Opportunities and Challenges for On-Grid Solar

Transcription

1 SolarPower Europe Webinar Opportunities and Challenges for On-Grid Solar 06 December 2016 at 16:00 CET

2 SolarPower Europe Webinar MODERATOR Michael Schmela Executive Advisor SolarPower Europe SPEAKERS Alexander Huppertz Project Manager Africa-EU Renewable Energy Cooperation Programme (RECP) Eric Kariningufu Founder and CEO 3E Power Milicent Chidamba Sales Manager, Southern Africa Jinko Solar

3 Africa-EU Renewable Energy Cooperation Programme (RECP) A European Platform for Private Sector Investments in Africa s RE Markets Alexander Huppertz

4 Background I: Demand and Market Volume in Africa SSA: 13% of the world s population, but only 4% of its energy demand Since 2000 energy use has risen by 45% Only 290 out of 915 million people have access to electricity 80% rely on traditional use of solid biomass, mainly fuelwood, for cooking Modern renewables account for less than 2% of the primary energy mix Annual (private!) investment in the range of double-digit billion US$ is required per year to meet Africa s energy needs Enormous challenge = huge opportunities! $1.0bn $0.0bn $0.2bn $0.5bn $0.2bn $0.3bn $2.0bn $1.4bn $6.8bn $6.5bn $3.1bn $5.2bn Other clean energy Geothermal Small hydro Wind Solar New Investment in Clean energy in Sub-Saharan Africa ($bn); Source: Bloomberg New Energy Finance 4

5 Background II: Key Market Segments for RE in Africa Large / Meso- scale on-grid (IPP) Ticket size: Key regulations: XX-XXX US$m (meso: X-XX US$) PPA (FiT) Off-Grid (Mini-Grids) Ticket size: Key regulations: 0.X-X US$m (bundled X-XX US$m) Licences, Tariffs, Grid-connection standards Small on-grid (captive power) Ticket size: Key regulations: 0.X-X US$m (bundled X-XX US$m) FiT / Net-Metering Off-Grid (Standalone Systems) Ticket size: Key regulations: X-XX US$m ( bundled ) Standards, Import Tax / Duties 5 5

6 Key Policy Instruments for Promoting Investment in RE 6

7 Policy Matters!! Analysis of applicants for support through two EU support instruments: ElectriFI and RECP Distribution of applications indicates perception of developers for viability of certain business models in certain markets (in addition to: market size etc.) Key driver for IPP: regulation providing for clear framework for investment 7

8 What is the RECP? The RECP is a African-European platform for promoting renewable energy market development and investment in Africa Funded by the European Commission, the Netherlands, Germany, Austria and Finland 8

9 How can the RECP provide support? Match-Making Events in Africa and Europe Successful Access to Financing Well structured and accessible Market Information Identifying Project Opportunities in Partner Countries Project preparation support and access to financial support + complementary policy advisory + support to skills development and innovation 9

10 How can the RECP provide support? Access to market information Web-based market briefings introducing the political and economic situation, the electricity sector and the RE potential Market Studies with how-to -information, providing an in-depth analysis of a certain market segment (e.g. Captive-Power/Self-Consumption in Nigeria) Project scouting: through in-country partners, and consultants Information events: workshops that introduce certain markets (or segments) presentations or panels; organized through partners 10

11 How can the RECP provide support? Access to potential business partners and project opportunities RECP matchmaking events help you identify your next project/partner: Meet technology suppliers, project developers, service providers from Europe Meet potential clients and business partners from African markets Meet potential financiers More than 15 events in preparation, both in Africa and Europe, for 2016 and 2017 Events are organized standalone or attached to other events, through partners (African and European industry associations or equivalent), with structured matchmaking sessions 11

12 How can the RECP provide support? Information on Financing Opportunities RECP s finance database helps you identify sources of funding: Information on more than 50 individual sources of funding; currently gathering data on funds Initial risk-mitigation instruments included, to be expanded Inclusion of local banks is planned 12

13 How can the RECP provide support? Advisory to Project Developers: the Finance Catalyst Provides advisory support to project developers on project development, structuring and access to finance ( bankability TA ) Cooperation ( two-way-street ) with existing financing instruments (ElectriFI, REPP, SEFA, and many others): feeding into as well as upstream referral Delivered through a team of highly experienced professionals Standardized and fair access procedure through an intake on the RECP website Time budget of up to 100 hours per project (deviations possible) 13

