FiT UNIT Renewable Energy Development Schemes …...2015/04/20 · FiT UNIT Power generation...

FiT

UNIT

Renewable Energy Development Schemes

in Egypt Mohamed Salah ElSobki (Jr) محمد صالح السبكي

Executive Chairman - New and Renewable Energy Authority (NREA) Ministry of Electricity and Renewable Energy (MoE&RE)

FiT UNIT

FiT

UNIT

FiT

UNIT 5

Current Capacity

Tuesday, April 21, 2015 Renewable Energy Development Schemes in Egypt

FiT

UNIT

FiT

UNIT

Power generation security

3

Generation plans call for a marked acceleration in the construction of 23 GW of new capacity by 2022

100000

80000

60000

40000

20000

0

MW

35%

30%

25%

20%

15%

10%

5%

0%

-5%

Re

serv

e (

%)

8.2%

6.5%

12.3%

10.4% 11.5%

19.9%

21.4% 21.5%

21.6%

25.1%

26.3%

26.8%

30.0% 30.0%

Solar Nuclear

CC Reserve

Wind Coal

ST

Hydro GT

Peak Load

Government power generation expansion plans and reserve margin

Generation capacity mix 2022to 2014 from

Source: Ministry of Electricity and Renewable Energy

FiT

UNIT

FiT

UNIT

New& Renewable Energy Authority (NERA)

(EPC contracts) since 1993 750 MW 1890 MW

Solar(PV) ≈80 MW

Framework for RE Development Mechanisms


Competitive Biding

Tuesday, April 21, 2015 5

Renewable Energy Development Schemes in Egypt

FiT

UNIT

FiT

UNIT

End

users

RE sources by NREA

EPC

Under payment

Up to 22.4 pt/kWh

Energy

Competitive biding on the supply side


Prevailing tariffs

(subsidized)

Energy

Not correlated


FiT

UNIT

FiT

UNIT



Transmission (BOO) since 2009 (under Preparation): 250 MW wind 10*20MW Solar

Competitive Biding





Solar(PV) ≈80 MW

FiT

UNIT

FiT

UNIT

End

users RE sources

by EETC BOO

Fair Charge +

Gov. guarantee

Energy

Competitive biding on the supply side

Prevailing tariffs

(subsidized)

Energy

Not correlated ?



FiT

UNIT

FiT

UNIT

Transmission (BOO) since 2009 (under Preparation): 250 MW wind 10*20MW Solar



Competitive Biding



Solar(PV) ≈80 MW

Merchant IPP since 2012 120 + 600 MW

(under Preparation)



FiT

UNIT

FiT

UNIT

End

users

Renewable energy

sources by IPP

Fair payment including wheeling charges

Energy

Bilateral agreements (merchant scheme)



FiT

UNIT

FiT

UNIT




Competitive Biding

Fit/Quota since 2014

2000+2000+300 MW (under Preparation)

Transmission (BOO) since 2009

250 MW + 200 MW (under Preparation)

Merchant IPP since 2012 120 + 600 MW

(under Preparation)



