Transcript
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Proposal for National Renewable Energy
Plan for Saudi Arabia
Abdullah M. Al-ShehriECRA
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Plan of presentation
Benefits and potential of renewables
Proposal for incentivizing renewables
Institutional responsibilities
Next steps
Introduction
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Industrial and agricultural processes can alsocreate some renewable potential
Waste to Energy - Waste heat from industrial processes(e.g. steel mills, petrochemical processing, pulp and paper
mills) can be recovered to provide energy for generation
Landfill gas biodegradable waste in municipal landfills
can be decomposed to produce methane, and then used as
fuel for power generation
Municipal solid waste incinerators can burn solid waste
from municipal landfills to generate heat and electricity;
there are about 431 Waste to Energy plants in Europe and
89 in the US
Biomass - agricultural waste (e.g. grains, weed, sawdust,
etc.) and animal waste could be used as feedstock for
boilers/heated steam can be used to generate electricity
Saudi Arabiasagricultural produce
may offer a potential forbiomass energy:
Saudi Arabia produces, inorder of importance, wheat,barley, tomatoes, melons,dates, and citrus fruits; the
main livestock are muttonand chickens
Various crop/vegetableproduction (2.5 million tonsin 2004) and animal wastecould be used as feedstockto generate electricity
However wheat production
gradually being reduced,requiring reliance on othersources for biomass
Waste combustionand slag
management
Hot flue gasesproduced andrise to boiler
Water circulatedin the boiler
(400C)
Converted intohigh-pressure
steam (40 bars)
Fed to turbines anddrives electricity
generator
Residual steam inthe form of heatIn a condenser, heattransformed into water
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Key messages
Saudi Arabia has significant renewable energy potential, and notonly in solar and wind energy
There are four main approaches to incentivizing renewable energy:
- Feed in tariffsset a standard price per kWh for qualifying renewables;
they are effective at guaranteeing a revenue stream to generators, but
if not set at the right price can distort incentives- Central procurementinvolves an agency providing renewable energy
contracts through competitive bidding; such an agency must be
strong, but the process can lead to greater control over capacity and
timing
- Quota systemsdetermine the quantity of renewable energy to be
procured, and allow the market to set the price; they are effective if a
trading infrastructure is in place
- Financial incentives and support mechanismsmake use of existing
systems and are administratively easy, but are often insufficient
In Saudi Arabia, feed in tariffs and central procurement are most
relevant
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Various alternatives are deployed worldwide topromote renewable energy
At least 64 countrieshave renewable energysupport policies
Support policies werefirst deployed in thelate 1970s in Denmarkand the US
As of year-end 2008,renewable capacitywas 280,000 MW,mostly wind and smallhydro
Four main
mechanisms are feedin tariffs, centralprocurement, quotasystems and financialincentives/supportmechanisms
*This classification only applies to jurisdictions that solely rely on financial incentives/supportmechanisms. Virtually all jurisdictions employ financial incentives/support mechanisms along
with one or more of the other three mechanisms (FIT, central procurement, and quotaobligation).
Note: Finland recently implemented a FIT system but the chart does not show this because
financial incentives/support mechanisms remain most prominent in Finland.
