Case Studies to Illustrate the Role of Technology
and Business Enabling Environment and
Ecosystem
Debarshi Gupta Research Associate, WISE
Indonesia National Stakeholders’ Workshop on Accessible and Affordable Sustainable Energy Options
Three Case Studies
1.
Husk Power System in Bihar Province in India
2.
Proposed Business Models for Community RE
based Off-Grid Projects
–
India
3.
Small Power Producers Program (1992) and Very
Case Study :1
HUSK
POWER SYSTEM IN BIHAR
Households with no access to electricity
15.73 million (83%)
Households using solar lighting systems
0.1 million (0.5%)
Households having access to electricity for lightning
3.09 million (16%)
Total No of Households
18.94 million
Technology Enabling Environment
83% households in the province do not have access to centralized
grid electricity
Availability of ample as well as cheap manpower who can be
engaged in O&M of plants
Bihar province produces around 4.7 million MT of rice per annum
from which about 1.34 million MT rice husk can be made
available.
Ample quantity of rice husk offers a cheap source of fuel supply
for power generation projects.
Local supply chain.
Technology Description
Multi-fuel Gasifiers: Gasifiers can use multiple types of feedstock such as
Rice husk
Wheat husk
Mustard stems
Corn cobs
Wood chips
Unique Gasifier Design: Allows for easy disposal of biomass char, lack of which results in tar formation.
Remote Plant Monitoring System: Low cost system to monitor plant performance via internet.
Pre-paid Meters: Enables electricity to be sold like mobile phone talk-times where consumers get
their meter charged with the amount of money they have and the meter automatically disconnects supply after the credit is exhausted.
To minimize the cost, locally available gasifiers are used with modified gas engines that are able to
operate 100% producer gas.
HPS uses standard biomass gasification technology which is suitable for rice husk based power
Biomass Gasifier System
Filters
Financial assistance from the Government of India up to 90% of installation cost
for decentralized distributed RE generation technologies.
As per the section 14 of Electricity Act, 2003, RE based stand alone/off-grid
projects established by a person for generation and distribution of electricity in
the notified rural area by the state government shall not require any license for
such generation and distribution of electricity.
As per Rural Electrification Policy of GoI , persons exempted under the section 14
from licensing would be free from licensing obligations and the purview of the
appropriate Commission in matters pertaining to determination of tariffs and
universal supply obligations applicable to licensees.
Access to finance from commercial banks.
Access to market by substituting diesel based power with rice husk based power.
1 • Cost of Rice Husk: 2.0 to 2.4 US Cents per Kg
2 • Load provided to Consumers: 2 CFLs of 15W each
3 • SupplyHours: 7-8 Hrs per day
4 • Requirementof Rice Husk: 50-60 Kg per Hour
5 • Manpower Requirement: 4-5 people per plant
6 • Distribution Area Covered: 1-2 Km Radius
7 • ROI allowed by Central Bank of India: 12.25%
8
• Average Tariff paid by Consumer: 33 to 38 US Cents per kWh
9 • Project Cost Includes Power Generation Plant and Basic Power Distribution Network excluding cost of poles
Implementation Arrangement
$ 290, 25% $ 339, 30% $ 81, 7% $ 145, 13% $ 290, 25%
Approx. Cost Component for a 32 kW System
Cost of Husk O & M Cost
Maintenance Expenses Misc Expenses
EMI to Bank
$968, 74% $ 242, 19% $ 81, 6% $ 16, 1%
Approx. Expected Revenue from 32 kW System
Revenue from Dom. Users (Rs 150x400 Consumers)
Collection from Cottage Industries
Sale of Bio Char
Revenue from CDM Benefit
Global
Footprint
Husk Power Business Profile
BOOM (Build, Own, Operate & Maintain) BM (Build & Maintain) BOM (Build, Operate & Maintain) BOOM
• All activities may be done at its own by engaging local people also
BOM
• System may be owned by self while all associated activities may be
outsourced.
BM
•All activities except collection of revenue etc. may be kept in own hands.
Case Study : 2
Issues in Operation of RE Based
Off-grid Projects
The investment cost and cost of generation of RE based off grid
project is high.
Consumers are reluctant to pay the higher rate for purchase of
electricity compared to subsidized electricity tariff offered by
utility in the adjoining electrified area.
Low paying capacity of consumers located in remote area.
In the absence of regulatory oversight, chances of exploitation
of the consumer by the investors by charging high tariff.
Characteristics of Proposed Business Model
Business model proposed must work in off-grid & grid connected
set up
Consumer should not pay more than electricity tariff in adjoining
areas (not more than DISCOM tariff) / existing expenditure on
lighting load
Compliant with EA 2003, existing policies
Create structure for flow of subsidy
As far as possible, internalization of costs of Rural Electrification
Should make use of existing institutional structure
Institutional & Contractual Structure
Roles & Responsibilities of
Key Stakeholders (1/3)
Government of India
Provide CFA to DISCOM to support Off-grid RE projects
Forum of Regulators
Model Regulations for Off-grid Renewable Energy Generation and Supply
Develop guidelines for development of feed-in tariff for small scale renewable energy generators
for off-grid supply
Central Electricity Authority
Develop model grid connectivity guidelines for small RE systems
State Electricity Regulatory Commission
Adoption of Model Regulations with suitable adjustments to take into consideration state specific
factors
Notify State Regulations for Regulations for Off-grid Renewable Energy Generation and Supply
DISCOM
Must allow each project on “first come first serve” basis
DISCOM submit tariff petition to SERC for determination of retail supply
tariff
Enter into Franchisee Agreement and PPA with PD
Provide FIT to PD;
Request to GoI for CFA if / as required
Take into consideration off-grid schemes while planning grid expansion
Rural Local Body
Confirm un-electrified status of village / hamlet / pada
Confirm number of households & establishments
Provide consent to PD for generating and distributing electricity
ODGBDF
Identification of project scheme
Finalization of technology based on resource availability
Confirm State Government’s notification of rural area from RLB
Undertaking of prefeasibility study
Development of DPR
Agreement b/w DISCOM and PD
Financial closure & project commissioning
Provide electricity to consumers and receive tariff as paid by consumer of local
DISCOM
Receive FIT minus consumer tariff from DISCOM
Consumer
Pay charges to ODGBDF
Case Study 3
Small Power Producers Program (1992)
and
Rationale
80
% of Thailand’s total primary energy consumption
comes from fossil fuel.
