SRI LANKA SUSTAINABLE ENERGY AUTHORITY Sri Lanka Sustainable Energy Authority Resource Allocation for On-grid Renewable Energy Project Development : an.

SRI LANKA SUSTAINABLE ENERGY AUTHORITYSri Lanka Sustainable Energy Authority

Resource Allocation for On-grid Renewable Energy Project Development : an Introduction

Harsha Wickramasinghe

SRI LANKA SUSTAINABLE ENERGY AUTHORITY

Content

Background

Applying for Provisional Approval

Reapplications made for cancelled sites

Pre-feasibility study and Consultants

Granting and refusing Provisional Approvals

Granting and refusing Energy Permits

Effects of delays accrued

Power purchase agreements and tariffs

Cancelled Provisional Approvals and Energy Permits

Reapplications

Granting PA

Background

Applying for PA

Prefeasibility & Consultants

Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP


Background

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

• On-grid Renewable Energy Projects Regulation 2009 published in Gazette No. 1599/6 of 27th April 2009 is to be amended (not repealed as contemplated earlier)– A new regulation with new schedules was gazetted on 31 May

2011 (Gazette No.1705/22 of 10th May 2011)– Effective date 10May, 2011

• Halfway done projects, letters sent requesting balance payment– New regulation requires the formulation of new guidelines

• Guidelines were formulated by SEA in association with PAC to;– Advise the Board of Management of SEA on technical, economic

and environmental guidelines on granting Provisional Approval (PA) and Energy Permits (EP)

– Review and recommend changes in policies, plans and strategies in developing renewable energy

• Need to overcome stalemate arising out of the prevalent regulation– Many sites in abeyance with cancelled PAs


Background

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP


Applying for PA

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

• Any person can apply to develop a new renewable energy (NRE) site, provided that the application is accompanied by ;– A report on Pre-feasibility study carried out by a Consultant

accredited by SEA, which include;• A brief description of the project, including the amount of power to

be generated• The total estimated cost and financial model• Project location, describing the relative location of energy conversion

plant and equipment to the resource• A sketch indicating the method of interconnecting the project to an

existing point in the national grid– A copy of the map of the geographical location of the proposed

project,– Proof of availability of adequate finances or the manner in which

the required finances for the project are to be obtained,– A copy of the receipt obtained from the SEA, for the payment of

the prescribed application fee

Full functionality

of

Section 16 enabled as

requested


Applying for PA

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

• With the previous regulation, a resource verification process was available, and this will be taken out in the new regulation– A possible contravention of the Act avoided– A burden to the developer

• All applications to be tabled before the PAC– Applications favourable considered for PA, if;

• the resource site is available for development, • not associated with a another applicant who is;

– waiting for / carrying a Provisional Approval, – is waiting for / carrying an Energy Permit

• the Government is having plans for development of the resource site • the resource site is already being utilised by any other party for on-

grid or off-grid electricity generation

– Refusal of PA, if the above conditions are not satisfied

• Queues maintained for a given site to be cleared– By tabling all such applications before the PAC


Applying for PA

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

Amount of power proposed to be generated

Fee to be paid on application and reapplication

1,000 kW or part thereof LKR 100,000

Each additional 1,000 kWLKR 50,000 payable

on pro rata basis

Note: Projects of capacities less than 10,000 kW implemented by a single party or parties acting in concert, in parallel or in phases in a same geographical or spatial context will be considered as a single project capable of generating more than 10,000 kW of power and will not be considered unless a policy directive from the Ministry of Power & Energy is issued on that behalf

• Application fee structure amended– Presently LKR2,500 resource verification fee and LKR10,000

application fee– Revised to reflect the process involved and also to become

a deterrent, limited only to cash / bank drafts ?


Reapplications

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

• With the previous regulation, a stalemate condition occurred due to a statement assuring that the same applicant has not made any previous applications for the same site– This statement replaced by the following statement ;‘I attach herewith technical and other details related to the resource site, as requested by

the Director General.’

