Global Examples of Large Scale Wind Projects and Localization Strategies

Transcription

1 Global Examples of Large Scale Wind Projects and Localization Strategies İbrahim ERDEN Enerjisa Enerji A.Ş.

2 GW Development of Wind in Turkey Supports Localization of Wind Equipment Blade Manufacturers Enercon Aero LM Wind Installed Wind Power Capacity in Turkey 4,0% 4,3% 3,3% 2,7% 2,8 2,3 1,7 1,3 5,2% 3,6 6,9% 6,2% 4,7 5,3 10 8% 7% 6% 5% 4% 3% 2% 1% 0% Tower Manufacturers TPI Composities Alke Ateş Çelik Çimtaş Enercon Kule Cumulative Wind Capacity Share of Wind in Turkey Gesbey Tektuğ Temsan Source: TUREB, *up to August, 2016 **Forecast

3 Existing localization pace is not satisfactory for policy makers YEKA Purpose: Developing local industry, increasing local manufacturing capabilities and local content Many countries have similar purposes and Turkey is racing with its regional and global competitors to host such investments; such as Iran, Egypt, Morocco, Saudi Arabia, Brasil, South Africa, Russia etc. Countries have developed alternative investment and support mechanisms for wind investments and local industrial development. Analysis of 3 Countries IRENA, 2013 China South Africa Brasil

4 IRENA s 2015 Renewable Energy Auction Guide: Choice of the auctioned volume and the way it is shared between different technologies and project sizes Demand Qualification Requirement Sets minimum requirements for future participants in the auction Investor s Liabilities Winner Selection Process Sets specific rules to ensure high implementation rate of awarded projects in a timely manner Defines how the supply curve information is collected and based on what criteria the winner is selected IRENA- 2015

5 To Design Renewable Energy Auctions To develop a specific technology (wind, solar, etc) Selecting of a technology specific auction To minimise costs Introducing a technology neutral auction Demand To meet urgent capacity needs Auction the total volume at once through a standalone auction To enhance investor s conidence, the total volume can be divided into different rounds in a systematic auctioning scheme Sellers Liabilities Qualification Requirements Winner Selection Process The risk allocated should be clearly Communicated Transparent Fully quantifiable Enforced For specific renewable energy deployment goals Technological requirements, project size requirements or location constraints To ensure cost effectiveness Setting a ceiling price To reach the lowest price Minimum price criteria IRENA To limit the risk of delays and underbidding Stringent compliance rules To meet broader development goals Local content requirements, job creation, other socio-economic benefits

6 To Design Renewable Energy Auctions Renewable Energy Policies and Auctions Demand Qualification Requirements Winner Selection Process Sellers Liabilities Specific Demand Bands Reputation Requirements Bidding Procedure Commitment to Contract Signing Determining the Auctioned Volume Technological Rquirements Requirements of Minimal Competition Contract Schedule Periodicity and Long- Term Commitments Production Site Selection and Documentation Winner Selection Criteria Remuneration Profile and Financial Risks Demand-Side Responsibilities Securing Grid Access Clearing Mechanism and Marginal Bids Nature of the Quantity Liabilities IRENA Instruments to Promote Socio- Economic Development Payment to the Auction Winner Settlement Rules and Underperformance Penalties

7 IRENA IRENA s 2015 Renewable Energy Auction Guide: Critical sector-specific questions need to be addressed to design a proper wind technology roadmap that suits to the particular country context and its relevant goals: What is the size of the potential wind energy market? Are the economic opportunities leading to job creation and economic growth brought on by the growth of the wind energy industry in the country being fully realized? What is the optimum level of localization of the industry in the country in the short to long term? What interventions and support need to be offered to achieve the optimum level of localization of the industry? In response to the above, relevant state institutions need to initiate studies aiming at investigating the «optimum level of localisation» that can be achieved in the wind energy industry and contribute to the alignment of industry and government interventions. Such studies should include following five components, 1. Wind energy market profiling and sustainability assessment 2. Wind energy industry value chain profiling 3. Investigation into the localization potential 4. Finance and certification aspects analysis 5. Wind energy localization roadmap

8 GW Overview of Brazilian Wind Market Electricity Generation Portfolio Wind Capacity Growth Hydro Biomass Natural Gas Oil Wind Small Hydro Coal Nuclear ~2.5 GW/y 0 1 New (MW) Cumulative(MW) ABEEOLICA October 2016,, AURES 2016, windpowermonthly

