UNDP/GEF Project Decentralized Renewable Energy Power Generation in Lebanon. UNDP/GEF Renewable Energy Portfolio Overview

Transcription

1 UNDP/GEF Project Decentralized Renewable Energy Power Generation in Lebanon UNDP/GEF Renewable Energy Portfolio Overview Lucas Black Regional Technical Advisor Energy, Infrastructure, Transport and Technology (EITT) UNDP Global Environment Facility United Nations Development Programme

2 This is a GEF (Global Environmental Facility) project What is GEF? Financial mechanism of: UN Framework Convention on Climate Change Convention on Biological Diversity Stockholm Convention on Persistent Organic Pollutants Several other global environment conventions Six focal areas - Climate change, biodiversity, land degradation, international waters, ozone depletion and persistent organic pollutants. 12 GEF agencies UNDP, UNEP, WB, Regional Development Banks, FAO, IFAD, UNIDO. UNDP and World Bank have the largest share. Several new agencies have just been accredited. 142 GEF eligible countries Currently the largest global funder for global environment protection This project was funded under GEF V ( ) Climate Change Mitigation (CCM) country allocation for Lebanon Source: GEF 1

3 Emissions (tco 2 e) Overview of UNDP/GEF energy portfolio: 163 active projects - $ 558 m GEF + $ 4.6 b in co-financing 1 Access to clean and affordable energy 2 Low emission urban and transport infrastructure 3 Access to new financing mechanisms Emissions (Business as Usual) Avoided Emissions $ 217m for 72 projects CleanStart; charcoal; cook stoves Mini-grids New generation on-grid $ 306m for 82 projects Next gen EEB projects (enforcement and market transformation) Green cities with incr. climate resilience Emissions (actual) $35m for 9 projects More NAMA type projects Sector Wide Approaches in Civil Aviation and Maritime shipping Standardized Baselines for CDM (and NAMAs) GEF 6 and beyond: Redefine focal area strategic priorities; focus on foundational work and innovation; increased emphasis on scaling-up (link to GCF) market transformation; public-private partnerships 2

4 UNDP s Approach - Promoting clean energy across a range of scales Household Regional / Global E.g. Promotion of energy efficient cook stoves Village E.g. promotion of PV in rural and peri-urban Sudan Focus of Small Grants Project 2,554 projects and UNDP s Sustainable Energy Programme Municipality E.g. City of Varna, Bulgaria: issuing green municipal bonds National E.g. South Africa Wind Energy Program E.g. Uzbek gas pipeline MDG Carbon project GEF,NAMAs, GCF 3

5 UNDP is supporting solar energy projects across a range of scales Off-grid (single-site renewable energy & mini-grids) and on-grid (large- and small-scale, single-site) Solar PV, SWH, Solar pumping and CSP 4

6 UNDP s Market Transformation Approach Objective: Create an enabled investment environment and risk/return profile that catalyses private sector investment Step 1: Identify priority mitigation and technology options Step 2: Assess key barriers and associated risks to investment Step 4: Select financing options for public measures Step 3: Determine appropriate mix of public measures to target barriers/risks Barrier Removal Approach Derisking Approach 5

7 UNDP/GEF project implementation and M&E responsibilities Project approval by GEFSEC signifies formal delegation of authority to implement the GEF project M&E responsibilities GEF Secretariat (DC) UNDP/GEF (NY)) UNDP/GEF Regional Center UNDP Country Office Lebanon Reporting responsibilities Project executing partner PSC/PB Stakeholders 6

8 Key UNDP/GEF rule for project management Project objective and outcomes are difficult to change but project outputs, activities and sub-activities can be adjusted. In fact, the project implementers should constantly monitor them and adapt as necessary, after consultations with key partners. Adaptive management is key, particularly as regards projects in fast-moving, technology-based sectors where market conditions and technology costs rapidly evolve. 7

9 Sectoral Trends - Key findings from IEA Technology Roadmap Solar Photovoltaic Energy Since 2010, the world has added more solar photovoltaic (PV) capacity than in the previous four decades. The geographical pattern of deployment is rapidly changing. PV system prices have been divided by three in six years in most markets, while module prices have been divided by five. IEA roadmap assumes that the costs of electricity from PV in different parts of the world will converge as markets develop, with an average cost reduction of 25% by 2020, 45% by 2030, and 65% by

10 Utlity-scale Solar PV LCOE have been drastically falling over last five years. Represents unsubsidized LCOE range of utility-scale crystalline solar PV in Europe and USD. Source: Lazard,

