Arsalan

Eco Sized Solar PV Farm Up to 100MW Proposed to be at South Punjab 1 Introduction Background Brief • The current feasibility report caters to the study of an economically sized photovoltaic solar power generation farm in South Punjab to offset the PARCO power consumption overheads of the MCR Refinery. • This Study is envisaged to assess the feasibility of an economically sized PV Solar Farm (PVSF) up to 100MW, in South Punjab possibly in the Multan/Bahawalpur area. • The economic viability is based on comparison of three suggested denominations of 100MW (AC), 50MW (AC) and 30MW (AC) name plates. • The DC name plates are slightly higher and vary from 1.12 times to 1.38 times of the AC rating based on simulation and sizing requirements and power conversion constraints. • These three different nameplate sizes (Power Denominations) are referred to as “Option I, Option II and Option III for 100MW, 50MW & 30MW respectively. • Each of the above said Options was further queried for sensitivity to market price fluctuations on a yardstick of ‐20% to +20%, resulting in three different “Scenarios” for each of the given “Options”. Hence the following assumption hold true: • 1. Scenario I ‐ Expected (based on mentioned price assumption); • 2. Scenario II ‐ Best Case (i.e. Price reductions (CAPEX/OPEX) due to market forces by a factor of ‐20%); • 3. Scenario III ‐ Worst Case (i.e. Price escalation (CAPEX/OPEX) due to market forces by a factor of +20%); • 4. Scenario IV ‐ As per latest developments all public tenders and public lands based PV Solar and other renewable energy project have been made to comply with competitive bidding modus operandi, however, currently there is no mechanism available for Competitive bidding. Whereas, last available tariff for QASP 0.06USD/kWh has been considered for relevant financial calculations only. This scenario therefore, will just be for informational analysis only. 2 Project Specific Regulatory Info Modus Operandi • The upfront tariffs awarded by NEPRA previously have been abandoned in favour of a competitive bidding structure to be announced shortly. • As such offsetting one’s own power consumption through net metering/wheeling is the best and most feasible option for upcoming solar PV projects sponsored by large industrial setups in Pakistan. This option also allows to significantly cut down on official application requirements and red tape as the contract is “Bilateral”. More on this has been explained in detail in Wheeling Section. • An exact rate of Wheeling Charge could not be endorsed by either NEPRA or the DISCOs on the plea that this is only possible once the application is filed for tariff determination (Wheeling). However, the generally applicable rate as per CPPA‐G website is as follows: Use of System Charge is calculated as: UoSC = USCF + USCV ‐ Where, USCF = Fixed Use of System Charges & USCV = Variable Use of System Charges. USCF = PKR102.43/kW (MDI) & USCV – PKR 0.2367/kWh x (LAL which is assumed to be 1 for now). • Since the proposed PVSF sites are not far from MCR the Wheeling charges will be within the suggested nominal rate/kWh enabling us to consider the assumptions in the feasibility to be reasonably accurate. A Detailed approach to Wheeling is given in the subsequent slides to enable us to understand the exact process involved from the application to actual modus operandi as per CPPA rules and currently applicable legislation. • A detailed section catering to full details about application & operational aspects of Wheeling of electricity is appended in this presentation. 