9 Overview of Brazilian Wind Auctions Brazil has been conducting long term capacity tenders for min. 15 year PPAs in all technologies including wind with a strong localization scheme. Form of Support Auctioned Support Duration Auction Procedure Ceiling Price Price Rule Evaluation Criteria Qualification Requirements FiT 20 Years Hybrid: descending-clock auction, then sealed-bid auction Yes Pay-as-bid Price-only Environmental permits, grid access approval, resource measurements by an independent authority, bid bonds Local Content Requirement: Local content is not a must but in order to utilize National Bank of Brazil s cheap and favorable financing packages, parties need to meet strict local content requirements ABEEOLICA October 2016,, AURES 2016, windpowermonthly

10 Brazil Local Content Requirements Phase - with generators delivered from this date General rule A1 Initial Step A2 July 2013 A3 January 2014 A4 July 2014 A5 January 2015 A6 January 2016 To fulfil the requirements for 3 out the 4 turbine parts described below To fulfil A1 and the requirements described below To fulfil A2 and the requirements described below To fulfil A3 and the requirements described below To fulfil A4 and the requirements described below To fulfil A5 and the requirements described below Tower Should be manufactured in Brazil (in own facility or outsourced), with at least 70% (in weight) of its materials (steel or reinforced concrete) produced in Brazil Not mentioned Should be manufactured with 100% Brazilian precedence of internal components (ladders, platforms, cup-holders, electric conductors, screws) Not mentioned Should be manufactured in Brazil with at least 60% of quantity of forged components from Brazil Not mentioned Blades Should be manufactured (in own facility or outsourced) in Brazil Same as A1 A1 with at least 40% of materials (in weight) from Brazil Same as A3, with 50% instead of 40% of local materials Same as A4, with 60% instead of 50% of local materials Not mentioned Hub Should be assembled in own facility in Brazil Same as A1, but in this stage, with at least one component (housing, bearings, pitch control actuator, or pitch control panels) manufactured in Brazil in own facility Same as A2, with two of the four main components manufactured in Brazil Same as A3, raising to three of the four components manufactured in Brazil Should be assembled in Brazil in own facility with all four main components also manufactured in Brazil Not mentioned Nacelle Should be assembled in own facility in Brazil Same as A1, but requiring more detailed planning Same as A2, with even more detailed planning and certifications Same as A3, with again more detailed planning and certifications. Same as A4, with main structural parts manufactured in Brazil Same as A5, with main structural parts manufactured in Brazil Larive International, 2014

11 Contracted Capacity (MW) Energy Price (US$/MW) Overview of Brazilian Wind Auctions 5000 Summary of volumes and prices of the winning bids $ $ $140 $ Proinfa (2004) Dec 2009* Aug 2010* Aug Aug Aug 2011* Dec Dec Aug 2013* Nov Dec Jun Oct 2014* Nov Aug 2015 Nov 2015 $100 $80 $60 $40 $20 $0 * reserve auction ABEEOLICA October 2016,, AURES 2016, windpowermonthly 2.1 GW 3.0 GW 4.6 GW 2.2 GW 1.1 GW

12 Benefits of Brazilian «YEKA» Scheme With an approx. 2-3 GW/year capacity allocation Brazil managed to reach a staged and impressive localization in 4-5 years. Wind energy currently generates 145,000 jobs; 41,000 of which were created in 2015 In 2019, the expectation is that the production of the wind industry reach the 277,000 jobs, with 18.4 GW of total installed capacity In 2015, jobs in the installation part remain dominant while manufacturing jobs also increased with the opening of a number of factories along the entire supply chain, i.e. Gamesa opened its first nacelle factory Acciona expanded its production line SKF entered the market with a factory, producing bearings, seals and lubrication systems TEN-Wind Towers Northeast has a production capacity of 200 steel towers annually GWEC

13 Overview of South African Wind Market Electricity Generation Portfolio Wind Capacity Growth (Contracted) ,2 2 1,3 0,6 Coal Nuclear Wind Others Pump Storage New Cumulative State of Renewable Energy in South Africa 2015, AURES