Feed-in tariff
Central procurement
Quota obligation
Financial incentives/supportmechanisms*
FIT & Central procurement
FIT and Quota obligation
FIT/Central procurement/Quota
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These mechanisms aim to overcome fundamentalbarriers to entry by renewables by targeting
different aspectsAspects targeted bydifferent approaches
Feed in tariffs set price(and may differentiate
between technologiesand sizes of facilities)
Central procurementsets an installedcapacity target (in MW)
Quota system hasexplicit renewablegeneration target (inMWh)
Financial incentivesimplicitly target thereturn on equity toproject developers
Projects more expensive than alternativeways of generating power; chief barrier todevelopment of renewables
Certain renewable technologies may be lessproven, and unknown risk to financiers(particularly in current credit environment)
Zoning and building codes mayinadvertently discriminate against
renewables, particularly small-scale Problems in dealing with multiple levels of
government in seeking approvals
Growing opposition to siting renewablefacilities in close proximity to residential
areas
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There are also Saudi specific challenges inincentivizing renewables
Unclear commitment to renewable energy
Uncertainty to developers on who is lead
contract authority or how to obtain
contract from creditworthy counterparty
Uncertainty regarding evolution of
industry; developers need to know how
activities fit in with structure and that
entity contracted with will still exist
Extent of renewables resource base
undefined; developers will gravitate to
jurisdictions with most availableinformation
Permitting and business set up process
not well understood by developers
Low cost of primary fuels
Primary fuel costs
Low and subsidized cost ofprimary fuels accentuatescost advantage of gas-firedpower stations againstrenewables in Saudi Arabia
Indicative levelized cost of renewablesagainst gas-fired entrants in KSA
0
200
400
600
800
1,000
1,200
CCGT
SCGT
Wind
Biomass
S
olar
Th
ermal
Tidal
SolarPV
SaudiRiyal/MWh
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Central procurement can benefit from a strongcentral agency and a specified target capacity
Involve centralagency (such asSingle Buyer orgovernment itself)providing renewableenergy contracts
through competitivebidding process
Agency sets explicitrenewable energytarget (in MW) andissues requests forproposals (RFPs)
Often maximumprice per unitspecified and limitsplaced on capacityby one participant
Centralprocurement
agency
Renewable ProjectDeveloper A
AuctioningProcess
Renewable ProjectDeveloper B
Renewable ProjectDeveloper C
Renewable ProjectDeveloper D
Renewable ProjectDeveloper E
Renewable ProjectDeveloper F
Individuallysubmit bids
Target forprocured
generation
set
Monitor biddingprocess andevaluate bids
Select bids and
act ascounterparty
Bids chosen
May be different targets for different technologies and sizes oralternatively all technologies may compete on equal footing
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Central procurement provides greater controlover capacity and timing, but requires a strongagency to manage process
Provides control overamount of renewable
capacity deployed andtiming
Can incentivize low cost
resources
Provides revenue stability togenerators due to long-termcontracts
No need for any agency tosecond guess price level
More administratively complexthan FITs; requires entities
which are competent enough toundertake competitiveauctioning process, determineselection criteria, evaluate bids,
devise standardized or
individualized contracts, etc. orrely on consultants/experts
Lag between procurement andgeneration
Pros Cons
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Quota systems allow the market to set the pricefor renewables and involve tradable instruments
Determine quantity (MWh) of renewableenergy to be procured, and allow market
to set price
Targets often set by government; quota
placed mainly on load serving entities
for proportion of energy purchased fromrenewables; penalties imposed for
failing to meet quota
Often combined with marketable/
tradable instruments, with transparent
price
Tradable instruments represent
environmental attributes of power
produced from renewables and can be
bought or sold by market participants,
often separately from underlying energy
Set targeted quantity, determine entity tobe targeted (e.g. 10% of all electricity
sales for distribution companies must bepurchased from renewable resources)
Establish tradable instrument which setsprice per MWh to renewable powergenerators. Set terms of trading of
instrument, including across jurisdictions
Determine eligibility criteria forrenewablesunder program and whether
different classes ofrenewables
Establish monitoring, evaluation andverification structure to support program
Determine penalty level to be applied toentities which do not meet target
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Quota system can achieve given renewablequantity at lowest cost, but needs clear,consistent policy and trading infrastructure
Can ensure specifiedquantity of renewable
generation is achieved at thelowest cost
No need for agencies to
second guess the price level
Need stable and wellcommunicated government
policy about eligibletechnologies, who is mandatedto meet targets, etc.
Generators are not guaranteedrevenue stream
Needs developed tradinginfrastructure
Can be administrativelycomplex
Pros Cons
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Financial incentives also can promote renewable
development by targeting a companys ROE
Financial incentives can influence arenewable energy developers future free
cash flows through targeting their return on
equity (ROE)
Financial incentives can be directed both at
renewable energy developers and themanufacturers of renewable energy
products:
Examples of financial incentives targeting
- Investment subsidies
-Grant
- Low interest loans
- Tax credits
- Lower or zero tax rates (value-added tax,
excluding dividends from renewable energy
investments from income tax, etc.)