14 Initial Results Access to Finance Finance Catalyst is supporting projects in accessing finance since August 2016 First 3-months of operation resulted already in 94 applications! Applications by Market Segment IPP Mini-Grids SHS Other Small Hydro 8 Biogas 8 Applications by Technology Other 22 Biomass 10 SHS 12 PV 34 Clear need in the market for this type of early-stage project preparation support! 14

15 Initial Results Access to Finance II Strong interface with ElectriFi established Very close collaboration on working and management level between ElectriFi and RECP Finance Catalyst. Mutual referral system in place. Close exchange facilitates targeted advisory from Finance Catalyst Team towards feeding into ElectriFi. Additional interfaces established with: EEP REPP SEFA FMO DEG Energy Access Ventures Et. Al. RECP services are bridging the gap between projects and finance! 15

16 How can the services and products be accessed? Countries, Partners and Access The RECP operates in depth in six African countries (Nigeria, Rwanda, Uganda; Senegal, Zambia and Mozambique in preparation) We cooperate with and implement through a network of partners, both in-country as well as global or European industry associations Information and support services are accessible through 16

17 Thank you for your attention! Suggestions & Feedback always welcome! Contact: Alexander Huppertz,

18 EU Energy Initiative Partnership Dialogue Facility (EUEI PDF) Flexible European Technical Assistance instrument promoting sustainable energy for equitable development Services: donor coordination support, political dialogue, policy advice, private sector promotion Studies and Resources, e.g. Mini-Grid Policy Toolkit Building Energy Access Markets Low Cost Grid Electrification Etc. Bonn 6 December 2016 page 18

19 AEEP Mapping of Initiatives Goal: support coordination between donors, access to information for all stakeholders Objective: provide analytical framework for orientation, map all relevant initiatives in Africa Methodology: public sources, expert consultation, validation with initiatives directly Findings: 58 ongoing initiatives, ~5bn USD in 2013 Available at: Seite 19

20 Opportunities and Challenges for On-grid Solar in Sub Saharan Countries

21 Snapshot of 3E Power History 3E power, founded in 2012, is a Project development company, whose main objective is the structuring and financing of power infrastructure assets Global Reach 3E power operates in Africa, with a specific focus on pre transitioning and transitioning countries in the Sub Saharan Africa region Key Facts and Figures 3E Power counts two major power projects: $ 28 M On-grid Solar PV plant. Off-grid : $ 60M SHS deployment at seed stage development. Services & Solutions Acting as a Project developer allocating resources i) to develop projects from the idea stage to the bankable stage and ii) to facilitate the required financing in debt and equity Key References 3E Power has taken part in the following selected flagship projects: Goldsol II 11.2 MWp Solar PV plant in a JV with Gesto Energia (Portugal) and TMM Renewables (South Africa), Rwanda Off-grid expansion (3 yrs plan: 250,0000 SHS) in Rwanda

22 Why are in business? Africa is still the dark continent ~ 600 million people have no access to electricity (1.2 billion globally) : yearly GDP average growth rate at 4.4% ( excluding oil exporters and Arab spring countries) 90% of the Africa population uses fuelwood for cooking. The average rate of annual deforestation is estimated at 0.8%. 2.7 billion people globally do not have access to clean cooking energies Africa is the only region where population with no access to electricity is actually increasing.

23 Primarily a Developer 3E Power primarily role is to develop projects from the idea to realization In addition, 3E Power can still be involved after financial closure to ensure project completion and then after to assist in the management and optimization of the structure Project preparation Financial Close Monitor Construction Manage relationship with banks Contractual Management Follow up operations Maximize profit Exit strategy

24 Renewables Asset Finance by Region, ($BN) South Africa emerges as the largest market. Probably reached saturation East Africa comes second with opportunities in Wind, Hydro and Solar PV Largest untapped region is certainly Central Africa ( DRC alone has mapped out 10 GW of renewables capacity) West Africa is yet to see expansion the way East Africa has.

