Feed-in Tariff for Wind and Solar Energy in Egypt

Transcription

1 2 ND JOINT ECRB MEDREG ROUNDTABLE THE ROLE OF REGULATORS IN PROMOTING INVESTMENTS Feed-in Tariff for Wind and Solar Energy in Egypt Eng. Marwa Mostafa Athens Sep. 2015

2 Contents Overview of the RE Mechanisms in Egypt Feed-in Tariff for Wind and Solar I. Feed-in Tariff Decree II. III. Feed-in Tariff for Wind Feed-in Tariff for PV IV. Process Outline.. Licenses, Agreements & Permits V. Legislative, Regulatory & financial Challenges

3 RE Mechanisms in Egypt Law No. 203 for year 2014 The law states four mechanisms: o Power plants built by New and Renewable Energy Authority (NREA) o Competitive Biding issued by the Egyptian Electricity Transmission Company (EETC) o Feed-in Tariff o Commercial Scheme where generators conduct bilateral contracts directly with customers and EETC is contracted only for transmitting the generated electricity 3

4 RE Mechanisms in Egypt Projects Ownership Off taker RE Type/ Capacity Status Price $ cent/kwh State Owned projects Competitive Biding Projects (BOO) NREA EETC Wind 750 MW 7 projects IPP EETC Wind 250 MW 1 project Feed-in Tariff IPP EETC Wind 2000 MWseveral projects Commercial Plants IPP Bilateral contracts with customers PV 2300 MW several projects Wind 720 MW 2 projects In operation < 3 Development phase Development phase Development phase Early Development < (w.r.t FOH) (W.r.t size) Not yet 4

5 RE Mechanisms in Egypt Projects Price $ cent/kwh Finance Site preferences (FoH) Major Financial Challenges State Owned projects Competitive Biding Projects (BOO) < 3 Soft loans ( i < 3% ) < 5 Good financing cond. ( i < 5% ) ~ 3000 Subsidized selling price to EETC > 4500 Sovereign guarantee Feed-in Tariff (w.r.t FOH) (W.r.t size) Commercial loans ( i < 6% ) Sovereign guarantee convertibility 1700 Commercial Plants Not yet ~ 3500 Bankability Poor demand on RE 5

6 Feed-in Tariff Decree Prime Minister Decree No for year 2014 Feed-in Tariff has been issued for wind and PV projects targeting either of the following conditions: o For 2 years from the date of issuance of the decree o Reaching total capacities of 4300MW; 2000 MW for wind, 2300 MW for PV, where 2000 MW for utility scale MW for small scale (<500KW) 6

7 Feed-in Tariff Decree Feed-in Tariff is issued in $ cent/kwh whereas it is paid in local currency according to the below equation: Wind: Feed-in Tariff (EGP) = [30% of FiT ($ cent) * 7.15 (EGP)] + [70% of FiT * exchange rate on due date] PV: Feed-in Tariff (EGP) = [15% of FiT ($ cent) * 7.15 (EGP)] + [85% of FiT * exchange rate on due date] 7

8 Feed-in Tariff for Wind Stepwise Reduction for Wind FIT 1 st period 2 nd period Worst Site: Low FOH Same IRR Best Site: High FOH 5 15 Year s 8

9 Feed-in Tariff for Wind(issued Sept.2104) Full Operating Hours (FOH) FiT in the 1st period $ cent/kwh FiT in the 2nd period $ cent/kwh Full Operating Hours (FOH) FiT in the 1st period $ cent/kwh FiT in the 2nd period $ cent/kwh

10 Feed-in Tariff for PV(issued Sept.2104) Project s Capacity FiT piasters/kwh Project s Capacity FiT $ cent/kwh Residential 84.4 <200 kw <20 MW MW 50 MW kW - <500kW

11 Interrelations.. Licenses, Agreements & Permits EETC(Egyptian Electricity Transmission Company) - GAFI (General Authority for Investment) MoF ( Ministry of Finance) - NREA (New and Renewable Energy Authority)

12 Legislative, Regulatory & Financial Challenges There are different challenges that need to be crucially considered; Legislative Regulatory Economic Technical Financial Challenges as well as Solutions are faced, shared and solved by the involved parties

13 Legislative, Regulatory & Financial Challenges Legislative: no challenges so far Regulatory: o Major regulations have developed during the planning phase, other regulations are being developed along with the progress of the process, o This causes: delays in the procedures - continuous need to more regulations to reach a mature regulatory framework

14 Legislative, Regulatory & Financial Challenges Financial: o o o o Vulnerability of Financial Structure of EETC Sovereign Guarantees Pre-requisites to financial closure Convertibility Items Creditworthiness (Moody s rating) Country Risk Total Equity Risk premium Therefore: Acceptable IRR WACC Egypt Caa % 17% 16.5% 10%

15 Thanks for your attention Eng. Marwa Mostafa Khalil Head of Planning Dept. Egyptian Electric Utility and Consumer Protection Regulatory Agency(EgyptERA) Phone + (202) Ext. (139) Fax + (202) [email protected], [email protected] Website 15