11 and rooftop PV as well Rooftop solar has benefited from the rapid decline in price of both panels and key balanceof-system components (e.g., inverters, racking, etc.). Source: Lazard, 2014 While the small-scale nature and added complexity of rooftop installation limit cost reduction levels (vs. levels observed in utilityscale applications), more efficient installation techniques, lower costs of capital and improved supply chains will contribute to a lower rooftop solar LCOE over time 10

12 Commercial tariffs in MENA are still highly subsidized Commercial electricity prices and subsidies benchmarked to Palestine (2013) Source: RECREE staff/network, national energy utilities, AFEX 2014 (draft) 11

13 however fuel subsidy changes across MENA region are making PV more cost-effective Egypt s government embarked on a five-year plan to phase out subsidies in the electricity sector. This plan was officially endorsed by the cabinet with the passage of Prime Minister Decision No on July 17 th, This Decision approved annual tariff hikes for most user segments on July 1 each year until A year earlier, Jordan embarked on a five-year program to reform electricity pricing. Faced with growing debt of the national utility NEPCO, Jordan s Cabinet approved on June 19 th 2013 a plan to increase electricity tariffs for most segments until The biggest tariff increases fell on the industrial, tourism and banking sectors with annual increases of 15%. In Tunisia, a program to increase the tariffs has been introduced and the latest increase came in January 2014 when prices were raised by 8%. Another 10% rise was announced in May Tariff structure reforms were done in January 2014 to improve the effectiveness of the tariff system and better cover the cost of electricity consumed at different times (time of use tariffs). 12

14 The Solar PV DG revolution Power to the People Germany has put in place a long-term target of having between 2.5 and 3.5 gigawatts of solar panels installed each year California could see 15 gigawatts of distributed energy resources come online this decade, including 12 gigawatts of distributed solar and 1 gigawatt of grid-scale energy storage 13

15 Small-scale distributed generation Jordan case study In Jordan the Renewable Energy and Efficiency Law 13 (REEL) of 2012 as well as bylaws enable Independent Power Producers (IPP) to provide electricity from renewable sources to NEPCO within long-term Power Purchase Agreements (PPA). High generation costs from conventional power plants in combination with subsidized electricity rates for many small electricity consumers, which are down to JD [USD 0.05] per kwh, have led to a massive deficit for NEPCO. The current policy for Jordan provides for further price increases of between 5% and 15% per year until 2017 for many consumer categories. Private investors may also invest in their own PV system up to 5 MWp to directly consume the electricity produced and offset it against their entire demand within a net-metering scheme. The REEL even allows the generation of electricity at a different site than where the actual consumer is located energy wheeling. Apart from off-grid installations, around 3 to 4 MWp of solar PV systems under the net-metering scheme had been realized by April 2014, with another 4 to 5 MWp pending within the application process waiting list. Source: Enabling PV in the MENA Region, The Emerging PV Market in Jordan, GIZ (2014) 14

16 Small-scale distributed generation Jordan example #1 Source: Enabling PV in the MENA Region, The Emerging PV Market in Jordan, GIZ (2014) Example No. 1 displays a plant on a warehouse in Amman with a 90-kWp PV system. The investment, made in 2013, generates around 162,000 kwh of electricity per year. The owner of the warehouse saves around JD 27,216 per year (USD 38K) over a 20-year lifetime at current prices. The payback period of the system is 4.2 years. In 2014, electricity consumers falling in the commercial tariff category usually pay between JD 0.12 and JD / kwh, depending on the amount of consumption. 15

17 Distributed generation Jordan example #2 Example #2 - This university housing project in Maan is one of the biggest systems in Jordan to date, totaling 1,028 kwp. It was installed in April 2014 and will produce around 1,900,000 kwh per year. At current electricity rates, the payback period is around 3 years, since it will save approximately JD 500,000 (705k USD) / year over 20-year grid connection contract. The current electricity tariff for this user category is up to JD per kwh. Source: Enabling PV in the MENA Region, The Emerging PV Market in Jordan, GIZ (2014) 16

18 UNDP s pioneering work on Clean DG FiT schemes Pioneering Feed-in-Tariff Scheme for Small-Scale RETs Prior to 2010, there was no framework in Mauritius that allowed small independent power producers or households to sell renewable energy back to the grid. With support from a UNDP/GEF project, the GoM developed a small-scale grid code to promote the connection of small-scale independent auto-producers to the national grid. The project supported the development of a Feed-in Tariff (FiT) scheme for small-scale distributed generation (SSDG) energy systems (up to 50 kilowatts) The initial scheme attracted over 400 applications for residential and commercial PV systems (totaling 3.8 MW of installed capacity) and over 80 applications from public, educational, non-governmental and religious organizations. As of Oct. 2014, 2.5 MW of these new green power systems had been installed and commissioned in the residential/commercial sector. 17