25 Renewables by Region and Technology, ($BN) Largely dominated by Solar ( PV and thermal) Wind is growing Enormous opportunities in Central, West and Southern Africa ( SA excluded)

26 PV Asset Finance, 2004-Q ($BN) IEA estimates an annual investment of $ 48 BN to achieve universal access by Electricity access will have a larger share in the overall investment need ( almost 90%). It is assumed 50% of the PPP funding comes from the private sector Tremendous investment by the 2 largest global markets US and China- is helping decreasing the cost of PV modules, enhancing the industry

27 PV Asset Finance by Region, May 2016($M) SA is the biggest player Tremendous opportunities for growth in West and Central Africa. East Africa has had lately large deployment tough most in development phase ( ex. 2x50MW in Zambia)

28 Goldsol II 11.2Mwp, Rwanda The project is being developed by a consortium of 3E Power ( Rwanda), Gesto Energia ( Portugal) and TMM Renewables ( South Africa). EoI The utility issued an EoI as an initial screening 40 developers/companies responded Tender The utility issued the a tender for reverse tariff to 10 selected developers/companies. 6 developers/companies submitted an offer Goldsol II was awarded the project Negotiations An initial round of negotiations were conducted on term sheet of the PPA An MoA ( Memorandum of Agreement) was signed EPC contract was negotiated and signed Deliverables Feasibility studies were conducted and delivered to the utility for approval An EIA ( Environmental and Impact Assessment) was conducted. Its approval granted by the Environmental agency Projects Documents A 2 nd round of negotiations were conducted on the project documents ( PPA, CA, GG) Feasibility study approval was secured Pre-Financing Lenders/DFIs showed interest in the project IFC signed a mandate letter with the developer

29 Challenges Know your Environment ( Regulations, PPP law, Off taker, Taxations ) Debt providers ( T&C, Early engagement) Find the right partners (Technological, Local Partner) Projects Documents ( PPA, CA, Guarantees) Financial Analysis ( Keep an eye on your development cost, FX risk )

30 Thank You What if we mobilized the resources, scale, and scope of large firms to co-create solutions to the problems at the bottom of the pyramid (BOP), those 4 billion people who live on less than $2 a day? Dr C.K Prahalad, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits Erick@3econsulting.co

31 Opportunities and Challenges for On-Grid Solar in Southern African Countries

32 Agenda 1 Overview of Jinkosolar MW 2 Product Portfolio 3 JinkoSolar in South Africa 4 Market Overview of Southern Africa 5 Challenges in Southern Africa 6 Opportunities in Southern Africa 7 Q & A 32

33 Jinko Solar in a nutshell The Largest Solar Module Maker Worldwide Listed on NYSE (JKS) 5 Factories in 4 countries China Fortune Offices/Subsidiaries Sold to 70 countries Employees 6,5 GW Capacity 14 GW Delivered +2.5 Billion $ In Revenues 33

34 Maintaining the top position in terms of shipments Jinko Solar is the Largest Solar Module Maker Worldwide and a member of big 6 Silicon Module Super League (by PV magazine) Position 2012 Ranking 2013 Ranking 2014 Ranking 2015 Ranking Q Ranking Q Ranking Q Yingli Yingli Trina Trina Jinko Solar Jinko Solar Jinko Solar 2 Trina Trina Yingli Canadian Solar 3 Sharp Solar Canadian Solar Jinko Solar Jinko Solar Trina Trina Trina Canadian Solar 4 Canadian Solar Jinko Solar Canadian Solar JA Solar JA Solar 5 Jinko Solar JA Solar JA Solar Hanwha Q Cell Hanwha Q Cell JA Solar Canadian Solar Hanwha Q Cell Canadian JA Solar 2012 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 34

35 Crystalline Silicon Technology evolution Standard Mono, Poly Module 60\72 cell Eagle anti-pid series Smart Module Dual-glass Module 1500V Module Black poly Module PERC module 2012 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 35

36 Jinko Solar in South Africa The only Tier 1 PV producer in Africa (144 MW capacity) #1 market share position( 30%) with 7 utility scale projects financed by 6 banks Supplied 400MW into REIPP Round 1 and 2 The largest operating PV project in Africa (91 MW De Aar) Most present locally: sales representatives in 8 countries 2012 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 36