– This is to elicit the progress achieved by the Applicant with the PA granted to that site prior to the cancellation

• Extensions to PA and reapplications will have to be supported with a progress report and a presentation– No Extension fee will be charged– This will form the basis for DG’s recommendation to PAC– The success will be based on a comprehensive marking

scheme


Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

PassProject Aspect Investigated Marks MarkHow far the Developer has proceeded 23 10/23Provisional Approval status : Extension requested 2 Extension for Provisional Approval obtained 3 Letter of Intent from CEB obtained 5 Divisional Secretary’s no objection obtained 2 Local Authority approval realised 2 National Water Supply & Drainage Board approval obtained 2 Department of Agrarian Services approval obtained 1 Department of Irrigation / Coast Conservation approval obtained 2 Forest Department approval obtained 2 Department of Wild Life Conservation approval obtained 2 Environmental Clearance 10 Registration 5 Terms of Reference obtained 3 Environmental approval issued 2 Level of effort of Developer 50 20/50Initial survey carried out 5 Pre-feasibility study report available 2 Detailed survey plans available 8 Full feasibility study report available 9 Layout confirmed after site inspection 2 Full weather cycle resource assessment report available 8 IEE or IEA report submitted to approving authority 5 Land acquisition / vesting completed 8 Land ownership identified / tenement list submitted to SEA 3 How optimally the resource has been harnessed 3 Installed capacity accurately calculated 1 Energy yield accurately estimated 2 Financial and technical capability 14 Equity support documents provided 5 Bank references provided 3 Audited accounts / sound bank statements provided 3 Volume of transactions of partners declared 3

Total 100 30/100


Results of the Evaluation

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

Marks % No of Projects MW

>50 34 62.9

40-50 24 31.4

30-40 24 34.4

20-30 25 90.8

10-20 27 66.6

10> 87 187

Total 221 473.1


Pre-feasibility and Consultants

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

• Pre-feasibility studies will be done by a panel of accredited Consultants– Will involve 7 genres of technology

• Small Hydro• Wind• Biomass(Dendro)• Biomass (Agricultural and Industrial Waste)• Municipal Solid Waste• Waste Heat Recovery• Other: Any other NRE resource which can be converted to produce

electricity which can be fed to the national grid.

Authority unable to peruse reports on ‘Other’ genre, to be referred to PUCSL?

• Panel of Consultants to be reconstituted, to be limited to Chartered Engineers (Civil, Electrical and Mechanical only?)• Retaining experienced good Consultants ?


Granting PA

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

• A Provisional Approval will be granted by PAC, based on the DG’s recommendation

• DG’s recommendation will consider whether;– the application is complete in every sense, as per requirements of the Section

16(2) of the Act and On-grid Renewable Energy Projects Regulation 2011, – the amount of power proposed to be produced by the Applicant is

representative of the available resource,– the CEB has granted its concurrence to consider the proposed capacity or part

thereof for grid connection as required under Section 17(1) of the Act,– there is any operational power plant in the same location or using the same

resource area or part of the resource area required by the Applicant for the proposed project,

– SEA has issued a Provisional Approval or an Energy Permit to another Applicant for the same site or the resource or part of the resource area required by the Applicant for the proposed project,

– SEA or the Government of Sri Lanka has plans of their own to develop the site through a different mechanism,

– a policy directive from the Ministry of Power and Energy is available to consider a project with an installed capacity greater than 10MW, in the event of an application is received for a project of capacity greater than 10MW,

– Whether the project is impacting on any excluded area.


Granting PA

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

• A three phase approach is proposed

Collection of Pre-Approval Papers

Pre-Approval

Formats

Preparation for PAC submission

Distribution at nth PAC Meeting

Forest Wild Life

Irrigation

Archaeology

Relevant? Delist from PA No

Yes

Request Developers to obtain Project Scrutiny & Provide Copies

PRE

APP

ROVA

L CY

CLE


Granting PA

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

• Silence is consent approach?– PAC rejected this approach

• For relevance check• For scrutiny

Request Developers to obtain Project Scrutiny & Provide Copies

Link Agency Scrutiny Provide Copies of Requesting Scrutiny at (n+1)th PAC Meeting

Follow up by PAC Members Grant / Reject Provisional Approval at (n+2)th PAC Meeting

Link Agency Approval Processes Follow up by PAC Members

CLO

SE S

CRU

TIN

Y CY

CLE


Granting EP

Reapplications

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

• One time permit fees revised;– Less than 10MW projects : from LKR50,000 per project to

LKR500,000 per MW– More than 10MW project : from LKR1,000,000 per project

to LKR1,000,000 per MW

Follow up by PAC Members Link Agency Approvals

Reject Energy Permit

Grant Energy Permit at (n+r)th PAC Meeting

Follow up by PAC Members

Link Agency Approval Processes Follow up by PAC Members

APP

ROVA

L CY

CLE

Granting PA


Effects of Delays Accrued

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

• Delays in securing all approvals required for EP could result in cancellation of PA– Remedy offered through the reapplication process– Aggrieved parties may appeal to the Board of Management

• Delays in project implementation after securing EP– Remedy offered through a show cause process– All accrued delays to eat into the 20 year power purchase

agreement from the front end– Aggrieved parties may appeal to the Board of Management


Power Purchase and Tariffs

Reapplications

Granting PA

Background

Applying for PA


Granting EP

PPA and Tariffs

Cancelled PA and EP

• For projects up to 10 MW: CEB offer a Standardised Power Purchase Agreement (SPPA) for renewable energy projects of the approved genres, with an installed capacity up to 10 MW.

