project example on easter island - solarwirtschaft · [email protected] project office mena...

Financing of medium-sized renewable energy projects

Project example on Easter Island

Dr. Karsten Schulte

Off-Grid Power Conference and Exhibition at the Intersolar Europe 2019

Munich, May 16th, 2019

2 © KRAFTWERK Renewable Power Solutions GmbH

- Off-Grid Power Conference, Intersolar Europe, Munich 2019 -

KRAFTWERK Renewable Power Solutions ...

… is a German EPC company with global presence in:



The 3 “Ds” of energy transition

Decarbonization Decentralization Digitalization

Main finding at energy transition dialogue 2019 in Berlin: WE MUST IMPLEMENT NOW!

Stop all subsidies

for fossil fuels

Implement medium-sized

renewable power projects

close to the consumer

Support establishment

of new business models

KRAFTWERK´s focus for years



Showcase Hotel on Rapa Nui (Easter Island) –

Current situation

One of World´s Most Isolated

Locations

+2,500

Guests p.a.

3

Diesel Gensets Off-Grid System

+300,000 Liters

of Diesel Demand p.a.

+920 MWh

Electrical Demand p.a.

Showcase Rapa Nui



Future solution: Off-Grid PV-Battery-Hybrid system

During the day, the PV plant

generates sufficient energy to

cover the electrical demand and,

additionally, charge the batteries

to supply further renewable

energy during hours without sun

The System

Scalable PV Plant

Li-Ion Battery System

Diesel Gensets

EMS (Energy Management System)

PV Plant: 516 kWp Specific yield: 1,495 kWh/kWp

Battery capacity: 996 kWh Battery inverter: 300 kVA

Diesel gensets: 3 x 275 kVA

EMS

Total Demand: 920 MWh/a Peak load: 258 kW

Showcase Rapa Nui



Genset shutdown pareto - Hours per day

Showcase Rapa Nui



Expected performance and savings

413

MWh

248

MWh

261

MWh

922

MWh

72 % Renewable

Share

Base Case

w/o PV-Battery

Improved Case

with PV-Battery

Supplied by

diesel gensets

Supplied by PV

via batteries Supplied by PV

directly

Average

13 hours

of genset shutdown per day

Savings:

220,000 liters

of diesel per year

Avoiding:

600 tons

of CO2 emissions per year

System Configuration:

PV Plant: 516 kWp, Battery capacity: 996 kWh; Battery inverter size: 300 kVA

Showcase Rapa Nui



Simulated system behavior in detail

PV Generation (kW) Battery Discharge (kW) Diesel Generation (kW)

Demand (kW) Battery Charge (kW)

01.01.

02.01.

03.01.

04.01.

05.01.

06.01.

Po

we

r (k

W)

Hours of the day

07.01.

Solar Share: 72%

= 𝑆𝑜𝑙𝑎𝑟 𝑒𝑛𝑒𝑟𝑔𝑦 𝑢𝑠𝑒𝑑 𝑏𝑦 ℎ𝑜𝑡𝑒𝑙

𝑇𝑜𝑡𝑎𝑙 𝑒𝑙𝑒𝑐𝑡𝑟𝑖𝑐𝑎𝑙 𝑑𝑒𝑚𝑎𝑛𝑑

Battery Usage Ratio: 76%

= 𝐴𝑛𝑛𝑢𝑎𝑙 𝑏𝑎𝑡𝑡𝑒𝑟𝑦 𝑖𝑛𝑗𝑒𝑐𝑡𝑖𝑜𝑛 𝑡𝑜 𝑚𝑖𝑐𝑟𝑜−𝑔𝑟𝑖𝑑

𝐵𝑎𝑡𝑡𝑒𝑟𝑦 𝑐𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑥 365 𝑥 0,9

Exemplary weekly load profile:

Self-Consumption Rate: 86%

= 𝑆𝑜𝑙𝑎𝑟 𝑒𝑛𝑒𝑟𝑔𝑦 𝑢𝑠𝑒𝑑 𝑏𝑦 ℎ𝑜𝑡𝑒𝑙

𝑇𝑜𝑡𝑎𝑙 𝑠𝑜𝑙𝑎𝑟 𝑒𝑛𝑒𝑟𝑔𝑦 𝑔𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑

Showcase Rapa Nui



Chosen business model: Power Purchase Agreement (PPA)

PPA terms

PPA contract in combination with another Hotel site in San Pedro de Atacama, Chile

Price in US$/kWh

1% p.a. price increase

Take-or-Pay

20 years long-term contract

Benefits investor

8% project return

14 - 16% IRR before tax on

20% equity with local financing

Benefits offtaker

> US$ 1 million

accumulated savings

600 tons annual CO2 savings

Showcase Rapa Nui



High number of medium-sized projects with 8 - 15% project

return

Etc.

Costa Rica: 2.2 MWp for municipality

Russia: 1 MWp PV-Diesel Hybrid for remote municipality

Germany: 300 kWp for farming site

Peru: 1.2 MWp for shopping mall

Germany: 750 kWp PV for manufacturing site

Egypt: 800 kWp PV-Diesel Hybrid for Hotel ressorts

Chile: 250 kWp PV for farming site

Chile: 720 kWp PV for cooling house

Tunisia: 410 kWp PV for agricultural site

Chile: 800 kWp PV-Battery-Hybrid for water treatment facility

Chile: 220 kWp PV-Battery-Hybrid for Hotel ressort

Chile: 516 kWp PV-Battery-Hybrid for Hotel ressort

Project Pipeline with PPA or Lease-to-Own models Investors’ concerns

Offtakers

reliability Size

8 - 15% project return

through 20 years

Bundle projects

and

mitigate risks



Business area with gigawatts potential still to be developed

High potential/

to be accelerated ()

Non-utility scale Utility scale

“Decentralized

projects”

“Centralized

projects”

“Feed-in tariffs”

“Private offtakers”

Area of

highest returns

Rising

Declining



Transfer of single projects into a portfolio

SPV 1

Operating projects 20 - 40% equity

from investors

Return perspective

of ≥ 6%

Timeline 10 years

Loan for portfolio

Interest rate of

≤ 5%

Long term loan of

≥ 12 years

Equity Loan

Balanced mix of equity and loan as investment options

Portfolio

Investment fund of minimum US$ 50 million

Return expectations to be met

including project failure rate scenarios

Full equity input to start first projects

Project-individual loans from local banks if suitable

Local

loans



Criteria for project success

Standardized due diligence (careful selection of offtakers)

Contracts in stable currency

Operation & Maintenance in place (local presence or local partners required)

Calculation of risk scenarios

Solid payment guarantees from offtaker are of help

Plant shall be easily removable

Centralized monitoring/ plant control



Summary – Acceleration of energy transition highly needed

Projects Investors’ money Loan support

Many

Offtakers already

know the benefits

Waiting

High demand for

green investment

Upcoming

Long-term,

cross-border financing

Project Office Frankfurt

Deutschherrnufer 32, 60594 Frankfurt, Germany

Tel +49 (69) 8720 5501 Fax +49 (69) 8720 5503

[email protected] www.kraftwerk-rps.com

Project Office MENA

Building 170, Street 28, 5th District New Cairo, Egypt

Tel +202 2618210


Project Office Chile

Avenida Providencia 1939 Of.42, Santiago, Chile

Tel +56 (2) 32331128


Project Office Berlin

Wilhelminenhofstraße 75, 12459 Berlin, Germany

Tel +49 (30) 51303814 Fax +49 (69) 8720 5503


project example on easter island - solarwirtschaft · [email protected] project office mena...

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