Solar(PV) ≈ 80 MW


FiT

UNIT

FiT

UNIT

End users

Energy

Energy Renewable energy sources

FiT Real value Payment according to Fit

with Gov. Guarantee

Energy

Feed in Tariff / Quota


Correlated


FiT

UNIT

Investment Potential in RE schemes


Scheme

Solar PV Wind Total

Capacity MW

investment Mill $

Capacity MW

investment Mill. $

investment Mill. $

NREA 80 120 1890 2457 2577

BOO 200 300 250 325 625

IPP 0 720 936 936

FIT 2300 3450 2000 2600 6050

Total 3870 6318 10188


FiT

UNIT

Interim License EgyptERA

Land

Allocation NREA/Land

Owner

SPV

Establishment GAFI

Qualification FiT Unit

Grid Connection

Study

EETC Within 14 days

Grid Connection

Contract EETC

Measurement, EIS and EEAA’s

Approval EEAA

3 – 6 Months for PV, and 1 Year for Wind

Conducting all Relevant Approvals &

Permits

Relevant Authorities

Usufruct Agreement Relevant Authority Land

Owner

Power Purchase

Agreement EETC

Financial Closure Financing Bodies

Within 1 year from the PPA

signing date

Construc

tion

Bond Investor

Direct

Agreement Investor, MoF,

EETC and

lender

Generation

License

EgyptERA Valid of the Project’s

Lifetime

First

Disburse

ment lender

Construc

tion Commercial Operation

Within 180 Days from the Required

Commercial Operation Date

All Agreements and

Contracts Come into Action

Fit

Commitment

Tuesday, April 21, 2015 Renewable Energy Development Schemes in Egypt 23

RE – FiT Projects: Above 500 kW

FiT

UNIT


W

Land


Owner

SPV

Establishment GAFI



Grid Connection

Study

EETC Within 14 days

Grid Connection

Contract EETC


Approval EEAA



Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment


FiT

UNIT


Land


Owner

SPV

Establishmen

t GAFI


Grid Connection

Study

EETC Within 14 days

Grid Connection

Contract EETC


Approval EEAA



Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment

2. SPV Establishment

• Qualified investors shall establish a joint stock

single purpose project company (SPV) under the

investment law .

• The qualified consortium shall have at least 51%

of the company shares

• The share of the leader investor shall be at least

25%, and and do not go below this share for two

years after the COD



FiT

UNIT


Land


Owner

SPV

Establishmen

t GAFI


Grid Connection

Study

EETC Within 14 days

Grid Connection

Contract EETC


Approval EEAA



Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment

• The investor is allowed to build his projects either on public or private land

• NREA has set regulations for its allocated land , these include 1% bond for pre-construction, 2% during construction and 0.5% during first ten years of operation a which is raised on equal steps to reach 2% by the end on the project term

• NREA has set a cost sharing agreement for the infrastructure development and interconnection

• No extension of the land allocation after the end of the PPA term



FiT

UNIT

Availing the land & Development of the Bank Guarantee

Carry out measurements, studies, sign agreements with EETC, and get the

interim license from EgyptERA

Commercial operation

10 years after commercial operation

End of commercial

operation (20 or 25 Years)

1% of the project

estimated cost

2% of the project

estimated cost

0.5% of the

project estimated

cost

0.5% -2% of

the project

estimated cost

2% of the

project

estimated

cost

Dismantle

the equip.

and return

the land

Return Bank

Guarantee to

Investor

Implementation of the Project

FiT

UNIT

InterimLicense EgyptERA Within 1 Month

Land


Owner Within 2 Weeks

SPV

Establishmen

t GAFI

Within 15 days of

proposal to GAFI


Grid Connection

Study

EETC Within 14 days

Grid Connection

Contract EETC


Approval EEAA



Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment

• SPV (PC) established by qualified investors (consortium), which cease a land and conducted a pre-feasibility study are eligible to apply for an interim license

• The interim license can not be assigned to another PC without a prior approval from EgyptERA.

• The interim license is for one year extendable to a second year (it will not be extended in case of doing nothing)



FiT

UNIT


Land


Owner

SPV

Establishmen

t GAFII


Grid Connection

Study

EETC Within 14 days

Grid Connection

Contract EETC


Approval EEAA



Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment

• The study is done by EETC to verify the right of way as well as define the point(s) of common coupling.

• Scheme of defining losses shall be defined

• The study will define the necessary connection and transmission facilities

• The study shall comply with codes as well as the safe operation requirements



FiT

UNIT


Land


Owner

SPV

Establishmen

t GAFI


End

Grid Connection

Study

EETC

Grid Connection

Contract EETC


Approval EEAA



Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment

The standard connection contract will be signed by both EETC and the project company. Both parties are requested to complete the necessary appendices of the contract. The contract will be effect as the project company granted the generation license



FiT

UNIT


Land


Owner

SPV

Establishmen

t GAFI


Grid Connection

Study

EETC

Grid Connection

Contract EETC


Approval EEAA


Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment

• The PC shall make upfront studies which include the climate measurements (such as wind speeds, wind direction, temperatures, solar radiation, etc.) and Environmental Impact Studies e.g. bird migration, ,..etc.)

