Transcript Guidelines for Developers of Grid

Guidelines for Developers of
Small Power Projects (SPP) in
Tanzania
Main features of a
draft for discussion
25 Feb 2009
Chris Greacen
[email protected]
1
Prepared with financial assistance from ESMAP
Outline
• Small Power Producer (SPP) international
examples
• Tanzania SPP program
– Objectives
– Table of SPP documents
• “Guidelines for Developers of
Small Power Projects (SPP) in Tanzania”
– Tariffs for different SPP cases
• Main grid, mini grid, wholesale and retail sales
(discussion, lunch)
– Required permissions and approvals, procedures for
application; process rules
2
Small
hydropower
• 1 MW
• Mae Ya, Thailand
3
Small
hydropower
• 2 MW
• “Eco Power”
• Sri Lanka
4
Micro hydropower
•40 kW
•Mae Kam Pong, Chiang Mai,
Thailand
Rice husk-fired power plant
• 9.8 MW
• Roi Et, Thailand
Biomass (wood chips)
• 1 MW
• Landhanavi, Sri Lanka
• Wood is grown specifically for electricity
production
7
Biogas from Pig Farms
•8 x 70 kW generator
•Ratchaburi, Thailand
Windfarm
• Each wind turbine is 1.5 MW
• Texas, USA
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Solar Photovoltaic (PV)
• 1 MW
• Bangkok Solar, Thailand
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SPP program objectives
• Facilitate development and
interconnection of SPP projects
• Light-handed regulation
1. Minimize amount of information that is
required.
2. Minimize the number of separate regulatory
requirements and decisions.
3. Use standardized documents, or perhaps
documents used by other agencies, to the
maximum extent possible (reduce need for
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case-by-case negotiation)
Definitions
• DNO: the licensee responsible for the operation
of a distribution network in Tanzania. (Currently
Tanesco)
• SPP: a power plant using a renewable energy
source or waste heat, or cogeneration of heat
and electricity, with an export capacity of up to
ten (10) MW
• Embedded Generator: a single generator or a
group of generating plant of total export capacity
between 100 kW and 10 MW, connected to a
Distribution Network in Tanzania, at 33 kV or
13
below.
Table of SPP documents
Main grid
Process
Guidelines
(roadmap)
Process rules
Mini-grid
Guidelines for Developers of Small Power Projects (SPP) in Tanzania (under
consultation)
(Not yet named)
Interconnection
Guidelines
Guidelines for Grid Interconnection of Small Power Projects in Tanzania (Parts
A, B, C) (under consultation)
Interconnection
rules
(Not yet named)
Standardized
PPA
 Standardized Power Purchase
Agreement for Purchase of GridConnected 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
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Approved and proposed SPP documents will be made available at: www.ewura.go.tz/sppselectricity.html
What are the Guidelines for Developers of
Small Power Projects in Tanzania?
• Audiences: SPP developers, EWURA,
Tanesco, bankers…
• Purpose: Guide to steps necessary to acquire
necessary permits and clearances to develop
and operate a SPP
– Selling electricity to the DNO (Tanesco) main grid
– Selling to an isolated mini-grid and/or
– Selling directly to retail customers (main gridconnected & isolated SPPs)
• Guidelines: roadmap to rules. There will be a
separate ‘rules’ document.
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Contents of Guidelines for Developers of Small
Power Projects in Tanzania
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Tariff determined by SPP type
Connected to main Connected to
grid
isolated mini-grid
Selling wholesale
(to DNO*)
Case 1
Case 2
Selling retail
(directly to final
customers)
Case 3
Case 4
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* DNO: Distribution Network Operator (currently TANESCO)
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
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Tariff Case 2: selling to
wholesale to a mini-grid
Ccase 2
CLmrcGrid  C AveMini

2
Where CLmrcGrid is the long run marginal cost for grid-power (adjusted for
losses), and CAveMini is the average incremental cost of mini-grid power
(calculated as the levelized cost of electricity from a new mini-grid diesel
generator).
Note: the actual calculations are somewhat more complicated than this – and
available in: Standardized Tariff Methodology for the Sale of Electricity to the
Mini-grids Under the Standardized Small Power Purchase Agreements
available from EWURA.
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Tariff Cases 3 and 4: 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
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Necessary permits, clearances and
procedures for application
Land title or lease
Resource Rights (e.g. water rights from River Basin Water Office)
Letter of Intent (LOI) with DNO (Tanesco)
Business license, tax registration, etc.