Financial supportmechanisms in Spain
Alongside the FIT, Spain uses avariety of financial supportmechanisms, including subsidies,tax deductions and low interestloans
Investment subsidiescover 36.4%of installation costs for renewableenergy heating and coolingtechnologies
The 2001 Law on Fiscal,Administrative and SocialMeasures provided corporate taxdeductionsof 10% for investmentsin non-wind based renewableenergy
The Renewable Energy Plan 2000-10 established a financingmechanism to provide low interestloanscovering up to 70% of aninvestment to help renewableenergy developers
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Other support mechanisms exist, such as R&D,resource mapping, and institutions to expeditepermitting
Government funded researchto disseminate
information on renewable energy to interested
parties can be effective support mechanism; can
include resource mapping showing potential of
different renewable technologies Supporting institutions to expedite or streamline
permitting processfor proposed projects are also
widely used
Some jurisdictions provide infrastructure support in
connecting to the gridor in expanding transmissionlinesto accommodate renewable projects in
development of prospective projects
Net metering, which allows consumers to build small
renewable energy systems at homes and businesses
and sell unused energy back at the wholesale
electricity price also used to incentivize development
Wind mapping and netmetering in Ontario
In Ontario, the Wind ResourceAtlas Programhas aimed to helplarge and small wind developersidentify favorable locations for
wind development and widelypublishes such information
The net metering programallowssmall producers of renewableenergy (who produce mainly forown consumption) to connecttheir output to the grid andreceive credits towards their
energy costs. The value ofgenerated renewable electricity iscalculated at the same price aswhat a consumer would pay for akWh of energy
In 2009 Green Energy Actproposal to create a RenewableEnergy Facilitation Officeto shareinformation with developers on
permitting process
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The CDM mechanism has been used in China topromote renewable energy
The Clean Development Mechanism
(CDM) is a component of the Kyoto
Protocol that allows industrialized
countries to offset carbon emission
reductions by buying certified credits
from non-industrialized signatories;credits under CDN known as Certified
Emission Reduction Credits (CERs)
As of April 2008, 18% of all CDM projects
were in China, the leading country
27% of these projects involvedrenewable energy, and were mainly
hydro based
Aligning national renewable energy
regulations with CDM policies could
increase ability to earn future credits
Qualification for CDM projects To qualify for earning CERs, project needs
to be in non-annex 1 country, which isparty to the Kyoto Protocol
Also need for a Designated OperationalEntity (DOE)/ Designated National Authority(DNA), which is independent legal entityaccredited and designated by CDMExecutive Board to validate proposed CDMprojects and verify and certify emissionreductions
Saudi Arabia eligible to participate in CDM;Egypt, Jordan, Israel, Qatar and UAE allhave DNAs and host or are registering aCDM project
Source: Bloomberg
CER Prices (Sep 2007 Dec 2008)
0
10
20
30
40
50
60
Sep-0
7
Nov-0
7
Jan-0
8
Mar-
08
May-0
8
Ju
l-08
Sep-0
8
Nov-0
8
Price(US$)
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Financial incentives and support mechanisms areadministratively straight forward, but if politicized
can create uncertainty and often insufficient
Financial incentives make
use of existing mechanisms(e.g. tax and benefit system)
Administratively straightforward
If constantly changed, due to
political factors, can createuncertainty to projectdevelopers (e.g. sunsetperiod of PTC)
Often insufficient on own;
need one of preceding toolsto incentivize renewablesfurther
Pros Cons
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Plan of presentation
Benefits and potential of renewables
Proposal for incentivizing renewables
Institutional responsibilities
Next steps
Introduction
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Renewable energy can provide Saudi Arabiawith significant benefits
Helps diversification of fuel andtechnology sources
Can reduce growth of Saudi emissions
(NOx, SOx and CO2), effluents and
water usage
Reduces opportunity costs ofsubsidized fuel inputs
Provides alternative means of serving
remote areas
Can foster creation of a domestic
market for renewable energy products
Introduces new players into wholesale
market, enhancing innovation and
potentially competition
Can be more scaleable than
conventional technologies
Subsidized fuel inputs