3 Utility Scale Solar PV – Why its Successful? • The graphic illustration depicts the net power generating capacity added in 2017 categorised by technology. • The Solar installations stand out with the largest chunk of these installations. • The boost in solar installations is to a large extent a result of its spectacular cost development. • The record low solar prices that were achieved in 2016. That year, bids awarded in several tenders were below the 3 US cent per kWh level (2.95 US cents for an 800 MW project in Dubai, 2.91 US cents for a power supply contract in Chile, 2.42 US cents for the ‘winter’ supply part of the 1.18 GW plant PPA in Abu Dhabi). In February 2018, a 300 MW tender in Saudi Arabia was won by local company ACWA Power at a new world record low price of 2.34 US cents/kWh, while the first seven shortlisted bids were all below 2.90 US cents/kWh. • In conclusion, these solid trends worldwide prove beyond doubt, once and for all that Solar PV is a major player in the renewable energy market in the foreseeable future based on its competitiveness as well as technology maturity. • The rock bottom prices may not prevail forever based on demand & supply crests/troughs. There may not be a better time to opt for large scale/commercial solar PV projects as per current favourable situations on most levels including technical, permitting and quick ramp up of projects based on available production capacities of Solar PV components manufacturers. • Add to it the increasing efficiencies of all components specially PV modules and we have a very promising situation to consider SPVFs. 4 Renewable Energy Vs Conventional Power Generation 5 Project Siting • The most appropriately featured sites are mostly located in Muzaffargarh and adjoining areas of Layyah Districts. • Some areas of Bahawalpur (Cholistan near Lal Sohanra) are also worth considering given their cheaper rates and proximity to the QASP where the grid infrastructure is also available. • One of the main features of these areas is proximity to many denominations of HTB infrastructure (66kV/132kV/220kV/500kV), most suitable of which is 132kV based on some NEPRA considerations, although the CPPA can purchase produced power at any Voltage rating above 11kV. • One prospective site for PARCO PV Solar Farm is located in Muzaffargarh District on the Eastern side of Chowk Munda.. • The second prospective site for PARCO PV Solar Farm is located in Layyah District on the Eastern side of Chowk Azam in District Layyah near Chaubara. 6 PV Power Harvest ‐ Specific Yield/Loss Analysis 7 Introduction What is Solar PV? • Photovoltaics (PV) is a method of generating electrical power by converting solar radiation into Direct Current (DC) electricity using semiconducting materials that exhibit the photovoltaic effect (whereby sunlight causes electron transfer across bands of material to produce voltage between two electrodes). • Photovoltaic cells are thin, flat tiles with a blue/black glass‐ like appearance, built to exploit this process. They are made from ‘wafers’ of high purity crystalline silicon and can be put together into modules of a wide variety of power outputs, shapes and sizes. • Solar PV is growing rapidly from a small base, with over 100 countries now sourcing some of their power this way. Total global solar capacity added in 2017 alone was 98 GW. 8 Solar PV Farm – Concept Diagram 9 Solar PV Farm – 2.5MW (AC) Each Modular Block Concept 10 PARCO Solar PV Farm – SLD / LAYOUT CONCEPT P V A R A Y S P V S T R I N G S S T R I N G S C O M B I N E R D C C O N S O L I D A T I O N D C B R E A K E R S D C / A C R E C T I F I E R A C B R E A K E R S SCADA LV TO MV STEP UP MV SWITCHGEAR TO LOCAL MV LOOP 11 Solar PV Farm –Plant Configuration & Feeders Interconnection 12 Solar PV Farm – Monitoring & Control – SCADA System 13 Solar PV Farm – SCADA System – Features & Possibilities 14 Solar PV Farm – SCADA System – Plant Control 15 Financial Analysis of 3 Options ‐ 100MW, 50MW, & 30MW OPTION I 100MW – Scenarios Comparison AC Nameplate Denomination PARCO MCR Load Offset % Option I ‐ 100MW Expected Option I ‐ 100MW Best Case Option I ‐ 100MW Worst Case QASP ‐ 100MW Expected Case 84.84% 84.84% 84.84% 