Transcript Country Case Studies: Thailand & Tanzania Feed-in Tariffs and Small Power Producer Regulations Workshop on grid‐integration of small scale decentralized renewable energy (DRE)

Country Case Studies: Thailand & Tanzania
Feed-in Tariffs and Small Power Producer Regulations
Workshop on grid‐integration of small scale
decentralized renewable energy (DRE) systems
Victor Menezes Convention Centre (VMCC), IIT Bombay (Mumbai)
3 April 2012
Chris Greacen
Thailand
Tanzania
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
•
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 = US$6/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
VSPP project pipeline as recorded in
EPPO data
Application
under
consideration
Permission
received,
awaiting PPA
PPA signed
Leakage (Project abandoned)
Generating &
selling electricity
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
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 tariff adders
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
Current VSPP challenges & responses
Challenge
Response
1. PPA speculators
Bid bond (200 baht/kWh) ($6/kW).
No adder if >1 yr past Scheduled
Commercial Operations Date.
2. Little diversity
(generators online mostly
>1 MW biomass owned
by sugar, rice mills)
4% interest loans up to 50 million
baht ($1.6 million) per project.
Government loaned 4 billion baht ($133
million) to 13 banks at 0.5% interest.
Challenge
Response
3. VSPP not well integrated into
Power Development Planning
(PDP) process
Not much yet, but Thai NGOs
have developed/advocate
“alternative PDP”
GWh
Fuel mix in power generation
Power Development Plan 2007
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Reflections -- Thai VSPP
• Low-key, local approach kept utilities from being
threatened
• Thailand’s path to full generation-cost FIT started
successfully with tariffs based on avoided cost
• Initial trickle of applications gave utility time to build
capacity to implement program
• Feed-in adder very successful in attracting projects
• Incentivize utility (utility pays for only 98% of energy
from projects >1 MW)
• Challenges arising as program grows, largely being
addressed
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
($0.24.6)/kWh
• 4 PPAs signed by November 2010
www.ewura.go.tz/sppselectricity.html for English versions of regulations, and model PPAs
Lumama 150 kW
• Grid Soon to expand
to 300 kW
TPC Sugar Factory
• Cogen bagasse
• 17.5 MW
SPPs In Operation
Project
MW
Type of Resource
Status
ACRA Tanzania
0.3
Hydro
In Operation / Community based
TANWAT
2.34
Biomass -wood
Selling 1 MW (2010)
TPC Co-Generation
15
Bagasse
Selling 10 MWe to TANESCO (2010)
Katani Power Plant
0.3
Biomass - Waste
Operation - Pilot
SPPs in Preparation
Project
MW
Type of
Resource
Status
Sao Hill Energy
15
Biomass -wood
Applied Licence
Chipole – Own use &
sell to the grid
0.4
Hydro
In operation – additional 3MW
planned
Mwenga
3.36
Hydro
PPA Signed with TANESCO
Ngombeni Mafia
1.4
Biomass
PPA Signed with TANESCO. Under
construction
Kilombero Sugar Co.
10.6
Bagasse
Applied Licence
Tanzania Sisal Board
0.5
Biogas
Applied License
Kitonga Mini Hydro
10
Hydro
Applied License
Andoya Hydro Electric
Co.
0.5
Hydro
Business plan
Kilocha Hydro
12
Hydro
In discussion with REA
Kilombero Mngeta
3
Hydro
In discussion with REA
Where we are now…
• Completed
– All documents passed public review and are approved for
use.
– Several PPAs signed with TANESCO and licenses applied
• Ongoing
– TANESCO in process of establishing SPP cell
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Where we are now…
• Completed
– All documents passed public review and most are
approved for use.
– Several PPAs signed with TANESCO and licenses applied
• Ongoing
– TANESCO in process of establishing SPP cell
– SPP Working Group composition and function
– Discussions between EWURA and REA on how to
coordinate better, done, but may be refined further.
– Determine tariff review methodology for projects selling
electricity at retail
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Challenges
Challenge
 Inadequate financial
resources to support the
initiative
 Inadequate private sector
participation in investment
 High interest rates loans
from commercial banks
 Land ownership and water
rights for SPPs projects
especially wind farms &
mini-hydro plants
 Low Tariff and non-cost
reflective
Response
 WB has established a
facility, engage interest of
other financial institutions
 Conducive Environment,
rules and publicize
 Promote other sources mix
grant and loans
 Include land ownership &
water rights in RE Policy
 Adapt policy in future?
Challenges …..cont. 2
Challenge
 Lack of experience of key
project promoters with
skills in project
management
Response
 Capacity building (REA)
 Lack of Renewable Energy
Policy
 Government needs to set
policy targets, etc.
 Lack of interest on the part
of potential Off-takers
(TANESCO)
 Improving through regular
discussions with utility
Thank you
For more information, please contact
[email protected]
[email protected]
Thai VSPP regulations available at:
http://www.eppo.go.th/power/vspp-eng/
Tanzania SPP regulations available at:
www.ewura.go.tz/sppselectricity.html
Tariffs determined by SPP type
Connected to
main grid
Connected to
isolated mini-grid
Selling wholesale
(to DNO*)
Case 1
Case 2
Selling retail
(directly to final
customers)
Case 3
Case 4
* DNO: Distribution Network Operator (currently TANESCO)
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Tariff Case 1: Selling
Wholesale to Main grid
Ccase1
Clrmc  Csrmc

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: Main Grid
Tariff 2009
(TZS/kWh
Tariff 2010
(TZS/kWh)
Annual Average
85.49
110.30
Dry season (Aug – Nov)
102.58
132.36
Wet season (Jan-Jul and Dec)
75.94
99.27
Note: $1 US = 1497 TZS (November 2010)
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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: Mini grid
Tariff (no seasonal variations)
Note: $1 US = 1497 TZS (November 2010)
Tariff 2009
(TZS/kWh)
334.83
Tariff 2010
(TZS/kWh)
368.87
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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
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