Natural gas and petroleum productssold to power producers at ratesconsiderably below market prices
A reduction in use of subsidized fuelsfor future capacity could potentially
increase export revenues, even ifrenewable energy itself is subsidized
Domestic fuel charges for power facilitiesrelative to current global market prices
Source: Bloomberg, proprietary contracts
0
2
4
6
810
12
14
Light fuel oil(SR/liter)
Heavy fuel oil(SR/liter)
Ethane gas(SR/MMBtu)
Domestic fuel charges
Global market prices
Saudi Riyals
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Renewable energy plan is needed to incentivizedevelopers to build; it also signals efforts arebeing taken by KSA to reduce greenhouse gases
A plan is needed to providepotential investors with clearunderstanding of how they will getpaid, how much, who will make the
payment, and have confidence incommitment of authorities torenewables
If properly designed, a plan canensure that renewable projects will
be developed in a cost-efficientfashion
As increasing pressure oncountries to reduce greenhousegas emissions, can show stepsare being taken by Saudi Arabia
The Copenhagen Conference
Successor agreement to Kyoto beingsought to reduce greenhouse gasemissions
65 Heads of States have thus far
committed to attending the conference,scheduled to end on December 18th
Agreement on a global target for thereduction of greenhouse gasemissions and timeline to achievetarget are key objectives of conference
Will require commitment fromdeveloped countries to reduce theirCO2 emissions, while developingcountries contribute to a collectivesolution through sharing oftechnologies, research anddevelopment
Any agreement on global climateregime should not restrain economic
growth or distort competition
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Developing a renewable energy plan is consistentwith developments in neighboring countries
UAE Established carbon-neutral, zero
waste city and launched $250million company to develop newrenewable energy sector (MasdarInitiative)
Considerable use of solar energy:parking meters, water heating,cooling, and 500 MW plant
Opened solar-cell production line
Lebanon
Developingproject for solar-powered desalination plant
Significant installed hydro Increasing installations of solar
water heaters
Syria Completed wind farm feasibility
study Establishing National Center for
Energy Studies and Researchtodevelop a National RenewableEnergy Plan
Significant amount of installedhydro, biomass and solar waterheaters
Jordan Developed energy sector strategy
with a goal of 5% of renewables by2015
Established a National EnergyResearch Center
Established a solar energyindustry: stand-alone PV, PVpumping systems, R&D and
training Two operating wind farms
Qatar
Investing $20 million forRenewable Energy Center
Set up a $403 million clean energyfundwith the UK
Building solar complex of 3,500MW by 2013
Oman Study proposing a National
Renewable Energy Plan publishedin 2008; evaluating proposed pilotschemes
Significant use of solar waterheatingsystems
PV used for power in remote
areas Significant R&D
Yemen Significant PVapplications for
both urban and domestic use
Established solar water heaterindustry
Kuwait
Goal of 5%of total electricityfrom renewable energy by 2020
Call for $150 million for R&D
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But future potential from other renewableresources should not be ignored
Wind energy and speeds in KSA
From available data, mean annual windenergy between 250 and 500 kWh/m2 onRed Sea, dropping to 50 kWh/m2 inland
Annual average wind speeds of 3.2 to5.3 miles per second
Available data does not appearcomprehensive
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000CHP installed capacity (MW)
in select countries
Wind- best potential lies along
Arabian Gulf and Red Sea coast
Waste to energy incineration with
energy recovery most potential
using urban solid waste; 0.3-1.1 GW
of installed capacity estimated tobe technically feasible
Geothermal there are 10 hot
springs with varying deep
temperatures of 50 to 120oC
Other innovative technologies,such as hydrokinetic energy and
waste heat recovery exist
CHP using the heat for cooling
purposes via absorption cycles;
efficiency rate as as high as 80-90%
compared to 47-60% for CCGTs
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There are Saudi-specific challenges in promotingrenewables
Low cost/subsidization of primary fuels
Uncertainty on who is lead contractauthority or how to obtain contract fromcreditworthy counterparty maydiscourage investors
Uncertainty regarding evolution ofindustry; developers need to know howactivities fit in with structure and thatentity contracted with will still exist
Extent of renewables resource base is
undefined; developers will gravitate tojurisdictions with most availableinformation