84.84% CAPEX IN US$ '000 101,277 81,021 121,532 93,176 Tariff Per KW- Project/Un‐ leveraged IRR 21.10% 25.13% 18.06% 10.24% Project Payback Period- Project NPV @ 15% in US$ 000 45,744 65,577 25,910 (31,924) Leveraged / Equity IRR 39.99% 56.38% 29.59% 11.54% Equity Payback Period- Equity NPV @ 15% in US$ 000 65,519 82,303 48,734 (12,149) DSCR- Option II 50 MW Scenarios Comparison AC Nameplate Denomination Option II ‐ 50MW Expected Option II ‐ 50MW Best Case Option II ‐ 50MW Worst Case PARCO MCR Load Offset % 46.56% 46.56% 46.56% CAPEX IN US$ '000 58,368 46,695 70,042 Tariff Per KW- Project/Un‐ leveraged IRR 19.22% 24.34% 15.65% Project Project NPV @ Payback 15% in US$ 000 Period 5.67 18,-,-,222 Leveraged / Equity IRR 34.12% 54.68% 23.23% Equity Payback Period- Equity NPV @ 15% in US$ 000 29,926 42,394 17,459 DSCR- Option III 30 MW Scenarios Comparison AC Nameplate Denomination PARCO MCR Load Offset % Option III ‐ 30MW Expected Option III ‐ 30MW Best Case Option III ‐ 30MW Worst Case 27.94% 27.94% 27.94% CAPEX IN US$ '000 35,996 28,797 43,195 Tariff Per KW- Project/Un‐ leveraged IRR 18.73% 23.73% 15.22% Project Payback Period- Project NPV @ 15% in US$ 000 9,-,- Leveraged / Equity IRR 32.43% 51.99% 22.14% Equity Payback Period- Equity NPV @ 15% in US$ 000 17,113 24,762 9,464 DSCR- 16 17 Project Time Line ‐ 100MW AC – Permitting & EPC Stages PARCO PVSF 100MWp EPC Expected Timeline Select a Week to highlight at right. A legend describing the charting follows‐‐> Week Highlight: Plan Duration 1 Actual Start % Complete Actual (beyond plan) % Complete (beyond plan) PARCO PVSF 100MWp Permitting Expected Timeline ACTIVITY EPC Negotiation & Contracts PLAN START PLAN DURATION ACTUAL START ACTUAL DURATION 1 8 1 6 Detailed Design ACTIVITY 6 4 PLAN START 20 6 12PLAN DURATION 4ACTUAL 20 100% 11ACTUAL PERCENT 100% DURATION Site Levelling NEPRA Wheeling & Project 10 Excavation/Trenching, Solar Permitting Water Pumps 12 Land Earmarking Cable Laying AC 20 MV/HV Stations Construction 24 Screw Pile Ramming 21 Installation of Mounting Secure Land/Establish Control Frames 23 Interconnection Agreements PV Modules Mounting 26 MEPCO of Combiner Installation Boxes 26 DC Cabling 30 Containerised Inverters/MV PMTs 28 16 28 15 100% HV Transformers Inst. 34 8 34 9 100% Grid Connection 44 4 44 5 100% Comissioning 49 2 49 3 100% Project Financing Arrangements 14 40 12 1 7 12 10 30 14 14 6 36 14 20 24 8 16 23 27 1 7 30 60 12 12 40 30 14 15 6 40 14 100% Plan Duration Actual Start % Complete Actual (beyond plan) % Complete (beyond plan) WEEKS- 100% 100% 100% 100% 100% 100% 10 20 16 40 100% 2 100% 14 26 12 13 12 21 14 40 1 12 14 40 10 2 COMPLETE 12 1 12 Week Highlight: Design Review Land Procurement 2 START WEEKS- 100% Select a Week to highlight at right. A legend describing the charting follows. Equipment Order PERCENT COMPLETE 100% 100% 100% 100% 100% 14 100% 100% Trial Run 52 8 52 8 100% Acceptance & Handover 60 1 60 1 100% 17 Pakistan’s Electricity Market Framework Understanding Wheeling ‐ Electricity Market Framework 18 Legal NEPRA Act 2018 Policy National Electricity Policy & Plan Regulatory Generation Transmission System Operator Market Operator Distribution Markets Market Rules, Power Procurement Rules Electricity Act 1910 Power Policy 2013 Public Sector System Operator (SO) K‐Electric Planner Distribution Wire Business (Regulated) Single Buyer Metering Service Provider Operational Planning Supply = Demand Agency Role 1994, 2002, 2015 Wheeling, Competitive Bidding, Import Regulations Grid, Commercial and Distribution Codes IPPs Transmission Network Operator (TNO) Constitution Parliament CCI/MoE NEPRA Regulated to Competition NTDC Regulated Service Provider NPCC Regulated Service Provider Billing & Settlement Market & Product Development CPPA Regulated Service Provider Metering Service Provider (Regulated) Sales or Supply Business (Competition) DISCOs/KE