– The SPPA is standardised and non-negotiable, and is valid for twenty years from the commercial operation date and tariffs will be paid under the Small Power Purchase Tariff (SPPT).

• For projects larger than 10 MW: There is no standardised agreement or standardised tariffs for the sale of electricity from renewable energy projects exceeding 10 MW. Such agreements to be negotiated between the Developer and the CEB, subject to policy directives issued from the Ministry of Power and Energy.

• Small Power Purchase Tariff: The tariff for projects that would enter into an SPPA is published at any given time, typically at the end of each calendar year. There will be a tariff review process conducted by the Ministry of Power and Energy typically once a year

Effects of Delays


Cancelled PA and EP

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

• Due to incapability of developers or impossibility of implementation, certain sites may face the cancellation of registration– All sites can enter the auction process– Or, only with sites reapplied for ??

• An auction process is designed to assign such projects to new Applicants– Evaluate resource sites and permanently delist

undevelopable resource sites– Prepare project briefs– Register bidders during two cycles (December and June)– Acquire all approvals and lands required for

implementation– A sizable bid bond, representative of the ‘ready to invest’

value of the business case


Cancelled PA and EP

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

• Evaluation of Bids on QCBS method– Price meaning the NPV of revenue paid to the Authority as

royalty, during the life of the projectAspect Investigated Marks

Quality of bid 20

Quality of proposal 3

Implementation timeline 5

Qualifications of key people 2

Local value addition ratio 10

How optimally the resource has been harnessed 10

Installed capacity accurately calculated 5

Energy yield accurately estimated 5

Financial strength 15

Equity support documents 5

Bank references 3

Strong audited accounts 5

Volume of transactions of partners 2

Past experience 15

In similar projects (documented) 10

In project management (documented) 5

Financial consideration 40

NPV of revenue stream 40

Total 100

Table 3 : Marking Scheme (Auction Process)Note: Information provided by applicants is subject to validation by directly contacting reference sources provided by the applicant.


In Summary

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

Application

Identify siteMark on mapPre-feasibility study and reportProof of financial strengthGrid connection pointApplication fee

Omissions ?

Registration R 1 xxxx x Number

Consult CEBSite inspectionPresentation to Expert Committee

Relevant to line agencies? Delist

from PA

Scrutiny by line agencies

PAC Meeting

Provisional Approval

PA 2 xxxx x Number

Token Number

Proceed to Grant Energy

Permit

EP 3 xxxx x Number

Rejection

Approval by line agencies

Proceed to Grant Energy Permit EP 3 xxxx x Number

Reapplication

Feasibility StudyAccess to Land ResourcesProgress of Statutory ApprovalsEnvironmental Approval

Auction Process

Site inspectionPresentation to Expert Committee

PAC Meeting

Provisional Approval PA 2 xxxx x Number

Token Number

Evaluation


In Summary

Reapplications

Granting PA

Background

Applying for PA


Granting EP

Effects of Delays

PPA and Tariffs

Cancelled PA and EP

Registration of biddersJun / Dec every year

Project Proofing

Project Brief

Return Bid Bonds to Unsuccessful Bidders

Invitation of Bids

Deregister Resource Site

Cancelled Resource Sites

Land AcquisitionStatutory ApprovalsGrid Connection Proposal

Receipt of Bids / Bonds

Bid Evaluation

Auction Cycle Jan/Jul every year

Award of Resource Sites

Proceed to Grant Energy Permit

EP 3 xxxx x Number

Thank You! Call us on: +94-11-267-7445E-mail us to: [email protected] us at: www.energy.gov.lk Drop in at: 3G 17, BMICH, Bauddhaloka Mawatha

Colombo 00700, Sri Lanka

SRI LANKA SUSTAINABLE ENERGY AUTHORITY Sri Lanka Sustainable Energy Authority Resource Allocation for On-grid Renewable Energy Project Development : an.

Documents

pa background

pa reapplications

pa prefeasibility consultants

provisional approval

ep slide

energy permits reapplications

energy permits ep review

ministry of power energy