Permitting and business set up processnot well understood by developers
Indicative levelized cost ofrenewables against gas fired
entrants in Saudi Arabia
0 500 1,000 1,500 2,000 2,500
Solar PV
Tidal
SolarThermal
Biomass
Wind
SCGT
CCGT Levelized costs ofgeneration at world
market gas prices(green = subsidizedelement)
Upper and lowerrange of
levelized costs
SR/
MWh
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Plan of presentation
Benefits and potential of renewables
Proposal for incentivizing renewables
Institutional responsibilities
Next steps
Introduction
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Mechanisms to promote renewable energy shouldencourage the lowest cost resources, betransparent, and be tailored to the jurisdiction
Instrument should attempt to incentivize the lowest cost, mostefficient resources, rather than encourage a gold rush frominefficient entry
Mechanism should be transparent, flexible and administrativelystraightforward
Option chosen should be tailoredto the specific institutionalcapacity and market structure of thejurisdiction
Ideally if a price is being set for renewables, a device forrevealing the priceshould be formulated rather than agencieshaving to second guess
Instrument should consider geographical distributionofprojects and grid impact
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Procurement arrangements base eligibility onenvironmental attributes
Suggested initial qualifyingresources
Minimum size:greater than 10MW
Emissions:zero emissions,except for qualifying biomassfuels and waste to energyfacilities
Online date:project must beoperating no later than threeyears from date of award
Biomass:any biomass fuels mustbe procured within KSA andemission and effluent levelsshould be consistent with KSA
regulations
Waste to energy:waste should bedelivered from radius no greaterthan 100 km from facility (ifdelivery is solely by road), andemissions and effluent levelsshould be consistent with KSA
standards
Eligibility standards based onenvironmental attributes rather thantechnologies
Initially a size limitation would be imposed,as administering multiple small contracts
administratively burdensome for REPD Initial procurement arrangements designed
with anticipation of seeking contracts up to2,000 to 4,000 MW by September 2011
Also requirement projects be connected to
transmission voltage level, as projects atdistribution voltage may cause additionalcost incurrence (except in remote areas)
Requirements can be revised in futurerounds, including possibility of energy
efficiency projects
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Contracts would be for 20 years or more, withselection based on a scoring mechanism
Proposed selection criteria Bids would be submitted for contractterms of 20 years; could be submittedfor longer terms if results in lowerlevelized cost
Request for EOIs would include draft
standard contract template for commentby potential developers; commentsused by REPD to refine template
On award of contract, negotiations willbe related to specifics of contract
addendums/exhibits and projectdevelopment milestones, not contractitself
Drafts of addendums/exhibits tocontract would be part of RFP
submission
Levelized cost
Technological diversity
Geographical diversity
Impact on grid
Impact on reliability
Likelihood of reaching completion(including both technical and
financial considerations)
Each category would be allocatedcertain number of points, reflectingREPDs weightings; proposal would
be scored by multiple evaluators;average score would determine
selection
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20 year contract terms are consistent with centralprocurement processes in other jurisdictions andPWPA lengths
Lengths of recent centralprocurements (in years)
20 year length is consistent with
recent procurements in other
jurisdictions, including in Arizona,
California, and Ontario, as shown
in accompanying box Also consistent with recent length
of power and water purchase
agreements (PWPAs) for
Independent Water and Power
Producers (IWPPs), including:- 20 year PWPA for Shoaiba 3
project in KSA
- 25 year PWPA for Hidd project in
Bahrain 0 20 40
Arizona Public ServiceCompany*
City of Palo Alto(California)*
Ontario Power Authority
Pacific Gas andElectricity Company
Southern CaliforniaEdison*
Southwestern PublicService Company*
Source: applicable entities websites; *consistutes maximum
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An initial Renewable Resource Inventory wouldoccur prior to the first procurement round
Importance of continuallyupdating resource mapping for
potential investors
Need for Saudi Arabia to assure up-to-date dataabout renewableenergy resources is publicly
available and accessible Program would build upon initial