Competitive Wholesale Competitive Retail Increase Competition 18 Understanding Wheeling – Regulatory (NEPRA) Rules Regulations NEPRA Tariff Standards and Procedure Rules NEPRA Licensing (Application and Modification Procedure) Regulations NEPRA Licensing (Distribution) Rules NEPRA “Consumer Eligibility Criteria” NEPRA Licensing (Generation) Rules NEPRA Interim Power Procurement (Procedure & Standards) Regulations NEPRA Performance Standards (Distribution) Rules NEPRA Competitive Bidding Tariff (Approval Procedure) Regulations NEPRA Performance Standards (Transmission) Rules NEPRA (Alternative & Renewable Energy) Distributed Generation and Net Metering Regulations NEPRA Performance Standards (Generation) Rules NEPRA (Supply of Electric Power) Regulations NEPRA (Market Operator Registration, Standards and Procedure) Rules NEPRA (Interconnection for Renewable Generation Facilities) Regulations Guidelines NEPRA (Sale of Electric Power by Renewable Energy Companies) Guidelines 19 Codes Distribution Code Manuals Consumer Service Manual Grid Code Commercial Code NEPRA (Wheeling of Electric Power) Regulations NEPRA (Import of Electric Power Regulations, 2017 19 Understanding Wheeling – High Level Application Process Enabling Features of Wheeling of Electrical Power (WoEP) Wheeling Services Transmission Licensee (TL) ‐ DISCOs Non‐Discriminatory Open Access ‐ Report on Electric Power Capacity (Trans. /DISCOs) Dedicated Transmission and Distribution Facility Licensed Generation Company Submit the Application Transmission and Distribution Company Accept or Reject Prerequisites Second‐tier Supply Authorization by Authorityy Proposed Buyer /Consent/PPA of buyer TL/DISCOs shall accept the application unless it does not fulfill all the requirements regarding interconnection as required under the Distribution Code and Grid Code 20 Understanding Wheeling – Documentation and Application Process to Avail Wheeling Enabling Features of WoEP ‐ ‐ Wheeling Services Transmission Licensee (TL) DISCOs Non‐Discriminatory Open Access Report on Electric Power Capacity (Trans. /DISCOs) Dedicated Transmission and Distribution Facility Prerequisites Second‐tier Supply Authorization by Authority Proposed Buyer /Consent/PPA of buyer Approval of Authority on Rejection Not ‐ Satisfied Reject Submission of Application Non‐ Refundable Fee (Determined by NTDC or DISCO) Applicant (licensed Generation Company) Details: ‐ ‐ ‐ ‐ ‐ Proposed geographical location Quantum of power to be wheeled? Entry and Exit Point Consent/PPA of buyer Commencement of Date WoP Fails to Commence Wheeling ‐ Transmission and Discos reserve 18 months slot for WoP ‐ Cancellation of WA TL/DISCOs Accept (according to Acknowledgment 10 Days GC/DC requirements) Satisfied Connection Agreement Submission of Bank Guarantee (upto 100 US$/ MW) Submission of WA to Authority Generator Avails the Wheeling *WoP: "Wheeler of Power" means an Applicant whose application for wheeling has been accepted by the Transmission Licensee or/and DISCO as the case may be. 30 Days Execution of Wheeling Agreement (WA) ‐ WoP* and DISCO ‐ WoP, DISCO and TL ‐ WoP and TL 21 Understanding Wheeling – Documentation and Application Process to Avail Wheeling Enabling Features of WoEP ‐ ‐ Wheeling Services Transmission Licensee (TL) DISCOs Non‐Discriminatory Open Access Report on Electric Power Capacity (Trans. /DISCOs) Dedicated Transmission and Distribution Facility Prerequisites Second‐tier Supply Authorization by Authority Proposed Buyer /Consent/PPA of buyer Approval of Authority on Rejection Not ‐ Satisfied Reject Submission of Application Non‐ Refundable Fee (Determined by NTDC or DISCO) Applicant (licensed Generation Company) Details: ‐ ‐ ‐ ‐ ‐ Proposed geographical location Quantum of power to be wheeled? Entry and Exit Point Consent/PPA of buyer Commencement of Date WoP Fails to Commence Wheeling ‐ Transmission and Discos reserve 