14 Overview of South African Wind Auctions Renewable energy is envisaged to be used as a vehicle to promote rural socio-economic development. South Africa targeted to create 50,000 green economy-related jobs by 2020 and achieve an industry-wide localisation of at least 35% by 2016, and increase local content in the years to follow towards the aspirational target of 75% with a min 45% threshold. Form of Support Auctioned FiT Support Duration 20 Years (in local currency) Auction Procedure Ceiling Price Price Rule Evaluation Criteria Qualification Requirements Sealed-bid Yes Pay-as-bid Multi Criteria: price (70%) and contribution to economic development (30%) Proof of project readiness: (land acquisition, suppliers, and environmental consent), yield assessment financial viability, contribution to economic development, bid bond Concept of the Economic Development Contribution: job creation counts for 25% local content for 25% ownership for 15%, management control for 5% preferential procurement for 10% enterprise development 5% socio-economic development 15% State of Renewable Energy in South Africa 2015, AURES

15 Overview of South African Wind Auctions viewpoint

16 Contracted Capacity (MW) Energy Price (USD $/kwh) Overview of South African Wind Auctions ,11 Summary of volumes and prices of the winning bids 0, ,09 0,09 0,08 0,10 0, , , , ,00 State of Renewable Energy in South Africa 2015, AURES

17 Benefits of South African Scheme MW Allocation Local Content Value (Millions) Local Content % Capex 27.40% 48.10% 46.90% 49.00% Job Creation: Construction Job Creation: Operations Employment Opportunities with Wind Auctions New Cumulative State of Renewable Energy in South Africa 2015, GWEC

18 MW Overview of Chinese Wind Market Electricity Generation Portfolio Wind Capacity Growth Thermal Power Water Power Wind Power Solar Nuclear Power ~20-25 GW/y New Total De Xin 2016, AURES 2016,

19 Overview of Chinese Wind Market The Wind Power Support Program ( ) to increase localization to set a feed-in tariff (FIT) price for wind afterwards The project sites were pre-selected by local and central government In 2003, a minimum local content of 50% was required with 20% weight in the bid evaluation In 2005, the local content requirement became 70% with 35% weight in bid evaluation In 2006, the price criterion s weight was further reduced to 25%. FiT system was introduced and when the domestic industry had been fully established In 2009, the requirement on local content was abolished Form of Support Auctioned Support Duration Auction Procedure Ceiling Price Price Rule Evaluation Criteria Qualification Requirements FiT 25 Years Sealed-bid. Conducted negotiations with highestranked bidders before contracting capacity None First price bid, Average price bid since 2007 Multi Criteria: price (bid closest to the average price scored highest), LCR, technical experience LCRs, proof of financial viability and project experience De Xin 2016, AURES 2016, GIS

20 Contracted Capacity (MW) Average Energy Price (US $/MWh) Overview of Chinese Wind Market Summary of volumes and prices of the winning bids 5000 $65,0 $66, $63,0 $64,0 $62, $60, $57,30 $56,80 $57, $58,0 $56, $54, $52,0 De Xin 2016, AURES 2016, GIS

21 New Installed Turbine Capacity (MW) Direct Employment Overview of Chinese Wind Market China s Wind Turbine Manufacturing and Job Creation Newly Installed Capacity Direct Employment GWEC 2015, Global Subsidies Inıtiatives 2016, worldwatch-2011

22 Market Share Overview of Chinese Wind Market Global market share of the world's leading wind turbine manufacturers in 2015 Key players in the Chinese wind market in 2015 Manufacturer MW Market Share 35% 30% 25% 20% 15% 10% 05% 00% 13% 12% 10% 08% 05% 05% 05% 04% 04% 03% 31% 1 Goldwind 7, % 2 Guodian United 3, % 3 Envision 2, % 4 Mingyang 2, % 5 CSIC 2, % 6 Shanghai Electric 1, % 7 XEMC 1, % 8 DongFang Electric 1, % 9 Windey 1, % 10 Sany % Others 5, % Total 30, % China s wind power exports , , , ,16 Annual(MW) Cumulative (MW) GWEC ,5 43,25 54,3 267,

23 Overview of Morocco Wind Tender IRENA- 2015

24 Major take-aways Each country has it own dynamics to shape the localization and relevant auction strategy Various parameters were used to engage with changing needs of particular countries Price Localization strategy Economic development needs Social needs Qualification approach Allocated capacity is the key to increase investors appetite and success potential for localization Countries impose staged localization targets depending on their local, technical and commercial expertise Such imposed localization proves that significant price reductions cannot be achieved in short term IRENA- 2015

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