Renewable Resource Inventory,including regular updates andconsideration of new technologiesand improvements to old ones
Work of National Renewable Energy
Laboratory (NREL) in the US is oneexample
Maintenance of RenewableResource Inventory would beappropriate role for SREO inconjunction with REAC andPresidency of Meteorology and the
Environment (PME)
Need for Renewable Resource Inventoryto assess economic and technical
feasibility of renewable projects in Saudi
Arabia
Based on generic projects across
multiple technologies at appropriate
scale (at minimum covering solar, wind,
municipal waste and geothermal)
Would identify most promising regions
and approximate technologically
feasible amounts of capacity at current
technology
Also provide guidance on how land and
other inputs can be obtained in most
promising regions
Should be on fast-track basis, completed
by mid-2010 in conjunction with REAC
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Competitive procurements would occur on arepeated cycle and have three distinct periods
December
2010
March2011
June2011
September
2011
December
2011
December
2013
March2014
June2014
September
2014
December
2014
June2016
expressions ofinterest due for
2011 procurement
request forproposals
issued for 2011procurement
response to 2011procurement RFP
due
winning biddersselected for 2011procurement
referent prices issuedby technology for
January 2012-March2014
expressions ofinterest due for 2014
procurement
request forproposals issued
for 2014procurement
response to 2014procurement RFP
due
winning biddersselected for 2014
procurement
referent pricesissued by
technology forJanuary 2015-
March 2017
NREP review
In 2017 the same cycle will be repeated, dependent upon results of NREP review
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Referent pricing would be used to serve as a formof FIT in between procurement rounds
Envision procurement rounds heldtriennially
Results of 2011 procurement used to
inform prices for procurements in-
between 2011 and 2014 rounds; new entity
REPD would use results to establish
referent prices for each technology
(expressed in Riyals per MWh in each
year)
Qualified bidders would execute standard
contract at referent price
Prior to 2014 procurement, REPD would
commission study determining whether
any adjustments should be made (e.g. on
size threshold, connection to distribution
level voltage, inclusion of energy
efficiency projects, etc.)
Submission of EOI
End of March
Notification EOI accepted
End of June
Submit project application
End of September
Sign contract
End of December
Indicative timeline for eachprocurement round
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The shortfall would primarily be covered throughconventional tariffs and the Balancing Fund
Voluntary REC pricing inUS
Voluntary certificatedprograms in the US,otherwise known as non-compliance renewable
energy certificates (RECs)
have value
The two key methods for recovering the costs ofrenewable energy procurement will be:
- Selling the energy from the contracts, compensated
at a rate equivalent to conventional generation
under the tariff
- Charging remaining shortfall to the government as
part of the Balancing Fund (designed to stabilizerates)
In future, green certificates could also be marketed
by REPD to buyers wishing to establish
environmental credentials:
- Initially envision system as being purely voluntary
through quarterly auctions; platform could be used
later for transition to private procurement or trading
of environmental attributes
- Voluntary green certificates produced non-zero
values in other jurisdictions; even small payment
will help offset added costs of renewables
procurement
Selected green e tradable
renewable certificate prices inthe US for 2008 ($/MWh)
0
2
4
6
8
10
12
14
National -any
technology
National -landfill gas
National -wind
WECC -wind
National -solar
California -wind
Bid pri ce (2008)
Offer price (TRC)
Source: Evolution Markets
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FIT in other jurisdictions show extent of costdifferential from existing Saudi tariffs
Source: OPA FIT price schedule as at September 30th, 2009; Reinhard Hass et al (2008) and EREC, RES National PolicyReviews, European Renewable Energy Council, April2008; exchange rate to SR uses 2008 average
Note: In disaggregating the generation component from the total tariff, the revenue requirement allocation from LEIs tariff modelto ECRA over the 2007-09 period is used
0
50
100
150
200
250
300
halala
/kWh
Wind
Solar
Existing average tariff
Estimation of generation componentof existing average tariff
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Plan of presentation
Benefits and potential of renewables
Proposal for incentivizing renewables
Institutional responsibilities
Next steps