19 Solar applications are among the most popular UNDP/GEF-funded projects in MENA Tunisia: De-Risking Solar Investments - NAMA Support for Tunisian Solar Plan $68m Tunisia: Private Sector-Led Development of Wind $5m Morocco: Energy efficiency in buildings and transport, Solar PV pumping $40m Egypt: Waste-to-energy, rooftop solar, energy efficiency lighting, energy efficiency transport $96m Sudan: Solar PV pumping,. Promoting Utility-Scale Power Generation from Wind Energy $210m Selected UNDP Climate Mitigation/Energy National Projects Lebanon: Solar water heating, decentralized renewables Jordan: Solar water heating, decentralized renewables $14m Palestine: Decentralized solar for schools and clinics $1m Iraq: Rooftop solar PV and distributed solar power $2.3m (GEF only) UAE: LowCarbon Development and CDM $1m Saudi Arabia: National Energy Efficiency Programme $6m Yemen: Solar PV for Productive Applications (new) - $3 million 18

20 Grid-connected Small Scale Photovoltaic Systems (Egypt) approved in Jan Implementing Agency: Industrial Modernization Centre of the Min. of Industry and Foreign Trade Project budget: $3.54 million Four outputs: 1. Installation of grid-connected PV systems (4 MWp target estimated at approximately 1,500 PV systems of kwp each) largest component with $2.3 million of GEF funds allocated for financial schemes Builds on and complements the plans of EgyptERA to introduce a Guarantee of Origin (GoO) (which will allow the sale of electricity from renewable energy sources at a premium price) and a net-metering scheme to provide adequate financial incentives to the private sector to invest in small decentralized PV power generation. Financial incentive = price would consist of LE 0.67 (USD 0.095) per kwh from the net-metering scheme (being the highest residential tariff category at the moment), the anticipated value of LE 0.40 (USD 0.06) per kwh of the RE GoO certificate, and an LE 0.27 (USD 0.04) per kwh premium for 10 years to be paid by the UNDP-implemented, GEF-financed project as an upfront grant equal to LE 4,000 (USD 570) per kwp. 19

21 Grid-connected Small Scale Photovoltaic Systems (Egypt) Output #1 (cont.) eligibility requirements - Eligible applicants: Residential electricity consumers and private-sector SMEs - Amount of support: LE 4,000 (USD 570) per installed kwp to be paid as an upfront grant either to the investor (i.e. the owner of the new PV system) or directly to the system supplier after the commissioning test has been successfully passed (i.e. the quality of the installation has been verified and the system has entered successfully into operation); - Eligible size of the systems: From 2 kwp to 50 kwp - A call for investment proposals to be renewed annually for the duration of the project subject to the availability of financial resources. In order to avoid damaging stop and go dynamics, the support scheme will be subject to an annual review concerning its performance and the related need for adaptive management. 2. Policy, institutional and regulatory framework 3. Strengthening the PV technology supply and maintenance chain 4. Create a financing framework to support the development of PV systems (and renewable systems in general) replication of NEEREA 20

22 Support to Regional Center for Renewable Energy and Energy Efficiency (RCREEE) for development of 2014 AFEX, first native Arab index dedicated to monitoring and analyzing sustainable energy competitiveness. AFEX offers quantitative and qualitative analysis for key renewable and energy efficiency dimensions. Countries are ranked under 20 indicators on policies, institutional capacities, strategies and investments. 21

23 Key findings AFEX Arab Future Energy Index (AFEX) Renewable Energy 2013 Of 13 countries, five have no presence of private power producers. The supporting policies in most countries are still absent or ineffective. Less than half the countries provide policy instruments ensuring long-term power purchase agreements to private developers. Of 13 countries, only Morocco has so far been able to attract private RE investment On the positive side, almost all countries have adopted long-term technologyspecific RE targets. More than half the countries have established dedicated agencies to promote renewables. Currently there are more than 15 large-scale projects under construction with total capacity exceeding 1,550 MW, which is more than double the current installed capacity in the region. Seven countries have identified over 5,000 MW of new generation for private development. Six countries have now established RE funds to mobilize funding and accelerate the deployment of renewables. 22

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25 2030 TSP target: renewable energy at 30% of total power generation 4,075 MW 600 MW CSP Solar PV Onshore Wind 1,930 MW 1,625 MW 180 MW 630 MW 585 MW 1,545 MW 200 MW 385 MW 815 MW

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