesco’s long-term power plan; and Csrmc is
the budgeted cost of thermal generation in the next year.
Note: the actual calculations are somewhat more complicated, taking into account:
• Transmission losses
• Seasonality
•Price floor & cap
They are available in: Standardized Tariff Methodology Under the Standardized Small Power
Purchase Agreements available from EWURA. Order 08-015 on Dec 30.2008
Tariff – case 1 (2010)
Tariff (TZS/kWh)
Tariff (US$/kWh)
Annual Average
110.3
$0.074
Dry season (Aug – Nov)
102.58
$0.088
Wet season (Jan-Jul and Dec)
75.94
$0.0663
42
Tariff Case 2: selling wholesale to a minigrid
CLmrcGrid  C AveMini
Ccase 2 
2
Mini-grid SPP receives the average of Tanesco’s main grid and mini-grid avoided costs.
CLmrcGrid = long run marginal cost for grid-power (adjusted for losses)
CAveMini = average incremental cost of mini-grid power (levelized cost of electricity from
a new mini-grid diesel generator).
Tariff – case 2 (2009)
Tariff (TZS/kWh)
Tariff (US$/kWh)
Tariff (no seasonal variations)
368.87
$0.246
43
Tariff Cases 3 (isolated) and 4 (main grid):
selling at retail to end use customers
• Tariff is proposed by SPP generator, subject to
EWURA review
– Less oversight demanded in cases in which
community is in agreement with proposed tariff
– Where possible, EWURA draws on financial
analysis submitted to REA for rural electrification
subsidy
44
Who have involved in PEA ?
การไฟฟ้ าส่ วนภูมภิ าค
PROVINCIAL ELECTRICITY AUTHORITY
System
Operation Div.
Research Div.
•First synch. test
•PQ test
•Identify circuit connection
•Control & Operation
•Communication
Relay Div.
call center 1129
•Switchgear &
Relay test
Meter Div.
DG office
• Technical & System Analysis
• Document
• Coordinator
•Meter installation
Area Office 1-12
& Local Office
•Line connecting construction
•Meter reading
Legal Div.
www.pea.co.th
•PPA check
Tariff Div.
•Billing
Finance Dep.
•Settlement
การไฟฟ้าส่วนภูมภิ าค
System Operation Area
Office 1-12
45