37 Market Overview of Southern Africa Population of about 300 million 15 countries This region includes Africa s second largest economy, South Africa Abundance in Mineral resources- Gold, Platinum, Copper, Diamonds All SADC countries have developed policies to encourage renewable energy development e.g. Mauritius-FIT, Botswana FIT, & Bidding,Namibia- FIT, SA competitive bidding ( Source:SADC Renewable Energy & Efficiency Report 2015) Estimated total installed capacity of approx. 59GW, approx. 49GW of this installed capacity belongs to South Africa alone (although not all of it is operational) Core power generation is from Hydro and Coal Energy can be traded between countries through the Southern Africa Power Pool (SAPP) 2012 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 37

38 Market Overview Southern Africa- Sweet spots South Africa Power generation skewed towards coal- 92% Integrated Resource Plan (IRP) 2010 targets an increase in capacity to 17,8GW of renewable by Determination for solar 8,4GW Renewable Energy Independent Power Producer Procurement Programme (REIPPPP)- 4 Bid Windows; 2,292 GW for Solar MW in Round 1 MW in Round 2 MW in Round 3 MW in Round 4 MW in Round 4.5 MW in Round MW in Round 5 Solar PV XXX XXX No of projects Small IPP- 2 bid windows to date.49mw already allocated during the first window Distributed generation is gaining momentum 2012 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 38

39 Market Overview Southern Africa- Sweet spots Namibia A net importer of power Power sector undertook reforms, unbundling which resulted in regional distribution companies ( REDS) Current Refit Programme 14 licensees, of which 13 were PV Net Metering discussions at an advanced stage Zambia Exclusively depends on Hydro power low electrification rate of 26% Scaling Solar which will act as a catalyst 150MW Solar RFP from the Ministry Energy & water Development. Minimum size of 10MW Botswana Coal dominates the energy mix Government issued an RFI for 100MW Solar- early this year 2012 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 39

40 Market Overview Southern Africa- Sweet spots Mozambique Hydro is the main source of electricity The electricity sector is based on a concession system Renewable Energy Policy which call for the establishment of feed-in tariffs Mocuba Solar Plant 40MW will pave way for future solar developments Madagascar Candidate for scaling solar-30-40mw Zimbabwe Great potential, rely on imports from SA and Mozambique Greatest challenge is the political risk Heard of planned projects of 50MW, 10MW, 100MW 2012 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 40

41 Challenges for on grid solar in Southern Africa Limited institutional capacity- many governments lack the knowhow to structure, manage and negotiate private power concessions Political risk- political instability, infights, election cycles, succession Limited Access to Financing Poor credibility of the Utility Off-takers; most of them not bankable Lack of Grid Infrastructure Incoherent Government policies- e.g. local content, empowerment 2012 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 41

42 Opportunities for on grid solar in Southern Africa No brainer that Southern Africa has one of the world s best solar resources-many African countries receive on average 325 days of bright sunlight per year Scaling Solar acting as catalyst to open up the doors e.g. Zambia/ Madagascar Power cuts and load shedding are a fact of daily life in most African countries Industrialization Drive Mining Applications-the mining sector is the biggest power user groupgenerally consume about 50% of the national grid. There is a trend towards hybrid diesel and PV systems to lower the cost of electricity supply Dramatic fall in price of PV Technology. In particular solar modules, since beginning of the year prices have fallen down by 30% 2012 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 42

43 Opportunities ctnd The lower tariff of 6,02 cents/kwh in Zambia now set the benchmark for the region. This makes solar a viable option to fossil fuel based generation Cost per kwh of electricity from Solar Tariff 2012 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 43

44 Thank You!!! 44

45 Q&A MODERATOR Michael Schmela Executive Advisor SolarPower Europe SPEAKERS Alexander Huppertz Project Manager Africa-EU Renewable Energy Cooperation Programme (RECP) Eric Kariningufu Founder and CEO 3E Power Milicent Chidamba Sales Manager, Southern Africa Jinko Solar

46 Upcoming Webinars 13 December 2016, 15:00 CET Q3/2016 Solar Market Update FREE FOR SolarPower Europe s Members Presenter: Gaetan Masson, Founder, Becquerel Institute Partner: To register please Visit out Webpage:

47 2016 IHS

48 SolarPower Europe Webinar: Opportunities and Challenges for On-Grid Solar Presentation available: IHS SolarPower SolarPower Europe (European (European Photovoltaic Photovoltaic Industry Association) Industry Association) Rue d ArlonRue 69-71, d Arlon , Brussels, 1040 Belgium Brussels, Belgium T T / F / 725 F info@solarpowereurope.org info@solarpowereurope.org / /