Transcript Outline - Palang Thai: Palang Thai

Practical Policies for
Decentralized Electricity
Generation
Chris Greacen
Palang Thai
MEE-Net Workshop
18 January 2012
Bangkok
Outline
• What is decentralized electricity?
• Centralized vs. decentralized
• Practical policies for decentralized electricity
What is decentralized
electricity?
• Decentralized electricity: generating electricity
from many small, local energy sources
– High efficiency cogeneration (CHP)
– On-site renewable energy
– On-site power
• Centralized electricity: large power plants
generally located far from loads
–
–
–
–
Coal
Nuclear
Large hydropower
Natural gas (CCGT)
Decentralized Technologies
Computing:
Internet vs. Mainframes
Telecommunications:
Cell phones vs. land lines
Broadcasting:
Television
Radio
Eg. You Tube
Eg. Podcasts
Electricity:
Decentralized energy
technologies
4
The Move to Decentralized Technology
vs.
vs.
5
Old way
Power plant
New way
Power plant
Biomass
Wind power
Biomass
Customers
Energy efficient end-use
Solar
Cost and size of thermal power plants from 1930 to 1990
• Initial cost declines through increasing scale.
• 1990s through mass production of smaller turbines
Source: Hunt, Sally and Shuttleworth, Graham. Competition and Choice in Electricity. (England, John
Wiley & Sons, 1996).
Decentralized generation brings down costs
Ireland – retail costs for new capacity to 2021
8 .0 0
7 .0 0
Euro Ce nts / KW h
6 .0 0
5 .0 0
4 .0 0
3 .0 0
2 .0 0
1 .0 0
0 .0 0
1 0 0 % C e n t ra l / 0 % D E
75%
/ 25%
50% / 50%
25% / 75%
0 % C e n t ra l / 1 0 0 % D E
% DE of Tota l Ge ne r a tion
O & M o f N e w C a p a c ity
Fuel
C a p ita l Am o riz a tio n + P ro fit O n N e w C a p a c ity
T & D Am o riz a tio n o n N e w T & D
Worldwide energy waste
Electricity Generation Worldwide (TWh)
(Source: International Energy Agency 2002)
Cogeneration (Combined Heat and Power – CHP)
CHP cools Bangkok’s airport
Suvarnabhumi International Airport in Bangkok cooled by district cooling system
powered by a CHP that also generates 52.5MW of electricity.
14 MW cogeneration at University of
Massachusetts, Amherst, USA
75% efficient. Provides heating for 200 buildings
DE Benefits – Energy Access
Denmark – a transition to decentralized energy
Source: Danish Energy Center
16
Decentralized electricity policies and outcomes -- Thailand
Practical policies to support
distributed electricity
•
•
•
•
Access to grid
Feed-in tariffs
Low cost financing
Tax incentives
Thailand’s SPP+VSPP
Access to
grid
$
Access to
grid
$
Technical regulations:
• Allowable voltage,
frequency, THD
variations
• Protective relays
• Communication
channels
Commercial regulations:
• Definitions of
renewable energy, and
efficient cogeneration
• Cost allocation
• Standardized tariff
determination
• Invoicing and payment
arrangements
• Arbitration
+ Standardized Power Purchase Agreement (PPA)
Access to
grid
Small Power Producer (SPP) regulations:
• Started 1992
• Fossil-fuel cogeneration and renewable energy
up to 90 MW (export to grid)
• Low tariff offered for “non-firm” generators
made it difficult for most renewables.
Bangkok Cogen, Rayong, 115 MW
Laem Chabang, Chonburi 100 MW
4494 MW online + 4152 MW with signed PPAs... 75% fossil fuel
Map Ta Phut Olefins, Rayong, 70 MW
Pluak Daeng, Rayong 70 MW
Access to
grid
Feed-in
tariffs
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
• 2006
– Up to 10 MW export, renewables + cogeneration
– Feed-in tariff “adder”
• 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
Feed-in
tariffs
EPPO
24
Feed-in
tariffs
Feed-in tariff policies worldwide
Low cost
financing
Revolving Fund
• Thai Government loans funds at 0% interest to commercial banks for
investment in:
• Energy efficiency improvement projects
• Renewable energy development and utilization projects
11 local financial institutions have participated.
Max loan amount: 50 MB
Max. interest rate: 4%
Max. loan period: 7 years
January 2003 – present
7000 M Baht
Low cost
financing
ESCO Fund
A source of venture capital for ESCOs to jointly invest with private operators in energy
efficiency & renewable energy projects. The program targets SMEs & small projects.