• Accordingly, approval should be acquired from EEAA after a public hearing session according to the environment law no.4 / 1994, Tuesday, April 21, 2015

Renewable Energy Development Schemes in Egypt 31


FiT

UNIT

Temporary

License EgyptERA

Land


Owner

SPV

Establishmen

t GAFII


Grid Connection

Study

EETC Within 14 days

Grid Connection

Contract EETC


Approval EEAA



Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment

Relevant Approvals and Permits

1. Ministry of Petroleum 2. Armed Forces 3. Civil Aviation Authority 4. Ministry of Agriculture and

Reclamation 5. Antiquities Authority 6. National Center for the Usage of

State-Owned Lands 7. Ministry of Information and

Communication 8. Ministry of Housing and

Development 9. Governorate where the project

will be implemented



FiT

UNIT

Temporary

License EgyptERA

Land


Owner

SPV

Establishmen

t GAFI


Grid Connection

Study

EETC

Grid Connection

Contract EETC


Approval EEAA


Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment

• A usufruct agreement is signed between the investor and the owner of the land (NREA/Public authorities) for the life time of the project

• In case of the public land the contract will be pending on granting the generation license

• This contract should be registered in case of private land



FiT

UNIT


Land


Owner

SPV

Establishmen

t GAFI


Grid Connection

Study

EETC

Grid Connection

Contract EETC


Approval EEAA


Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment

• The PC will be contracted according to the valid tariff on the financial closure date

• The contract will be terminated in the PC has not finalized all necessary studies and contract within 9 months or fulfill financial closure within 12 months from the day of signing

• The contract will cover both the project construction period as well as the project lifetime.

• This contract is not extendable beyond its original term.

• The obligations of the parties under this contract will come into effect only if the PC has granted the electricity generation license.



FiT

UNIT


Land


Owner

SPV

Establishmen

t GAFI


Grid Connection

Study

EETC Within 14 days

Grid Connection

Contract EETC


Approval EEAA


Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment

The PC has provided a letter from its lenders or their agent confirming that all conditions precedent to financial close and first disbursement under the financing agreements have been met or waived other than (1) the effectiveness of the PPA (2) signing the direct contract and (3) the issue of a permanent generation license.

The valid tariff issued by the PM decree at the day of Financial Closure



FiT

UNIT


Land


Owner

SPV

Establishmen

t GAFI


Grid Connection

Study

EETC Within 14 days

Grid Connection

Contract EETC


Approval EEAA


Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment

• Construction bond of EGP 15 Mil for 50 MW or EGP 5 Mill for 20 MW Project shall be issued with 10 days from the financial closure

• It will be replaced by the Operation bond which shall be submitted 10 days before the COD



FiT

UNIT

Temporary

License EgyptERA

Land


Owner

SPV

Establishmen

t GAFI


Grid Connection

Study

EETC Within 14 days

Grid Connection

Contract EETC


Approval EEAA



Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment

It is a four party agreement among the: • Project Company (PC), • Lender, • EETC, and the • Ministry of Finance where governmental guarantee provided by the Guarantor on behalf of Arab Republic of Egypt (Ministry of Finance) to guarantee the payment obligations arising out of the breach, default, or non-performance by EETC under the PPA.



FiT

UNIT

Temporary

License EgyptERA

Land


Owner

SPV

Establishmen

t GAFI


Grid Connection

Study

EETC Within 14 days

Grid Connection

Contract EETC


Approval EEAA



Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment

Generation License

• The permanent generation license is granted

covering the life time of the PPA including

the construction period.

• Having the permanent license entitles the

effectiveness of all agreements and

contracts

• The generation license shall not be

terminated unless the PPA is terminated.



FiT

UNIT

Temporary

License EgyptERA

Land


Owner

SPV

Establishmen

t GAFI


Grid Connection

Study

EETC Within 14 days

Grid Connection

Contract EETC


Approval EEAA



Permits



Owner

Power Purchase

Agreement EETC



signing date

Construc

tion

Bond Investor

Direct


EETC and

lender

Generation

License


Lifetime

First

Disburse

ment lender

Construc




All Agreements and


Fit

Commitment

Should not Exceed 180 days from the requested COD



FiT

UNIT

Areas

Capacity

MW

Areas

(km2) Zone

3550 1220 Suez Gulf (wind)

5800 841 wind East Nile

34900 1290 Solar

25350 3636 wind West Nile

17400 606 Solar

1800 37 Benban (Solar)

260 7 Kom Ombo (Solar)

East Nile

West Nile

Benban

Suez Gulf

Land for RE

7650 KM2 were allocated for

Implementing RE projects

Kom Ombo

Yellow shaded cells represent the available areas

Renewable Energy Development Schemes in Egypt Tuesday, April 21, 2015 41

FiT

UNIT

Thank you for your attention [email protected]

[email protected]

7000 years ago we

cherished the sun

We still do

FiT UNIT Renewable Energy Development Schemes …...2015/04/20 · FiT UNIT Power generation...

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Transcript of FiT UNIT Renewable Energy Development Schemes …...2015/04/20 · FiT UNIT Power generation...