The SPP programme was launched in 1992 and the
VSPP programme was launched in 2002 in view of
utilizing alternative energy as a major source of energy
supply in the country for replacing oil import.
To ensure energy security of the country.
To promote an integrated green energy utilization in
communities.
To enhance the development of alternative energy
Salient features of SPP & VSPP
SPP VSPP
Small Power Producers
( > 10 MW - ≤ 90 MW)
Very Small Power Producers ( ≤ 10 MW)
The program is designed to sale electricity to EGAT
The program is designed to sale electricity directly to the distribution utility ( MEA & PEA )
Tariff is set as per avoided cost of generating electricity by EGAT
The tariff is set equal to the wholesale rate the distribution utility pays to EGAT
Power purchase contract signed for 5-25 years Regulation on VSPP allowed net metering and simplified interconnection procedures
Rates proved suitable for biomass based power project only
Other RE resources are viable in this regulation
As of June 2011 , 2201 MW projects were under operation / consideration
Provision of “ Adders” to Stimulate RE
Development
Thailand’s “adder” program, ensures guaranteed purchases and
attractive tariff rates to eligible grid-connected renewable power
projects. The policy directive was implemented in early 2007.
The program is called “adder” because it adds additional payment to
RE generators on top of the normal prices that power producer would
receive when selling electricity to the power utilities.
The amount of adder varies, depending on the RE technology used . The
provision will be for 7 years from COD.
In case of SPP using biomass as source of energy the adder rates are
Renewable
Cogeneration
Cogeneration
Promotion
• Fixed Adder cost
500 MW 530 MW
SPP
(> 10 MW-< 90 MW
Fuel ฿ /kWh Special
*
Biomass 0.30 –0.50 1.00
Biogas 0.30 –0.50 1.00
Mini-Hydro (50-200 kW) 0.80 1.00
Micro-Hydro (< 50 kW) 1.50 1.00
MSW 2.50–3.50 1.00
Wind 3.50– 4.50 1.50
Solar 8.0 1.50
VSPP
(< 10 MW)
• Adder cost for renewable power producers by term of support for 7 years and 10 years for power generation from wind and solar;
SPP 115 3.50 Wind 15 8.00 Solar 0.30 2.50 Adder
(Baht/kWh)
300 Other Renewable 100 MSW 530 Total Capacity (MW) Type Fixed Bidding
*special cost in 3 provinces in Southern of Thailand
Adder cost of power generation from RE
Renewable
Project Feature: Set up fund to promote investment in energy conservation and renewable energy development projects
•
Revolving Fund with 4% interest rate & 7 years of payment term;
•
Encourage RE project to be CDM project;
•
ESCO Venture Capital
Technical Assistance
ESCO Venture Capital Equipment Leasing
Carbon Market
Equity Investment
Credit Guarantee Facility
Energy Conservation Promotion Fund
ESCO Fund
Business Enabling Environment
The objective is to stimulate more than THB 1,250 million (USD 40 million) investments in renewable energy and energy
Subprojects to Achieve Objective of the ESCO Fund (1/2)
ESCO Venture Capital.
Capital will be raised in partnership with Energy Service
Companies (ESCOs) to raise capital for investments in energy saving projects of the
ESCO. Investment criteria applied are: i) size of equity investment is 30 percent of
registered capital but limited to THB 50 million per project; ii) investment period of
5-7 years; iii) exit method of selling back the shares to the entrepreneur, or find
new strategic partners and; iv) board seat is required in the company.
Equity Investment.
The ESCO fund will make equity investments in energy efficiency
or renewable energy projects. Investment criteria applied are: i) size of equity
investment: 10-50 percent of total investment cost but limited to THB 50 million per
project; ii) investment period of 5-7 years; and iii) exit method of selling back the
shares to the entrepreneur, or find new strategic partners.
Equipment Leasing.
The leasing criteria include: i) 100 percent of equipment cost
Subprojects to Achieve Objective of the ESCO Fund (2/2)
Carbon Market.
The ESCO fund will support project owners in developing
CDM documents, Project Idea Note (PIN) and Project Design Document
(PDD).
Technical Assistance.
The ESCO fund will provide financial support for
technical assistance, e.g. energy audit, feasibility study. The support is
limited to THB 100,000 per project and this support must be reimbursed to
the ESCO Fund.
Lessons Learned
SPP and VSPP programs have provided impetus to renewable
energy sector of Thailand which in turn has helped the country to
diversify its energy sources.
Use of indigenously available renewable energy resources has
reduced country’s reliance on import.
