feed-in tariffs and south-south policy/technology transfer: the evolution and implementation of very...
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Feed-in tariffs and south-south policy/technology transfer: The evolution and implementation of Very
Small Power Producer (VSPP/SPP) Regulations in Thailand and Tanzania
Monterey Institute for International StudiesMonterey, California, USA
8 May 2010
Chris [email protected]
Palang Thai พลั�งไท
• Thailand NGO• Objective:
– To ensure that the transformations that occur in the region's energy sector: augment, rather than undermine, social and environmental justice and sustainability.
• Key approaches:– We teach hands-on energy technology– We draft / comment on policies– We work to empower citizens to look critically at government
and industry projects and plans– We advocate structural reform
พลั�ง (palang): n 1. Power. 2. Empowerment. ไท (thai): adj. 1. Independence. 2. Self-reliance
Can’t we hook it up and sell power back?
Mae Kam Pong village microhydro
Meeting between National Energy Policy Offic (NEPO) and Mae Kam Pong villgers to discuss grid interconnection of their village micro-hydro
$
Technical regulations:• Allowable voltage,
frequency, THD variations
• Protective relays– 1-line diagrams for all
cases:• Induction• Synchronous• Inverters• Single/multiple• Connecting at different
voltage levels (LV or MV)
• Communication channels
Commercial regulations:• Definitions of renewable
energy, and efficient cogeneration
• Contract parties• Cost allocation• Principle of standardized
tariff determination• Invoicing and payment
arrangements• Arbitration
$
+ Standardized Power Purchase Agreement (PPA)
Import(3%)
EGAT(45%)
IPPs(42%)
Generation(% share)
Transmission
Distribution
EGAT (100%)
PEA(66%)
MEA(32%)
Direct Customers(2%)
Users Users
SPPs(10%)
Thailand’sElectricity Industry Structure
Import(3%)
EGAT(45%)
IPPs(42%)
Generation(% share)
Transmission
Distribution
EGAT (100%)
PEA(66%)
MEA(32%)
Direct Customers(2%)
Users Users
VSPPs(<1%)
SPPs(10%)
Thailand’sElectricity Industry Structure
Import(3%)
EGAT(45%)
IPPs(42%)
Generation(% share)
Transmission
Distribution
EGAT (100%)
PEA(66%)
MEA(32%)
Direct Customers(2%)
Users Users
VSPPs(<1%)
SPPs(10%)
Thailand’sElectricity Industry Structure
Firm / non-firm Peak / off-peak
Evolution of Thai VSPP regulations• 2002
– VSPP regulations drafted, approved by Cabinet– Up to 1 MW export, renewables only– Tariffs set at avoided cost (bulk supply tariff + FT)
Biogas from Pig Farms
Reduces air and water pollution
Produces fertilizer
Produces electricity
8 x 70 kW generator
Ratchaburi
Biogas from Pig Farms
•40 kW•Mae Kam Pong, Chiang Mai, Thailand
Micro hydropower
• Uses waste water from cassava to make methane
• Produces gas for all factory heat (30 MW thermal) + 3 MW of electricity
• 3 x 1 MW gas generators
Korat Waste to Energy – biogas… an early Thai VSPP project
Evolution of Thai VSPP regulations• 2002
– VSPP regulations drafted, approved by Cabinet– Up to 1 MW export, renewables only– Tariffs set at avoided cost (bulk supply tariff + FT)
• 2006– Up to 10 MW export, renewables + cogeneration– Feed-in tariff “adder” – If > 1 MW then utility only pays for 98% of energy
Rice husk-fired power plant• 9.8 MW• Roi Et, Thailand
Bangkok Solar 1 MW PV
• Project size: 1 MW• Uses self-manufactured a-Si
Evolution of Thai VSPP regulations• 2002
