Scope of Presentation

Transcription

1 Scope of Presentation 1. Demand Scenarios for Liberia s interconnected grid. 2. Production of St Paul hydro plants with and without the Via Reservoir 3. Economic analysis: Is the Via Reservoir an attractive supply option for Liberia? 4. Financial analysis: Tariffs of the Via Reservoir and St Paul hydro plants

2 Demand Scenarios Options 2 : WB, Monrovia Electrical Grid + Non-Monrovia Industrial Potential On-Grid

3 Source: LEC, Energy sold Monthly Demand Pattern in 2012

4 Average Production Potential of Mt Coffee Installed capacity: 80 MW

5 Average Production Potential of Mt Coffee Installed capacity: 120 MW

6 Average Production Potential of SP-1B At maximum installed capacity of 120 MW

7 Average Production Potential of SP-2 At maximum installed capacity of 214 MW

8 Estimation of production injected into grid 1. Monthly model 2. Minimum of 10% of demand satisfied by thermal plants 3. Remaining demand: Served to extent possible by Mt Coffee. Start of production in When Mt Coffee cannot satisfy the remaining demand: SP-1B injects into the grid. Start of injection and installed capacity depend on Demand Scenario. 5. When Mt Coffee and SP-1B cannot satisfy the remaining demand: SP-2 injects into the grid. Start of injection and installed capacity depend on Demand Scenario.

9 Estimation of production injected into grid Example: Low Demand Scenario, Mt Coffee 120 MW, without Via Reservoir (80 MW until 2023, 120 MW from 2024)

10 Estimation of production injected into grid Example: Low Demand Scenario 2023 without Via Reservoir

11 Estimation of production injected into grid Example: Low Demand Scenario, Mt Coffee 120 MW, with Via Reservoir (80 MW until 2023, 120 MW from 2024)

12 Example: Estimation of production injected into grid Low Demand Scenario, with Via. Mt Coffee: 80 MW until 2023, 120 MW from SP-1B: 60 MW from 2032, 120 MW from 2040.

13 Example: Estimation of production injected into grid Low Demand Scenario, with Via. Mt Coffee: 80 MW until 2023, 120 MW from SP-1B: 60 MW from 2032, 120 MW from SP-2: 60 MW from 2045 onward.

14 Estimation of production injected into grid Example: High Demand Scenario, with Via. Mt Coffee: 80 MW until 2023, 120 MW from SP-1B: 60 MW from 2028, 120 MW from SP-2: 107 MW from 2039, 214 MW from 2045.

15 Hydropower Production Some Results Optimal sequencing of installed hydro capacity on St Paul River remains to be determined. (Results of economic and financial analyses depend significantly on when and how much hydro capacity will be available on St Paul River.) The Via Reservoir will significantly increase hydropower production during the dry season, thereby reducing the (costly) generation of thermal plants.

16 Hydropower Production Some Results Hydro expansion plan which focuses on meeting the demand in Liberia will not provide a marketable export potential unless a WAPP Spot Market exists. Hydro plant dedicated to exports will be needed for exports.

17 Economic Analysis - Method The levelized economic costs (US$/kWh) of the system consisting of the Via Reservoir and hydro plants on the St Paul River have been calculated prices, discount rate 10%, horizon Costs: Investment and O&M costs of Via Reservoir, SP-1B and SP-2. Mt Coffee: only costs of expansion of Mt Coffee plant Benefits: kwh injected by the hydro plants. In the case of the 80-MW Mt Coffee plant, the injected kwh are the difference between the injected kwh with and without Via

18 Economic Analysis - Assumptions Investment cost a) Via Reservoir: 365 million US$; period Cost include preparatory costs and environmental cost (resettlement, mitigation) b) Mt Coffee expansion: 40 MW at 2,625 US$/kW; installation in in some scenarios c) SP-1B, SP-2: unit cost 3,150 US$/kW. Costs of first installation spread over four years; second installation over two years.

19 Economic Analysis - Results In the High Demand Scenario, the levelized economic costs are estimated to be in the order of US cents/kwh with the range of US cents/kwh considered as the most likely. Costs would be above 20.0 US cents/kwh if Mt Coffee s 80-MW plant were Via s only customer. (Above 17.0 if 120-MW from 2024 onward).

20 Economic Analysis - Conclusions How do US cents/kwh compare with levelized costs of alternatives? Diesel generators Much higher levelized costs ( 15 cents/kwh) Large thermal plants Fichtner calculates in the least-cost plan with 10.1 US cents/kwh for coal-fired plants (50-MW units). The costs do not account for infrastructure facilities needed for the use of coal (landing terminal) and neither for the costs of greenhouse gas emissions. WAPP The World Bank s Options Study mentions 11 US cents/kwh as lowest value for imports.

21 Economic Analysis - Results In the Low Demand Scenario, the levelized costs are estimated to be in the order of US cents/kwh with the range of US cents/kwh as the most likely. Costs would be above 22.0 US cents/kwh if Mt Coffee s 80-MW plant were Via s only customer. (Above 20.0 if 120-MW from 2024 onward).

