renewable energy and mini-grids in shan state: … energy and mini-grids in shan state:...

Renewable energy and mini-grids in Shan State: technologies, possibilities, and framework

Taunggyi, Shan State, Myanmar9 July, 2016

Chris Greacen, Ph.D.

A Myanmar electricity vision

Energy access for all

Minimal social and environmental impacts from electricity generation

Reliable

Affordable

Contributes to an economy based on Shan State & Myanmar’s deep natural beauty and cultural richness

Slide 2

Overview

Slide 3

Technology Costs Policy & Regulation

Energy Efficiency

On-gridrenewables

Off-gridrenewables

Definitions

Distributed generation employs small-scale technologies to produce electricity close to end users.

Renewable energy: energy that is collected from resources which are naturally replenished on a human timescale, such as sunlight, wind, rain, biomass, geothermal heat.

Slide 4

Temperature trends 1950 to 2014

6

Definitions

Off-grid: not connected to the national electric network

On-grid: connected to the national electric network

Mini-grid: small-scale generation, supplying electricity to multiple customers via a limited distribution grid.

Slide 7

Minigrid

Resources can be marshalled

Technical assistance

Technology

Finance

Slide 8

TECHNOLOGY:EFFICIENCY FIRST

Slide 9

Insulate roofs to

keep cool in

T-5

Energy Efficiency

1.4 to 4US cents per kWh

Source: The World Bank, Impact of Energy Conservation, DSM and Renewable Energy Generation on EGAT’s PDP, 2005

California Advancing Energy Efficiency

Pacific Northwest in USA: Energy efficiency to meet over 60% of new demand, renewables most of rest

Sixth Plan Resource Portfolio

12

TECHNOLOGY:ON GRID RENEWABLES

Slide 13

Renewables share of global electricity

• Renewables accounted 28.9% of global power generation capacity and 23.7%of global electricity demand

• Renewables made up for 60% of net additions to global power capacity• Total RE power capacity: 1,849 GW, an increase of almost 9% over 2014

2013 2020 2030

Binding commitments to renewables

20%33%

50%

16

The World’s Largest Solar Thermal Power Plant

Ivanpah Solar Thermal Project – 370 MW - San Bernardino County, CA

Desert Sunlight Solar Project - 550 MW - Riverside County, CA

World’s Largest Thin Film Solar PV Project…

World’s Largest Wind Project

Alta Wind Energy Center – 1.55 GW - Kern County, California

Solar in Thailand

Over 2.5 GW as of 2015

Slide 20

Solar PV

Capacity added: +50 GW

Total capacity:

227 GW

Annual PV market in 2015 was nearly 10 times the world’s cumulative solar PV capacity of a decade earlier

Myanmar

installed

capacity all

power plants

3.5 GW

Low solar bid prices (2013-2016)

Slide 22

800 MW solar plant in Dubai

US 2.99 cents per kWh

Expected natural gas based generation

cost in Myanmar (105 kyat/kWh = 8.8

US cents) (Deloitte, 2016)

Solar PV,

unsolicited

bid ACO

US 13

cents/kWh

Zambia solar PV bidding winner

25 year fixed price US 6.02 cents/kWh50 MW project. World Bank Scaling Solar program

Solar farm lead time

Pre-construction

• Site selection

• Resource evaluation

• Interconnection

• Permitting

• PPA negotiation

Construction

• Module supply agreement

• Constructing solar farm

6 to 36 months

3 to 12

months

Thai electric load profile

Slide 24

Solar output

Wind power in Thailand

235 MW as of May 2015

Cost of production – as low as 6 US cents/kWh

Wind Power

Wind power was the leading source of new power generating capacity in Europe and the United States in 2015, and the second largest in China

Wind power is playing a major role in meeting electricity demand in an increasing number of countries, e.g.:

➜ Denmark: 42% of demand

➜ Uruguay: 15.5%

Wind potential, Myanmar

MOA for 30MW wind project (Three Gorges Corporation) in Ayeyarwady Region

19 projects, 4032 MW in planning stages

Source:

http://www.mmtimes.com/index.php/business/19343-moep-

signs-first-wind-power-deal.html

Biomass

Slide 28

Sugar cane

Rice husk

Rubber wood

Thailand: 3266 MW

Large renewables and transmission

Smaller renewables and transmission

Slide 31

POLICIES AND REGULATION – ON GRID

On-grid policies

Policies to think about

• Integrated Resource Planning (IRP)

• “Selecting the option that meets needs at lowest cost –including environmental and social costs”

• Feed-in tariffs

• Energy efficiency or renewable energy targets

Slide 33

National Electrification Program (NEP)

Goal: 100% electricity access by 2030

First 5 years: $400 Million IDA loan from World Bank

• $300 Million grid expansion – MOEE + $10 Million technical assistance

• $80 Million off-grid – DRD + $10 Million technical assistance

34

Uganda GETFiTGlobal Energy Transfer Feed-in Tariffs

Uganda utility REFiT

Donors:

• Norway, Germany, UK and EU

• pay GETFiT premium

• Provide risk guarantees

• Provide technical assistance

Slide 35

Uganda GETFiT

Results:

• Leverage $400 million private financing

• Up to 20 projects 170 MW

Slide 36

Electricity regulator

Does not (yet) exist in Myanmar

“Referee” who looks after interests of citizens

• Reviews power development plans

• Ensures investments by utilities are prudent

Independent (not part of government)

Authority to:

• Grant/withhold licenses

• Approve/reject tariffs

Slide 37

TECHNOLOGYOFF-GRID

Slide 38

Biomass -- offgrid

40

Royal Htoo Linn Manufacturing Co., Ltd

Sittwe,Rakhine State

3MW Nam Khun, Kyaing Tong Kyi Thien Family Co. & Kyaing Tong Energy Co., Ltd.

Myaing village hydro

42

Hydro near Pinluang, Shan State

Myanmar Small Hydro potential

100 projects < 1 MW identified

Many more exist, as yet unidentified…

Slide 44

Hydro flooding impact: big versus small

Source: Natel Energy

•Mae Kam Pong, Chiang Mai, Thailand

•Built by government & community

•40 kW

•Used to be off-grid;

•Making arrangements to sell electricity to grid

Mwenga 4 MW hydro

Tanzania800 households in 15 villages (expanding to 4000) & sells to the grid

POLICIES AND REGULATION – OFF GRID

Off-gridNational Electrification Program (NEP)

$80 Million off-grid – DRD (+$10M TA)

• Mostly solar home systems

• ~ $7 million to support mini-grids

• 60% subsidy + 20% village payment + 20% developer (?)

• First call for proposals

49

Needed: mini-grids regulatory framework

Mini-grid developers reluctant to build because

• Concerned that grid may arrive faster than expected, and all customers shift over to main grid.

• Concerned that competitors might steal good sites (especially an issue when subsidies start to be available)

• Lack of clarity about whether cost-reflective tariffs can be charged.

Customers need confidence that:

• Mini-grid is safe

• Power is reliable

• Not too expensive

Slide 50

Suggested elements of a mini-grid regulatory framework

Up to date maps of the existing grid and mini-grids shall be made available on-line to the public

Licensing:

• Streamlined for projects < 10 MW

• Voluntary for projects < 1 MW

• Provisional license: legal right to reserve a site subject to demonstrating progress

Tariffs: permission to charge cost-reflective tariffs

Options when main grid arrives

Slide 51

Mini-grids and the Arrival of the National Grid

Large Plants

Customers

Mini-Grid

Customers

NationalGrid

Small Power Producer

M

M

M

Key: = power from utility = power from SPP = meterM

M

M

M

Before the grid arrives

53

Small Power Distributor (SPD)

54

Large Plants

NationalGrid

Customers Customers

Mini-Grid


M

M

M

MM

M

M


Large Plants

NationalGrid

Customers


Customers

Mini-Grid

M

M

M

MM

M

M


Small Power Producer (SPP)

55

$

Small Power Producer (SPP) regulations

Thai “Very Small Power Producer” documents : www.eppo.go.th/power/vspp-eng/index.html

Tanzania “Small Power Producer” documents: www.ewura.go.tz/sppselectricity.html

http://www.eppo.go.th/power/vspp-eng/index.html

http://www.ewura.go.tz/sppselectricity.html

Both SPP and SPD

58

Tariffs for Bulk Sales and Purchases

Tariffs for Bulk Sales by the SPP

1. Buyer’s (utility’s) avoided cost,

2. seller’s cost

3. bid price

Tariffs for Bulk Purchases by the SPP

• For backup or supplemental power

• Energy charge and demand charge

59

Who pays for premiums above

buyer’s avoided cost?

Large Plants

NationalGrid

Customers

Small Power Producer(may operate as emergency

backup plant)

Customers

but with backup electricity provided by old generator

Mini-GridM

M

MM

M

M


Buyout option

60

Co-existence

Slide 61

Large Plants

NationalGrid

Customers Customers

Extension of

NationalGrid


Assets abandoned

62

FINANCING

Financing

grants

equity

debt

guarantees

insurance

results-based financing

carbon financing

Slide 64

Renewable energy funds

Slide 65

Infra Capital Myanmar

Slide 66

Funded by UK Department for International Development (UKAid)

Purpose: de-risk sustainable infrastructure

Micro-finance

Slide 67

Summary

Most new electricity investments worldwide are renewable.

Clean renewable energy makes sense for Myanmar

On grid renewable energy – a strong transmission and distribution system can accommodate affordable renewable energy into the country’s mix

Off-grid renewables energy – good solution in rural areas where the grid doesn’t reach.

• Off-grid mini-grid can become “on-grid” when grid arrives

Technical assistance, technology & finance available

Policy and regulatory framework

• IRP, Mini-grid/SPP policy Slide 68

Thank you

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renewable energy and mini-grids in shan state: … energy and mini-grids in shan state:...

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