for the Sustainable Energy for All (SE4All) Initiative - Solar Corridor Support Programme - Project funded by the European Union EuropeAid/Development Cooperation Instrument DCI-ENV/2013/335-152 This project is funded by the EU and implemented by a consortium led by MWH
Objective, resources and implementation calendar Objectives of the assignment: Analysis of the West Africa Solar Corridor and the required investments under technical and economic considerations as part of the West Africa Clean Energy Corridor (WACEC) Identification and specification of appropriate support measures providing assistance to ECOWAS Member States in preparing and implementing their solar electricity generation programmes with the objective to speed-up the implementation process by removing barriers and impediments. Resources: In total 7 person-months (energy planning, solar power systems, electricity networks, economics and financing, institutional expert, GIS development) Implementation calendar: Start: August 2016 / End: November 2016 2
Regional coverage ECOWAS countries will be covered by the project work: Review of relevant solar technologies and framework conditions Solar zoning exercise Strategy and support programme Solar corridor countries (Sahel / tropical region of Western Africa with high potential for grid-connected solar power plants): Regional strategy relevant grid-connected capacities Planning, implementation and back-up requirements Cost assessment and financing considerations Strategy and support programme Integration into the West African Clean Energy Corridor (WACEC): Solar, hydro, wind, biomass 3
Scope of work: Part 1 Solar corridor analysis and accompanying technical and economic considerations Solar electricity generation targets (AA) Ongoing project development implementation - operation Scope of work of a West Africa Solar Masterplan Solar technology mix Assessment of technical and economic potential (GIS Zoning) Reserve capacity requirements management of intermittencies Network development Cost-estimate Economic and financial considerations Legal and institutional requirements 4
Scope of work: Part 2 West Africa Solar Corridor Support Programme Implementation strategy for the corridor support programme West African Clean Energy Corridors (WACEC): Solar, hydro, wind, biomass National Governments ECOWAS and specialized agencies International technical and financial cooperation Guiding principles for the support programme Corridor support programme components GIS Zoning Planning and technical analyses Enabling environment Financing Capacity building Integration into future cooperation initiatives (such as EU RIP) 5
Presentation of work in progress Solar technologies GIS development and zoning Electricity planning Case study Ghana Generation and reserve requirements Economic and financial considerations Enabling environment of investments in Solar PV/CSP Areas for Harmonization - 6
Solar technologies Large-scale solar generation projects (PV and CSP) of regional importance in the range from 20 to150 MW of special interest for WAPP embedded in the transmission grids at voltage levels above 50 kv Decentralized solar generation projects integrated in the distribution grids below 50 kv (only for PV below 10 MWp) Stand-alone and non-interconnected systems such as: Mini-grids for communities >30 km away from the grid Stand-alone systems for settlements with population density below 100 people Small solar home systems and solar powered appliances for dispersed people 7
GIS development and zoning (1) Goal: to provide ECREEE with a set of tools, data and maps as a support to the evaluation of potentialities for development of RE in ECOWAS countries Development of tools for GIS data processing: Exclusion areas Land suitability for PV on-grid, PV off-grid and CSP systems Technical Potential Computation of LCOE The tools will allow to re-compute each map based on different sets of exclusion criteria, thresholds, assumptions and unit costs 8
GIS development and zoning (2) Methodologies based on previous works carried out by IRENA and by University of Geneva All tools are going to be developed using open source software Set up of scenarios for different time horizons (2016, 2020 and 2030) 9
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Energy planning Case study Ghana (1) Indicative work for Ghana is presented here and it is based on : WAPP masterplan extended to 2030(WAPP-IRENA study)- results for Ghana regarding electricity demand up to 2030, peak load demand up to 2030 Solar energy penetration up to 2020 based on National Renewable Energy Action Plan Renewable Energy Master Plan for Ghana (in progress), Energy Commission, for the period 2020-2030 15
Energy planning Case study Ghana (2) The approach followed : WAPP masterplan extended to 2030 is considered for electricity demand and peak load demand The masterplan is corrected by replacing conventional plants with the solar plants foreseen in the National Renewable Energy Plans up to 2030 An aggregated assessment of the roadmap of the power system generation technologies up to 2030 is derived including Ghana s indicative contribution for the solar corridor Load following reserve is estimated for the year 2030 together with storage requirements 16