Building Permit
Sequence is
important to
avoid
competing
claims on
project sites
Environmental and Social Clearance (NEMC)
SPPA
EWURA license
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Necessary permits and clearances
and process for application
• For each permit…
– Description
– Project types exempt
– Issuing authority and application
procedure
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Land title or lease
Resource Rights (e.g.
water rights from River Basin Water Office)
LOI with DNO (Tanesco)
LOI request
Business license, tax registration, etc.
Building Permit
Environmental and Social Clearance (NEMC)
PPA
EWURA license
1.
2.
3.
4.
Name and Address
Locations
Fuel type (hydro, biomass, wind, gas, etc.)
Power capacity (MW), planned power export
(MW), annual energy generation (GWh).
5. Copy of deed of title or lease agreement
6. Rights to resource
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Proposed rules regarding LOI process #1
• Acknowledgement of receipt: The rules require that within seven
days of receiving the LOI request, the DNO will acknowledge receipt
of the request.
• Notice of decision: Within 30 days of receiving the complete LOI
request, the DNO will send the project developer notice of its
decision. Approval for the project will be in the form of a Letter of
Intent (LOI).
– A template is shown in Appendix 2: Template for Letter of Intent.
•
Reasons for disapproval by DNO stated: If DNO disapproves of
the project, the reasons for disapproval must be clearly stated in
writing.
• Site Reference Number: The LOI shall include a Site Reference
Number designated by the DNO.
– The Site Reference Number will be used to refer to the Site in all subsequent
documentation and correspondence
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Proposed rules regarding LOI process #2
• Reservation of Network Capacity: The LOI in the case of sites
operating on hydroelectric or wind power, or any other primary
source of energy which is site-specific by way of its availability, will
also imply the exclusivity of the interconnection to the Developer,
within the period of validity of the LOI.
• Point of Interconnection: The LOI shall specify the Point of
Common Coupling and the Point of Supply, to enable the
Generating Company to develop the cost estimates for the
interconnection.
• Estimate of interconnection costs: Within 30 days of sending the
LOI, the DNO shall send the Seller a rough initial estimate of the
interconnection costs and an engineering assessment of whether
the identified interconnection point can absorb the full power
amount proposed by the SPP.
• Information exchanged between Seller and DNO: While the LOI
is still valid, the Seller and DNO shall exchange technical
information on its proposed generator and expected fault levels. 25
Proposed rules regarding LOI process #3
• Upgrades to DNO system: If the interconnection point, in its
present state, cannot absorb the amount of power that the Seller
proposes to export then the DNO will also estimate the costs to
upgrade the distribution system (lines, substations, etc.) to sufficient
capacity such that the full proposed amount of electricity exported
by the Seller can be safely injected at the identified interconnection
point.
• The rules allow the Seller to upgrade the DNO’s facilities as an
alternative to construction by the DNO as long as the upgrade
meets the same standards that the DNO would have used. In the
event that the Seller upgrades the DNO’s distribution system,
ownership of all improvements beyond the Interconnection Point
(as defined in the PPA) will be transferred to the DNO upon
commissioning.
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Proposed rules regarding LOI process #4
• Maximum allowable generation capacity: If the Seller’s proposed
generation capacity exceeds 10 MW, even if the Seller’s proposed
export capacity does not exceed 10 MW, then the DNO may
propose a maximum allowable generation capacity allowed to
interconnect at the proposed interconnection point.
• LOI expiry: The rules require that within twelve (12) months from
receipt of the LOI from the DNO, an “Application for Interconnection
and Sale of Electricity” must be completed and submitted to
Director General of Transmission of DNO (or some other individual
designated by the Managing Director of DNO). At the sole
discretion of the DNO, the validity of the LOI may be extended six
(6) months at a time, for a maximum of two (2) years from the date
of the LOI.
• If the Developer does not apply for Interconnection and Sale of
Electricity before the validity of the LOI expires, the DNO may issue
an LOI to a different Developer for the same site.
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Land title or lease
Environment and Social Clearance
from National Environmental
Management Council (NEMC)
Resource Rights (e.g.
water rights from River Basin Water Office)
LOI with DNO (Tanesco)
Business license, tax registration, etc.
Building Permit
Environmental and Social Clearance (NEMC)
PPA
EWURA license
• SPP developer approaches NEMC for opinion on the
need for EIA, preliminary EIA or Scoping Report.
• After appropriate report (EIA, etc.) is written and
submitted, NEMC evaluates and, if acceptable, gives
clearance.