Energy Conservation Promotion Fund
Investor
ESCO Fund
Investment Committee
Investor
Investor
Investor
Fund Manager
ESCO Venture Capital
Equity Investment
Equipment Leasing
Carbon Market
Technical Assistance
Credit Guarantee Facility
27
Tax
incentives
Tax Incentives
Thailand’s Board of Investment (BOI)’s tax incentives for
renewable energy projects:
• Corporate income tax holidays up to 8 yrs. Additional 50%
reductions of corporate income tax for 5 yrs
• Import duty reductions or exemptions on equipment and raw
materials
28
Bangkok Solar 1 MW PV
•
Signed PPAs for 767 MW of PV (SPP + VSPP)
Lopburi 73 MW PV (over 1,000 rai = 160 hectares)
• Project size: 1 MW
• Uses self-manufactured a-Si
• Signed PPAs for 767 MW of PV (SPP + VSPP)
Solar thermal electricity
• 5 MW, 135 MW planned
• 900 Million baht (180 baht/watt) but costs expected to
decrease 20 to 30% to 135 baht/watt
• Commissioned in Kanchanburi on Nov 2011
• Signed PPAs for 1343 MW of solar thermal
Reduces air and water pollution
Biogas from
Pig Farms
Produces fertilizer
Produces electricity
8 x 70 kW generator
Ratchaburi
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
Rice husk-fired power plant
• 9.8 MW
• Roi Et, Thailand
Feb 2007
2000
1800
1600
1400
1200
1000
Biomass
Solar
Wind
800
600
Garbage
400
Biogas
200
Coal cogen
Natural gas cogen
0
Application
pending
Received
permission, PPA signed
awaiting PPA
Microhydro
Generating
electricity
Thailand VSPP Status
18 MW online
June 2008
2000
1800
1600
1400
1200
1000
Biomass
Solar
Wind
800
600
Garbage
400
Biogas
200
Coal cogen
Natural gas cogen
0
Application
pending
Received
permission, PPA signed
awaiting PPA
Microhydro
Generating
electricity
Thailand VSPP Status
June 2009
2000
1800
1600
1400
1200
1000
Biomass
Solar
Wind
800
600
Garbage
400
Biogas
200
Coal cogen
Natural gas cogen
0
Application
pending
Received
permission, PPA signed
awaiting PPA
Microhydro
Generating
electricity
Thailand VSPP Status
Mar 2010
2000
1800
1600
1400
1200
1000
Biomass
Solar
Wind
800
600
Garbage
400
Biogas
200
Coal cogen
Natural gas cogen
0
Application
pending
Received
permission, PPA signed
awaiting PPA
Microhydro
Generating
electricity
Thailand VSPP Status
Sep 2011
2000
1800
1600
1400
1200
1000
Biomass
Solar
Wind
800
600
Garbage
400
Biogas
200
Coal cogen
Natural gas cogen
0
Application
pending
Received
permission, PPA signed
awaiting PPA
Microhydro
Generating
electricity
Thailand VSPP Status
1056 MW online
(58-fold increase since 2007)
PPAs signed for
additional 4318 MW
Solar trends in Thailand
MW Solar installed in Thailand Feb 2007 – Dec 2011
160
140
120
100
80
60
40
20
0
PPAs for photovoltaic (PV) solar: 677 MW
PPAs for concentrating solar thermal (CST): 1343 MW
Policies to encourage decentralized
mini-grid electricity in rural areas
• Allow off-grid generators to
pick their own retail tariff
(subject to transparent
regulatory approval)
– Simple 1-page spreadsheet for
regulators to do this:
http://tinyurl.com/SPPevaluator
(developed by World Bank for
use in Africa)
Policies to encourage decentralized
electricity in off-grid areas
• Lower investment risk to mini-grid
generator operators in event that
“big grid reaches mini-grid” by:
– Allowing formerly off-grid
generators to sell back to the grid;
and/or
– Allowing mini-grid operators to
purchase wholesale electricity for
resale to retail customers.
Summary
•
•
•
•
•
Access to grid
Feed-in tariffs
Low cost financing
Tax incentives
Remote mini-grids:
– Flexibility in retail tariff setting
– Reduce investment risk by working out details
of what happens when “big grid” reaches
mini-grid
For more information, please contact [email protected]
This presentation available at:
www.palangthai.org/docs