Introduction
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There are three key implementing bodies to beestablished within existing or soon to be createdinstitutions
Ministry of Waterand Electricity
(MoWE)
King AbdullahCity for Science
and Technology
(KACST)
Saudi PowerProcurement
Company (SPPC)
Saudi RenewableEnergy Office
(SREO)
RenewableEnergy Academic
Council (REAC)
RenewableEnergy
ProcurementDivision (REPD)
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Implementation bodies, within existing or soon tobe created institutions, need to be established
Creating implementation bodies within existing organizations orsoon to be created institutions will:
- minimize extent new entities need to be chartered;
- allow the use of existing oversight mechanisms; and
- potentially keep costs lower, as less need for new boards or more expensivebureaucracy
Propose a Saudi Renewable Energy Office (SREO) in the Ministry ofWater and Electricity to play key role in defining renewable targets,and working with project developers to assist permitting and overalldevelopment process
Renewable Energy Procurement Division (REPD) in Saudi PowerProcurement Company (SPPC) to act as counterparty to renewableenergy contracts, and develop and run procurement process
Another implementation body is Renewable Energy AcademicCouncil (REAC), which it may be beneficial for King Abdullah City of
Science and Technology (KACST) to host
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SREO would set a target percentage of generationfrom renewables, initially 10% by 2020
Target amount of renewableenergy would be set by SREOin consultation with its parentministry and ECRA
Proposed target level takes
into account technicalfeasibility, project gestationperiods, costs and impact onreliability
10% target by 2020
corresponds to around 8,500MW level over last 10 years;has been achieved in severalcountries, including Spain(10,563 MW ) and Germany(19,304 MW).
Proposed target percentage of load derivedfrom renewable energy, 2014-20
Indicative renewable capacity at 40% loadfactor (MW)
0%
2%
4%
6%
8%
10%
12%
2014 2017 2020
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2014 2017 2020
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SREO would create an ombudsman/liaison officeto provide single window permitting
SREO liaison office
As part of SREO, a liaison Officewould be devoted to working withrenewable energy projectdevelopers
Would particularly assist
developers through permittingprocess (what permits needed,how filled out, and likely timing fordecisions); can provide for allpermits being applied forsimultaneously
Key role to play in inter-Ministerial
coordination As part of duties, would develop a
how to guide for renewable
project developers, which willinclude focus on market rules andmechanisms, permitting andenvironmental standards
Problems with permitting for renewable energyproject developers across the world
Need to shepherdmultiple permit
applicationsthrough diverseagencies at
different levels ofgovernment
Deadlinesforconsideration of
permits may not beconsistentwithfinancing orconstruction
schedules
At times,requirementsfromdifferent agencies
may becontradictory
Challenges can beexacerbated if
foreign developerunfamiliarwith
local procedures
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Renewable ombudsman offices are used in otherjurisdictions, including Canada and Australia
Renewable Energy Facilitation Officein Ontario, Canada
In Ontario, the Renewable EnergyFacilitation Office (REFO) was establishedunder 2009 Green Energy Act
REFO is located within the Ministry ofEnergy and Infrastructure
Aims to provide single window accesspoint for information on renewable energyproject requirements
Provides information on regulatoryapprovals and permits, incentives underthe Ontario FIT program, and how to bringa renewable energy project to life
Opportunity for renewable energydevelopers to set up with REFO acoordinated orientation meeting todiscuss and clarify project requirements
The Office of Clean Energy inQueensland, Australia
Established in October 2008, as partof the Department of Employment,Economic Development andInnovation in the Queensland
government
The Office of Clean Energy aims to bea one stop shop assisting potentialdevelopers by helping to fast trackeligible clean energy projects
Role includes removing regulatorybarriers to renewable energy industrydevelopment
Part of role is also identifying,mapping and sourcing potentialrenewable energy locations aroundthe state
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Plan of presentation
Benefits and potential of renewables
Proposal for incentivizing renewables
Institutional responsibilities
Next steps
Introduction