• In the event that the NEMC is delayed in issuing a full
clearance, NEMC may issue a ‘no objection’ letter
allowing the developer to proceed with the project
including acquiring bank loans, procuring equipment,
and site development.
• In its licensing determination, EWURA will consider
NEMC ‘no objection’ letter a sufficient substitute for
NEMC clearance provided that the developer commit to
inform EWURA upon final NEMC clearance.
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Land title or lease
Resource Rights (e.g.
Power Purchase Agreement
(PPA)
water rights from River Basin Water Office)
LOI with DNO (Tanesco)
Business license, tax registration, etc.
Building Permit
Environmental and Social Clearance (NEMC)
PPA
EWURA license
• To initiate the PPA agreement process, the
Seller completes and submits to Tansco an
“Application for Interconnection and Sale of
Electricity”
– technical engineering information (one-line diagrams,
specifications of key equipment) that DNO needs in
order to determine if the proposed project is in
compliance with the Interconnection Rules and
Guidelines
– Includes information submitted in the ‘exchange of
information’ as part of the LOI process.
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Proposed rules related to PPA #1
•
•
•
The rules specify that the DNO’s decision to sign or reject the standardized
PPA is based solely on its evaluation of whether the design of the Seller’s
facility as described in the Appendix 4: Application for Interconnection and
Sale of Electricity is in compliance with the “Guide for Grid Interconnection of
Embedded Generators to the Main Grid and Isolated Mini-Grids in Tanzania”.
Within 30 days from the date the DNO receives all the required information
specified in the application form the DNO will notify the applicant whether the
application is accepted and will indicate the DNO’s willingness to sign the
PPA. No later than 30 days after this, the DNO shall make itself available for
signing the PPA.
The DNO will then provide the applicant with details of interconnection costs
within 90 days from the date of sending acceptance notification. Seller will
pay mutually agreed-upon interconnection costs, including costs, if any, of
upgrading DNO’s system to accept capacity proposed by Seller. (As noted in
LOI section, Seller has the option of undertaking the upgrade of the DNO
facilities.)
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Proposed rules related to PPA #2
•
•
•
•
•
If the DNO and Seller cannot agree on interconnection costs, then parties
shall pursue the arbitration process described in Article 8 of the SPPA.
The Seller and DNO must sign a PPA within 60 days from the date that the
DNO sends details of interconnection costs or acceptance notification
(whichever comes last). If the Seller fails to sign the agreement within this
time frame, the application submitted will be considered void.
The Seller who has signed the power purchase agreement may dispatch
power into the grid only after the DNO has checked whether the
interconnection as well as the installed connection equipment meets the
standards specified in the application form and the PPA. Such compliance
will be indicated in an ‘interconnection certificate’ granted by the DNO upon
satisfactory installation of the required equipment.
The DNO shall complete the testing within 30 days from the date the Seller
has completed the installation of all required equipment.
If the Seller is required by law to obtain a license from EWURA, it must show
the DNO that it has been issued a license prior to the commencement of the
sale of electricity.
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Proposed rules related to PPA #3
• The rules require that Commissioning Date shall be within two years
from the date of signing the SPPA. The developer is required to
submit quarterly progress reports indicating progress towards this
goal. In an exceptional circumstance, the SPPA at the time of signing
may state a time longer than two years allowed for construction. If the
developer does not commission the project within the agreed upon
timeframe, the SPPA will be considered void unless both parties
agree to an extension.
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Land title or lease
Resource Rights (e.g.
water rights from River Basin Water Office)
LOI with DNO (Tanesco)
EWURA license
Business license, tax registration, etc.
Building Permit
Environmental and Social Clearance (NEMC)
PPA
EWURA license
• SPPs up to 1 MW are exempt from
EWURA’s licensure requirements
– Must submit completed registration form
• Location, business registration, capacity of facility,
GWh/yr, date of planned construction
• Non-exempt (>1 MW)
– Submit license application
• Same as registration, plus
–
–
–
–
Section on managerial competence
Feasibility study
Business plan.
Permits and clearances (NEMC, water rights, etc.)
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Proposed rules related to EWURA
license
• The rules require that EWURA will respond with a
license or an explanation of why a license was denied
within 45 days. The rules specify that an initial license
will be granted for fifteen years. Subsequently, renewed
licenses will be granted for fifteen years. All generators
are also required to submit, on an annual basis, a
completed SPP Annual Reporting Form.
• The EWURA license application requires a fee of Tsh
100,000 paid to EWURA.
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Thank you
For more information, please contact
[email protected]
This presentation available at:
www.rea.go.tz
www.ewura.go.tz