Cost assessment for FIT, study presentation Litijska cesta 45 - PDF document

Cost assessment for FIT, study presentation Litijska cesta 45 Franko Nemac, Katarina Vertin, Aleks Jan, 1000 Ljubljana tel.: 01/586 38 70 ApE Ljubljana, Slovenija faks: 01/586 38 79 e-pošta: info@ape.si 4th workshop of the International Feed-In Cooperation 19. October 2007 Legislation for FIT and status of qualified producers � Law on Energy (1999, amended 2000, 2002, 2004, 2005, 2007); � National Energy Program (2004); � Decree on condition and process for obtaining energy license (Off.Gaz. RS, no. 21/2001, 31/2001, 66/2005) � Decree on condition for status of Qualified Producers (2001, 2002changed in 2007) � Decree on Prices and Premiums for Purchase of Electricity from Qualified Producers (2002, amended 2004, 2006). � Status of qualified producers can obtain: power plants on RES, CHP with high yield and thermo power plant Trbovlje. 1

Decree on prices and premiums for purchase of electricity from qualified producers (Off.Gaz. RS no. 75/06) Type of QPP regarding the primary Power capacity Uniform annual price energy source (€ Cent/kWh) Hydroelectric QPP Up to 1 MW inclusive 6,1 From 1 MW up to 10 MW inclusive 5,9 Biomass QPP Up to 1 MW inclusive 6,9 Above 1 MW 6,7 Wind QPP Up to 1 MW inclusive 6,0 Above 1 MW 5,8 Geothermal QPP 5,8 Photovoltaic QPP Up to 36 kW inclusive 37,4 Above 36 kW 37,4 Other QPP 12,5 Combined QPP using RES 6,7 QPP or heating plant using communal Up to 1 MW inclusive 5,3 waste From 1 MW up to 10 MW inclusive 5,0 Heating plant for district heating Up to 1 MW inclusive 5,8 From 1 MW up to 10 MW inclusive 5,6 Industrial heating plant Up to 1 MW inclusive 5,4 Regulatory Conditions for Qualified Producers � Ministry for Economy grant the status for 10 years. � Contract for selling the electricity is valid also for 10 years. � FIT’s are lowered for 5% after 5 years and another 5% after 10 years of operation. � Every 10 % of subsidy to the investment, lowers the FIT for 5 %. � FIT are normally determined every year; levelized at least for the inflation. 2

Main Bases for the RES law in Slovenia � Slovenia joined in 2007 as third country the Feed-in Cooperation organisation � Ministry for economy decided that EC demands for changes in decrees on electricity form RES, will be considered in the new Law on RES � The new law will have common regulatory framework for RES and CHP but separate tariff systems � CHP tariff system is under elaboration and research at IJS, the part for RES is in elaboration at ApE. Basis for Calcuations of new FIT Starting points: � Full load operating hours according to local natural conditions � Specific investment for each specific source � Consideration of realistic fuel and M&O costs � Amortization of investments in 10 years � Discount rate of 7% � Financing costs: � 70% commercial credit (i=7,6%) � 30 % own capital (i=5%) 3

Basis for Calcuations of new FIT(2) � Tariff validation for 10 years (purchase obligation) � System of unified purchase prices and premiums � Unified prices up to 5 MW e � Premiums over 5 MW e � Considered demands for calculation of the height of FIT: � IRR = 10% � Simple payback period below 10 years � Estimated electricity market price for 2008 is estimated at 54 €/MWh � After 5 years, government will evaluate the scheme and fixed new prices for the next 10 years. The new prices will be valid only for new power plants. Summary of presumptions for FIT calculations Specific Full- Fuel costs O&M costs investment Size classes operation hours €/kWe (€/MWh) (€/MWh) up to 50 kW 2.500 4.000 7 % of inc. 12,5 from 50 kW to 1 MW 2.200 4.000 7 % of inc. 11,0 Hydro QP from 1 MW to 5 MW 2.000 4.000 7 % of inc. 10,0 over 5 MW 1.800 4.000 7 % of inc. 9,0 up to 50 kW 7.500 12,6 8,3 fom 50 kW to 1 MW 5.000 4.500 12,6 8,3 Biomass QP from 1 MW to 5 MW 3.500 12,6 7,8 over 5 MW 3.000 4.000 12,6 7,5 up to 5 MW 1.100 1,5% inc. 20,0 Wind QP 2.200 over 5 MW 1.000 1,5% inc. 15,0 up to 5 MW 3.500 4.500 - 30,0 Geothermal QP over 5 MW 3.000 4.500 - 30,0 up to 50 kW 5.000 - 20,0 Photovoltaic QP from 50 kW to 5 MW 4.500 1.100 - 20,0 over 5 MW 4.300 - 20,0 up to 1 MW 4.500 15,0 15,0 Biogas QP from 1 MW to 5 MW 4.000 6.000 12,0 13,0 over 5 MW 3.800 12,0 13,0 Landfield QP 2.000 7.000 - 10,0 4