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Next steps are for a COM decision, creation ofimplementation bodies and gearing up for initialprocurement
Council ofMinisters
decision onadoption ofdeterminedrenewable
energy plan,supported
by
regulations
Step 1 Step 2
Establishimplementation
bodies SREO,REPD andREAC, and
RenewablesInterconnection
Planning andOversight
Group
Step 3 Step 4
Focus begins oninitial
procurementround andrequirements
including:
amount to beprocured;
determining
exact weightingsand scoringmechanism; and
development ofthe standardcontract template
Step 5
Considernew building
codes andstandards,
trainingschemes
and ways toincentivizesolar water
heating
Creation ofRenewables
WorkingGroup andbegin InitialRenewables
ResourceInventory
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A Renewables Working Group and InterconnectionPlanning and Oversight Group would be created
A Renewable Working Group would be responsible for coordinating theinitiation phase of the NREP:
- Would initially consist of representatives from ECRA, Ministry of Water and
Electricity and Ministry of Finance
- Would meet monthly until Implementation Bodies have been established
- Once established, ECRA, and heads of each Implementation Body would sit on
the Group
- During meetings, each member will provide monthly report on progress in
establishing the Bodies
A Renewables Interconnection Planning and Oversight Group would
also be created to plan and monitor the impact on the transmission grid:
- Developers will need accurate estimates of transmission interconnection costs
- Need to also identify which grid strengthening projects necessary to
accommodate significant renewable energy in particular regions
- Also need to assure interconnections and grid strengthening occurs in timely
fashion once need identified
- Will consist of members form REPD, ECRA and STC
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New building codes and standards and training inrenewables would complement the NREP
Building codes and standards should beconsidered:
- Assure existing codes do not unnecessarily
prevent installation of renewable energy
facilities
- Determine extent to which codes for new
buildings can encourage energy efficiency
Players such as REAC and Ministry of
Labor and Social Affairs may focus on
creating training programs in renewable
energy field for skilled workers:
- New jobs unlikely to occur immediately
- Programs should focus on technical skills;
recognizing that many technologies not labor
intensive once installed
- Energy efficiency programs (particularly
building retrofits) may generate moreemployment
Building standards
Throughout the world, variousstandards are being developed to ratebuildings on their sustainability, oftenincluding: site selection, water use,energy consumption, materials used,indoor environmental quality, and
innovation and design process
Often projects can be rated in stages:in design, on completion, and after thebuilding is occupied
Known standards include:
- The Green Starsystem of the Australian
Green Building Council;- The US Leadership in Environmental
Design (LEED) ratings;
- The British Research EstablishmentEnvironmental Assessment Method(BREEAM); and
- The recently unveiled PearlDesignSystem ratings by the Abu Dhabi Urban
Planning Council (Estidama initiative)
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Incentivizing solar water heating may be anotherpillar of Saudi Arabias renewable plan
Solar water heaters can be used to heat water for
variety of residential, commercial and industrial
uses, including space heating and cooling
In Spain, standards introduced where 60 percent
of hot water demand must be met by solar water
heating in all new and/or renovated buildings
Many countries, including Greece, Japan, China
and Turkey have succeeded in making solar
water heaters standard technology that
competes with conventional systems
Source: World Energy Council, May 2007
Solar water heatersin operation
Solar water heating in Turkey Significant potential for future
growth in solar generally:
- Technically feasible solarpotential in Turkey is estimatedat 88 million tons of oilequivalent per year
-40 percent of this is consideredeconomically usable, ths ofwhich is suitable for thermal use,and th for electricity production
The Turkish solar water heatingmarket is the third largest in theworld and has increased by 15%per annum from 2001 onwards,
reaching over 5,000 MWth Turkish manufacturing capacity
for solar water heaters was 1million m2 per year in 2008
A solar water heating systemcosts approximately200-300/m2
in Turkey
Source: MDPI (Sensors) Feb 2008
-
5,000
10,000
15,000
20,000
25,000
30,00035,000
40,000
45,000
50,000
MWth
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Thank You
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