Energy planning Case study Ghana (3) Presentation of indicative results for the assessment of solar systems penetration by 2030 : Generation Mix including solar plants 17
Ghana Reference scenario Reference scenario + solar corridor Grid connected Capacity 2015 2020 2025 2030 2015 2020 2025 2030 Biomass 0 0 793 1000 0 0 793 1000 Coal 0 0 0 0 0 0 0 0 Gas 1687 1687 1687 2832 1686 1686 1686 2724 Hydro 1386 1386 1386 1386 1386 1386 1386 1386 Oil 385 385 85 85 385 385 85 85 PV 10 10 10 10 17 200 345 500 Wind 150 150 150 150 150 150 150 150 Solar Thermal 0 0 0 0 0 0 0 0 18
Ghana Reference scenario Reference scenario + solar corridor Grid electricity Production 2015 2020 2025 2030 2015 2020 2025 2030 Biomass 0 0 3478 4383 0 0 3478 4383 Coal 0 0 0 0 0 0 0 0 Gas 12725 10482 10509 16120 12719 10175 9963 15318 Hydro 3720 3720 3720 3720 3720 3720 3720 3720 Oil 0 0 0 0 0 0 0 0 PV 22 22 22 22 28 329 568 823 Wind 329 329 329 329 329 329 329 329 Solar Thermal 0 0 0 0 0 0 0 0 Net Electricity Imports -2565 4027 6439 8057-2565 4027 6439 8057 System Peak 2523 3030 3893 5153 2523 3030 3893 5153 2015 2020 2025 2030 2015 2020 2025 2030 Final Electricity Demand 12025 16473 21952 29519 12025 16473 21952 29519 Net Imports of electricity -2565 4027 6439 8057-2565 4027 6439 8057 19
Energy planning Case study Ghana (4) Presentation of indicative results for the assessment of intermittencies due to solar systems penetration by 2030: 1. Indicative requirements for fast reserve for load balancing 2. Indicative storage reserve requirements to avoid curtailment 20
Reserve (MW) Energy planning Case study Ghana (5) Indicative hourly reserve requirements for Ghana for the year 2030 Reserve Requirments 2030 1000 800 600 400 200 0-200 1 1001 2001 3001 4001 5001 6001 7001 8001-400 -600-800 -1000 Time (hr) Upward Downward 21
Load (MW) Energy planning Case study Ghana (6) Monthly residual load curves of electricity demand in Ghana after excluding PV generation(convolution of PV generation curves) and imports for the year 2030 Residual Load (No Imports Inc) 2030 3000 2500 2000 1500 1000 500 0-500 January March June September 0 100 200 300 400 500 600 700 800 Time (hr) storage reserve required is derived from the residual load curves and the thermal minimum of thermal plants 22
Energy planning Case study Ghana (7) Overall planning approach : Areas derived from the zoning work have low LCOEs and they are close to Load centres to minimize the grid construction costs Areas chosen from the zoning work correspond to the generation capacity included in the generation roadmap derived from the combination of the WAPP masterplan with the solar penetration of the NREAPs Evaluation of the needs for reserves for balancing and storage will be performed Evaluation of the existing grid expansion programme to assess whether or not the power flows that correspond to the solar corridor can be transmitted by the foreseen grid will be performed 23
Economic and financial considerations (1) Economic and financial approach is based on the following issues: Specific inputs: Installed capacity for each country (MWp/country) Investment schedule for each country CAPEX (Eur/year/country) Annual energy production per country (MWh/year/country) Annual full operational hours (specific for each country or site) Capacity factor (estimated as number of full operational hours/8760) Discounting rate: 10% Electricity own consumption (MWh/year/country) Current price of electricity per each country (Eur/MWh) CPI (Cost Price Index) for Solar corridor countries 24
Economic and financial considerations (2) Economic and financial approach (cont.) All calculations will be performed in Eur, without VAT Operational Costs estimation OPEX general assumptions: Operating costs incl. salaries: 10-18 Eur/KWp Energy own consumption (Eur/year) Insurance premium: 0.3% of the investment value Spare parts: 0.25% of the investment value Land lease: 0.0 Eur/year Commercial management: 1.0 Eur/kWp Administrative expenses: 3% of operating costs Linear constant depreciation (20 years lifetime) Financial costs depending on the financial scheme 25
Economic and financial considerations (3) Economic and financial approach (cont.) Estimation of the optimal funding scheme Equity Subsidies Grants Loans from different sources (commercial banks, WB, EIB, AfDB etc) Minim ROE = 15%; Minim DSCR = 1.1 Estimation of unitary cost (Eur/MWh) per country Estimation and comparison of LCOE (related to each country) Financial risk assessment Risk matrix and Risk Control Plan 26
Enabling environment of investments in Solar PV/CSP Areas for Harmonization - Policy, planning and legislation Policy and Panning Legal and Regulatory Framework State Support Licensing and procurement procedure IPP and PPP Frameworks Procurement Procedure Licenses and Permits Regime Tariffs Methodology Technical standards Equipment Manufacture/Import Codes Model contracts PPAs Connection Agreements Transmission Service Agreements Dispute resolution Internal Dispute Procedure Appeals Process 27
Many thanks for your attention! Martin Ehrlich EU TAF Key-expert (mpgehrlich@aol.com)