Hydro power plants Max. purchase Current Price in Specific Required price price GER investment increase 10 years 10 years 30 years €/kWe (c€/kWh) (%) (c€/kWh) (c€/kWh) Size classes up to 50 kW 11,57 9,67 2.500 88% 6,16 from 50 kW to 1 MW 2.200 10,2 66% 6,16 9,67 -6,65 from 1 MW to 5 MW 2.000 9,26 56% 5,94 6,65 1.800 over 5 MW 8,34 40% 5,94 6,51 4.000 full operating hours Generation costs and the value of FIT for the hydro power plant of 1 MW 5

CHP on biomass in Slovenia CHP on biomass Installed power Start of the operation (kWe) Eko Energetika, d.o.o. 2001 1.280 Tanin Sevnica d.d. 2002 1.300 Merkscha furnirnica d.o.o. 2002 700 Eko Energetika, d.o.o. 2003 980 Toplarna Železniki d.o.o. 2006 608 Novoles, lesna industrija Straža d.d. 2006 1.900 Bohor Žaga, Šentjur (trial operation) 552 Merkscha furnirnica d.o.o. (trial operation) 6.750 Total 14 MWe FIT for CHP biomass power plants Specific Max. purchase Required Current Price in price investment incre price GER Size classes 10 years ase 10 years 20 years €/kWe (c€/kWh) (%) (c€/kWh) (c€/kWh) to 50 kW 7.500 25,30 266% 6,9 10,99 from 50 kW to 1 MW 5.000 16,90 144% 6,9 10,99-8,9 Solid from 1 MW to 5 biomass MW 3.500 11,80 6,7 8,51 76% 3.000 6,7 8,03 from 5 MW 11,00 64% wastes 1 - - - - � minus 25% Wastes with biogen wastes 2 - minus 40% - - - share � Solid - 6,3 - - - � biomass Co-firing wastes 1 - - - - � minus 25% � wastes 2 - minus 40% - - - 4.000 - 4500 full operating hours Wastes 1 : wood wastes in forestry and processing industry (bark, saw dust …) without adding's Wastes 2 : wood wastes in manufacturing (wastes from grinderies, chipped waste palettes) wastes from the wood used in construction engineering 6

Wind power plants Specific Max. purchase Current Required Price in GER investment price price Size classes increase 20 years 10 years 10 years €/kWe (c€/kWh) (%) (c€/kWh) (c€/kWh) up to 5 1.100 MW 9,78 67% 5,86 8,19 - 5,18 over 5 MW 1.000 8,56 46% 5,86 8,19 - 5,18 2.200 full operating hours, O&M costs 15-20 €/MWh +1,5% of income for land use Off grid wnd power plants on Kredarica 2 x 6 kW Geothermal power plants Specific Max. purchase Current Required Price in GER investment price price Size classes increase 20 years 10 years 10 years €/kWe (c€/kWh) (%) (c€/kWh) (c€/kWh) up to 5 MW 3.500 14,83 153% 5,86 15,00 over 5 MW 3.000 13,16 14,00 125% 5,86 (up to 10 MW) 4.500 full operating hours O&M costs 30 €/MWh 7

PV power plants – on roofs Max. Specific Current purchase Required Price in GER investment price Size classes price increase 20 years 10 years 10 years €/kWe (c€/kWh) (%) (c€/kWh) (c€/kWh) up to 50 kW 5.000 71,29 90% 37,42 49,21 from 50 kW to 5 46,81 (30 - 100 kW) MW 4.500 64,36 72% 37,42 46,30 (over 100 kW) over 5 MW 4.300 61,56 65% 37,42 46,30 1.100 full operating hours PV power plants in 2007 INVESTOR Power Production Type (kWp) (kWh) Aleš Rom, Vrhnika 2 2.000 On roof Zvonko Beli, Pševo 3 3.500 On roof Punt International, Ž irovnica 20 20.000 On roof E-bajt, Kamna gorica On roof 3,5 4.200 Savske elektrarne,HE Mav č i č e- added 36 36.000 On a dam E7+ Ambro ž pod Krvavcem 5 5.000 On roof SŠTS Šiška, On roof +horiz. Elektro Ljubljana 25 25.000 + tracking Savske elektrarne, On a dam HE Vrhovo 72 72.000 (in construction) Strahovica, Gorenjske On roof elektrarne 84 70.000 (in construction) Pipistrel, Ajdovš č ina On roof 100 110.000 (in construction) TOTAL 350.5 364.000 8

Biogas and land field + sewage gas Max. Specific Current Price in Type of purchase Required investment price GER RES QP price increase 10 years 20 years Size classes 10 years €/kWe (c€/kWh) (%) (c€/kWh) (c€/kWh) 10,99- up to 1 MW 4.500 15,15 25% 12,09 8,51 Biogas from 1 MW to 13,25 8,51 5 MW 4.000 10% 12,09 over 5 MW 3.800 12,75 5% 12,09 8,03 Land field Sewage gas - 2.000 5,35 1% 5,32 9,33-8,36 6.000 full operating hours for biogas 7.000 full operation hours for land field gas and sewage Recommendations for Slovenia � Slovenia needs new, clear and ambitious goals that can be reached. � To reach 33,6 % of electricity production by RES-E up to 2010, Slovenia needs official targets in MW for each type of RES and formal obligation to achieve them. � The new feed-in law for RES has to be stable, predictable and not complicated. � The system has to support new investments capacities! There has to be clear difference between new and old ones. 9