22 Economic Analysis - Results The Low Demand Scenario offers one possibility to reduce the levelized costs: the construction of a hydro plant dedicated to exports. Example: If 107-MW of SP-2 capacity is built and starts exporting from 2030 onward, levelized costs would decline to US cents/kwh (full potential exported). If 214 MW is installed for exports, the range would be US cents/kwh.

23 Financial Analysis - Method Calculation of tariffs The Via Reservoir is assumed to be paid by the hydro plants on the St Paul River per kwh which the plants generate. The hydro plants generation tariff calculation takes into account the payments made to Via. The determined tariffs of the Via Reservoir and the hydro plants produce an average return on gross assets of about 5% or 3% (average from start of operation until 2050).

24 Financial Analysis - Assumptions Financing conditions Via Reservoir Preparatory costs: not considered (2% of total) Environ. cost (RAP, other): GoL from budget ( 24 mio US$) Invest. cost: Grants ( 222 mio US$), loans ( 112 mio US$) Loan conditions 3% interest rate, IDC capitalized, grace period such that repayments start 2022 or 2023, repayment period 15 years Financing conditions very favorable. Probably no need for injection of funds during operation period at tariffs indicated hereafter.

25 Financial Analysis - Assumptions Financing conditions Mt Coffee (80-MW, 210 million US$) Grants from Norway and Germany (110 mio US$) EIB loan (50 mio US$, 1.43%, 5 years grace, 15 years repaym.) GoL from budget (50 mio US$) Same conditions for 40-MW extension. Financing conditions very favorable. Probably no need for injection of funds during operation period at tariffs indicated hereafter.

26 Financial Analysis - Assumptions Financing conditions SP-1B, SP-2 75% concessionary loans (5% interest, start repayment at start of production, repayment 10 years) 25% GoL (75% thereof by loans, 25% from budget. Loan conditions: 10% interest, repayment 5 years, start in year of production) Financing will require injection of funds during operation period at tariffs indicated hereafter.

27 Financial Analysis - Results Via Reservoir Tariffs (tariffs in 2013 US cents/kwh) Demand Scenario High Low Power plants: Mt Coffee, SP-1B, SP-2 (ROA 5%) Power plants: Mt Coffee, SP-1B, SP-2 (ROA 3%) Power plants: only Mt Coffee, 80 MW (ROA 5%) Power plants: only Mt Coffee, 80 MW (ROA 3%) Power plants: only Mt Coffee, 120 MW (ROA 5%) Power plants: only Mt Coffee, 120 MW (ROA 3%)

28 Financial Analysis - Results Mt Coffee Tariffs (account for payments made to Via; tariffs in 2013 US cents/kwh) Demand scenario High Low Power plants: Mt Coffee (80 MW), SP-1B, SP-2 (ROA 5%) Power plants: Mt Coffee (80 MW), SP-1B, SP-2 (ROA 3%) Power plants: Mt Coffee (120 MW), SP-1B, SP-2 (ROA 5%) Power plants: Mt Coffee (120 MW), SP-1B, SP-2 (ROA 3%) Power plants: only Mt Coffee (80 or 120 MW) (ROA 5%) Power plants: only Mt Coffee (80 or 120 MW) (ROA 3%)

29 Financial Analysis - Results SP-1B Tariffs (account for payments made to Via; tariffs in 2013 US cents/kwh) Demand scenario High Low Power plants: Mt Coffee, SP-1B, SP-2 (ROA 5%) Power plants: Mt Coffee, SP-1B, SP-2 (ROA 3%)

30 Financial Analysis - Results SP-2 Tariffs Not meaningful as considered production period too short. Longest 13 years ( ). High tariffs in the High Scenario between 10.0 and 11 US cents/kwh and in the Low Scenario between 15.0 and 16.5 would be necessary to achieve an average ROA of 5% over the short periods. Tariffs would be about same as the SP-1B tariffs at same length of production period.

31 Financial Analysis - Results Mt Coffee Tariffs (US cents/kwh; ROA 5%) Demand scenario High Low - Without Via With Via only Mt Coffee With Via Mt Coffee, SP-1B, SP

32 Financial Analysis - Results Average Generation Tariffs in the Interconnected Grid - Low Scenario Assumption: Demand for generation not met by St Paul hydro plants is met by diesel generators at cost of 0.28 US cents/kwh. St Paul hydro plants Mt Coffee without Via Reservoir Only Mt Coffee with Via Reservoir Mt Coffee, SP-1B and SP-2 with Via 20.0 US cents/kwh 18.0 US cents/kwh 11.2 US cents/kwh

33 MAIN CONCLUSIONS The Via Reservoir is very likely being an attractive supply option for Liberia. The economic and financial benefits depend on the hydropower production on the St Paul River. The maximum benefit will be obtained if in addition to Mt Coffee, SP-1B, SP-2 and the Via Plant are installed. The Via Reservoir can be expected to enjoy important financial support from the EU and other donors (grants, favorable loans).

34 MAIN CONCLUSIONS With the Via Reservoir, the average generation costs could be reduced by about two-thirds compared to the present situation. The costs of hydro plants on St Paul would be between 4.0 and 10.0 US cents/kwh. That, in turn, will enable significant reductions of end-user tariffs.