– VSPP regulations drafted, approved by Cabinet– Up to 1 MW export, renewables only– Tariffs set at avoided cost (bulk supply tariff + FT)
• 2006– Up to 10 MW export, renewables + cogeneration– Feed-in tariff “adder” – If > 1 MW then utility only pays for 98% of energy
• 2009– Tariff adder increase, more for projects that offset diesel
http://www.eppo.go.th/power/vspp-eng/ for English version of regulations, and model PPA
Thai VSPP feed-in tariffs
Assumes exchange rate 1 Thai baht = 0.029762 U.S. dollars
Fuel Adder Additional for diesel offsetting areas
Additional for 3 southern provinces
Years effective
Biomass Capacity <= 1 MW $ 0.015 $ 0.030 $ 0.030 7 Capacity > 1 MW $ 0.009 $ 0.030 $ 0.030 7
Biogas <= 1 MW $ 0.015 $ 0.030 $ 0.030 7 > 1 MW $ 0.009 $ 0.030 $ 0.030 7
Waste (community waste, non-hazardous industrial and not organic matter)
Fermentation $ 0.074 $ 0.030 $ 0.030 7 Thermal process $ 0.104 $ 0.030 $ 0.030 7
Wind <= 50 kW $ 0.134 $ 0.045 $ 0.045 10 > 50 kW $ 0.104 $ 0.045 $ 0.045 10
Micro-hydro 50 kW - <200 kW $ 0.024 $ 0.030 $ 0.030 7 <50 kW $ 0.045 $ 0.030 $ 0.030 7
Solar $ 0.238 $ 0.045 $ 0.045 10
Tariff = adder(s) + bulk supply tariff + FT chargeBiomass tariff = $0.009 + $0.049 + $0.027 = $0.085/kWh
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2323การไฟฟ�าส่�วนภู�มิ�ภูาคการไฟฟ�าส่�วนภู�มิ�ภูาค
การไฟฟ�าส่�วนภู�มิ�ภูาคPROVINCIAL ELECTRICITY AUTHORITY
Generating Capacity supply to Grid from 2006 - August 2009
VSPP project pipeline as recorded in EPPO data
Application under consideration
Permission received, awaiting
PPAPPA signed
Generating & selling electricity
Leakage (Project abandoned)
Jun 2009
Thailand VSPP Status
Dec 2009
Thailand VSPP Status
Mar 2010
Thailand VSPP Status
Mar 2010
Thailand VSPP Status
811 MW online
Mar 2010
Thailand VSPP Status
811 MW online
PPAs signed for additional 4159 MW
Import(3%)
EGAT(45%)
IPPs(42%)
Generation(% share of GWh)
Transmission
Distribution
EGAT (100%)
PEA(66%)
MEA(32%)
Direct Customers(2%)
Users Users
VSPPs(<1%)
SPPs(10%)
… but it’s still a tiny part of Thailand’s electrical energy
Evolution of Tanzania SPP regulations
• Approved by regulator August 2009• Up to 10 MW export, renewables &
cogeneration• SPP Tariffs at average of LRMC and SRMC
– Grid-connected SPP tariff (2009): $0.066/kWh– In rural mini-grid areas offsetting diesel (2009):
$0.26/kWh
• 5 PPAs signed by March 2010
www.ewura.go.tz/sppselectricity.html for English versions of regulations, and model PPAs
Wealthy countries pay Feed-in tariff incremental costs?
GET FiT proposed mechanism
South-south policy/technology transfer:Technical Visit of the Delegation
from the United Republic of Tanzania to Thailand regarding
Thailand’s Very Small Power Producer (VSPP) program 13-20 March 2010
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4040การไฟฟ�าส่�วนภู�มิ�ภูาคการไฟฟ�าส่�วนภู�มิ�ภูาค
การไฟฟ�าส่�วนภู�มิ�ภูาคPROVINCIAL ELECTRICITY AUTHORITY
How we have done?
SubmittedProposals
•Line connecting construction•Meter installation
•Meter reading•Billing
AcceptanceLetter
PPA signed First synch. COD Every 1ft
•Meter reading
•license check•All test
•PPA Check
•Document check•Identify circuit connection•System study
•All license check
VSPP will get first settlement within 3 month after COD.
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4141การไฟฟ�าส่�วนภู�มิ�ภูาคการไฟฟ�าส่�วนภู�มิ�ภูาค
การไฟฟ�าส่�วนภู�มิ�ภูาคPROVINCIAL ELECTRICITY AUTHORITY
Who have involved in PEA ?
