Power Purchase Programmes (PNCP & MTPPP)

Transcription

1 Smart power choices for Africa Power Purchase Programmes (PNCP & MTPPP) Akash Prakash Senior Consultant Eskom South Africa May 2009 CTICC, Cape Town, SOUTH AFRICA

2 Eskom Power Purchase Programmes Pilot National Cogeneration Programme (PNCP) Medium Term Power Purchase Programme (MTPPP) Multi Site Baseload IPP Programme Renewable Energy IPP Programme is being developed

3 Eskom Power Purchase Programmes Pilot National Cogeneration Programme (PNCP) Medium Term Power Purchase Programme (MTPPP) Multi Site Baseload IPP Programme Renewable Energy IPP Programme is being developed

4 Pilot National Cogeneration Programme (PNCP)

5 PNCP Background The cogeneration guidelines, regulations and implementation programme will take some time to be in place Eskom s first new base load power plants due to come on line during 2012 to 2013 Window of opportunity exists between now and approximately 2012 The initial pilot will allow both Eskom and NERSA an opportunity to gauge the cogeneration market in SA Size of the market offering Cogeneration mix, location, profile Pricing of cogeneration options being proposed Timing of potential cogeneration projects Appropriate PPA to offer Lessons learned will be carried forward into the long term cogeneration model for SA Eskom was prepared to invest considerable resources at risk to kick start Co-generation initiatives in South Africa The objective of the PNCP is to stimulate the development of cogeneration technologies in South Africa and in so doing contribute towards meeting the need for new generation capacity.

6 PNCP Cogeneration Types Type 1 : Projects utilizing process energy which would otherwise be underutilized or wasted Type 2 : Primary fuel based generation projects which produce, as part of their core design, other usable energy in addition to electricity Type 3 : Renewable fuel based projects, where the renewable fuel source is both (i) a primary source of energy used for generation and (ii) a co-product of an industrial process

7 Key Features of the PNCP offer new build or re-commissioned plant of net capacity >1MW. Bids must be below the Ceiling Price determined by the avoided cost model Modifiers for location benefits (Dx &Tx) Early Completion Incentive (ECI) for early COD Cheapest bids from technically and commercially qualified bids win contract A standard contract (PPA) was developed for the Cogeneration projects which include inter alia Self dispatch Energy only payment TOU differentiated payment profiles Performance criteria Minimum 7 year and Maximum 25 year contracts are offered Latest Commercial Operation Date (COD) is 2012 Network Costs Connection costs for generators account Use of System costs is passed thru to the Buyer

8 PNCP Timelines Activity 1. Expression of interest completed Target date 29 June Request for Tender (RFT) Issue RFT and first draft PPA to bidders First bidders conference Issue second draft PPA to bidders Issue final draft PPA to bidders Second Bidders Conference 3. Bid submission 4. Bidders notified of outcome 4 October November January March April May September 2008

9 Medium Term Power Purchase Programme (MTPPP)

10 MTPPP Background Eskom is seeking to augment its short to medium term power supply under the MTPPP The programme was launched in response to approaches from the market wishing to participate in alleviating the medium term supply constraints To cater for generators that could not participate in PNCP. The aim is to provide an option to project developers that have the ability to bring supply on line by 2012 or sooner, and that prefer not to have long term off-take arrangements in place.

11 MTPPP Offer key terms Limited to plant that will be in commercial operation by June Maximum contract duration, ending December Last date for submission of proposals is 1 December 2008 Projects with a maximum size of 1000MW and minimum of 5MW per project will be eligible to participate. Programme open to all technology solutions, that are new build, incremental capacity increases or refurbishments of existing plant. Only open to plant that is located within South Africa. Contract currency will be ZAR. On implementation of the Power Conservation Programme (PCP), thebidder is allowed the choice to continue with the PPA as agreed or restate the contracted capacity in the PPA

12 MTPPP Price Levels Ceiling price Maximum price The above rates are an average of detailed TOU modelling performed by Eskom. The price path is sculpted to provide incentive for early start-up when the value of additional capacity is greatest. The price path is based on avoided cost of generation smoothed to reflect the short term (high) cost of supply options in the first years of the Programme, and long term generation costs expected to apply at the end of the Programme. The smoothed prices also reflect the relatively short duration of the Programme with a maximum of 10 years. Effective price over the period if plant is online from 2009 is 57c/kWh, if plant comes online by 2012 then effective price is 51c/kWh.

13 MTPPP Project Timeline Advertisement placed in national newspapers and on Eskom website to launch the MTPPP project Feb 2008 Draft Request for Tender and Power Purchase Agreement released on Eskom website on 1 April 2008 (excluding price information) Bidders conference to introduce programme to interested bidders 21 April 2008 Final documents released (including price information) 13 May 2008 Last date for bid submission 1 December 2008 Bidders informed of Eskom evaluation outcome 03 April 2009 Next Steps: Obtain all Buyer and Seller approvals to be able to conclude contracts

14 Observations Substantial Co-generation / distributed generation potential exists in South Africa and the region Co-generation / distributed generation can play a sustainable role in complimenting traditional base load generation in the future It is a challenge to balance the needs of different participants and project structures with a standard PPA the one size fits all approach However, bilateral deals are more time consuming to conclude Development cycle is more complex and time consuming than expected by most developers Shortage of skills in the development of power generation projects

15 Observations Migration of projects to other programmes/initiatives Cogeneration process (PNCP) Medium term power purchase programme (MTPPP) Supply to New Loads Power Conservation Programme (PCP) Security of Supply Learnings from the PNCP and MTPPP will be factored into the development of any future programme (engagements with NERT, EIUG, developers) Enabling environment for IPPs Policies, regulations, guidelines, cost recovery, govt support package

16 Thank You Akash Prakash (011)