DG office• Technical & System Analysis
• Document• Coordinator
Research Div.•PQ test
Relay Div.•Switchgear &
Relay test
Meter Div.•Meter installation
System Operation Div.•First synch. test System Operation Area
Office 1-12•Identify circuit connection
•Control & Operation•Communication
Area Office 1-12 & Local Office
•Line connecting construction•Meter reading
Tariff Div.•Billing
Finance Dep.•Settlement
Legal Div.•PPA check
Thailand
VSPP
Tanzania
Vietnam?
Philippines?
Winter 2010-11 … community built, community-owned, profitable VSPP
micro-hydro in Thailand
http://www.soho-properties.com/condobangkok-leraffine31/
Unlimited living?
Office of the National Economic and Social Development Board
O F F I C E O F T H E P R I M E M I N I S T E R
Low Quality
Education Low Quality labour
Insu
fficient in
R&
D
Investm
ent
Slow Technology Development
Lo
w Q
ual
ity
for
Raw
-
mat
eria
l, m
ach
iner
y an
d
equ
ipm
ent
(Low margin/return)
Low
Bas
ic
infr
astr
uctu
re a
nd
Logi
stic
dev
elop
men
t
Enabling factors:MACROECONOMICMANAGEMENT
No
im
mu
nit
y/
Hig
h v
ola
tili
ty
Fin
anci
al
Sys
tem
La
ck o
f S
avin
g
Lack of regulation on
industrial product’s
quality control
Low
Value Creation
High Import Contents & Sheer size
of export to GDP
High Energy Intensity& Low Efficiency& Unsustainable
structure
Macroeconomic Analysis
Electricity productionand consumption(GWh)
1700 families relocated
Loss of livelihood for > 6200 families
Loss of 116
fish species 44( %)
Fishery yield down 80%
65MaeHongSong
Sou
rce: M
EA
, EG
AT, S
earin
, Gra
ph
ic: Gre
en
World
Fou
nd
atio
n
Dams Malls Province
Pak
Mun
Impacts of Pak Mun Dam alone
Bonok-Ban Krud story
Bonok Bankrud
Power Demand: Projections vs. Actual 1992 – 2009If no systemic bias, the chance of over-projecting
demand 15 times in a row = (½)15 = 1/32,768MW
8,000
12,000
16,000
20,000
24,000
28,000
32,000
36,000
40,000
44,000
48,000
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
มิ.ย.-93
ธ.ค.-94
ต.ค.-95
เมิ.ย.-96
ต.ค.-96
มิ.ย.-97
ก.ย.-97
Sep-98(MER)
ก.พ.-01
ส.ค.-02
Jan-04(LEG)
Jan-04(MEG)
Apr-06 (MEG)
มิ�.ค.-07
ACTUAL
ธ.ค.-08
0
5
10
15
20
25
30
35
40
45
J AN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC J AN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC J AN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Res
erve
Mar
gin
(%)
2007 2008 2009
E x c e s s c a p a c i t y
Generation capacity in excess of demand (2007-2009)
Fictional power demand did lead to real investments that become waste & burden
(not to mention disturbed ecology, communities)
Excess gas/ pipeline capacity/
generation capacity
economic waste + excess burden for
consumers
Under centralized monopoly structure
Source of data: EGAT 2010.หมิายเหต� ค�านวณจากก�าลั�งผลัตตดต��งแลัะความิต�องการไฟฟ#าส$งส�ดรายเด%อน
Very little incentives to do energy efficiency/conservation
Linear versus exponential extrapolation
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
Pea
k d
eman
d (
MW
)
2007 Forecast Historic peak demand trend
24 power plants
Fuel mix in power generation - power development plan 2007GWh
Import
NukeRE
Gas
Coal
LigniteHydro
PDPs of the Pacific Northwest, USA
Source: Seattle City Light
Concluding thoughts• VSPP regulations enable small generators together to
profitably make substantial contributions to electricity generation.
• Zero / small carbon footprint• Useful for decreasing diesel expenditures for rural
electrification• VSPP projects help develop local engineering / project
development capacity.• South-South policy/technology exchange• English versions of regulations available online• Still a drop in the bucket in Thailand… IRP needed
Thank you
This presentation available at:www.palangthai.org/docs
VSPP regulations available at:http://www.eppo.go.th/power/vspp-eng/
And www.ewura.go.tz/sppselectricity.html