18 months slot for WoP ‐ Cancellation of WA TL/DISCOs Accept (according to Acknowledgment 10 Days GC/DC requirements) Satisfied Connection Agreement Submission of Bank Guarantee (upto 100 US$/ MW) Submission of WA to Authority Generator Avails the Wheeling *WoP: "Wheeler of Power" means an Applicant whose application for wheeling has been accepted by the Transmission Licensee or/and DISCO as the case may be. 30 Days Execution of Wheeling Agreement (WA) ‐ WoP* and DISCO ‐ WoP, DISCO and TL ‐ WoP and TL 22 Understanding Wheeling – Banked Energy • Wheeling Regulation Says: • Section 11 : Banked Energy : (1) Where Transmission Licensee or DISCO fails to transport Input Energy to an Exit Point of Transmission Licensee or DISCO in terms of wheeling instructions in that month or a BPC is unable to accept delivery of Output Energy at Exit Point of Transmission Licensee or DISCO in that month such banked electrical energy shall be delivered to the Exit Point of Transmission Licensee or DISCO, requested by the Wheeler of Power within the time period as mutually agreed by the parties in the Wheeling Agreement. • (2) A Transmission Licensee or a DISCO as the case may be, shall be liable to pay Liquidated Damages to the Wheeler of Power for its failure to transport Input Energy to Exit Point(s) of its respective Transmission/Distribution system. • (3) In case a Transmission Licensee or a DISCO fails to deliver the banked energy to Exit Point(s) of that Transmission Licensee or DISCO within time period as requested by the Wheeler of Power, the Transmission Licensee or DISCO regardless of any liquidated damages under sub‐clause (2) above shall also be liable to pay the Liquidated Damages for such failure. 23 Understanding Wheeling – Shortfall • Wheeling Regulation Says: • Section 13 : Shortfall: • (1) In the event of failure of the Wheeler of Power, except a Force Majeure Event, to deliver the Input Energy as stated in the wheeling instructions already notified to Transmission Licensee or DISCO in that month, such Transmission Licensee or DISCO shall be entitled to receive Liquidated Damages from the Wheeler of Power for any such shortfall. • (2) For any shortfall in the Committed Capacity that the Wheeler of Power is unable to deliver to Transmission Licensee or DISCO, the Transmission Licensee or DISCO may opt to continue to supply to the relevant Bulk Power Consumer(s)for such shortfall of power on request of Wheeler of Power and shall invoice the Wheeler of Power at the tariff approved by the Authority. 24 Understanding Wheeling – Optional Sale • Wheeling Regulation Says: • Section 12 : Optional Sale: • On request of the Transmission Licensee or DISCO, the Wheeler of Power may have option (but not the obligation) to sell the banked energy to the Transmission Licensee or DISCO. Upon exercise of this option by the Wheeler of Power; the Transmission Licensee or DISCO shall pay for such banked energy at such rate approved by the Authority. Provided that the Wheeling Charges shall not be applicable for sale of any banked energy to the Transmission Licensee or DISCO. 25 Understanding Wheeling – Overdrawing • Wheeling Regulation Says: • Section 14 : Overdrawing • Where a Bulk Power Consumer draws electrical power in excess of Output Energy at Exit Point(s) of the Transmission Licensee or DISCO, the Wheeler of Power shall pay to transmission Licensee or DISCO according to tariff determined by the Authority. 26 Understanding Wheeling – Liquidated Damages • Wheeling Regulation Says: • Section 15 Liquidated Damages : • (1) The amount of liquidated damages payable for failure of the Transmission Licensee or DISCO as the case may be, to transport the Input Energy under these regulations shall consist of the actual loss suffered by the Wheeler of Power. • (2) The amount of liquidated damages payable for failure of the Wheeler of Power to deliver the Input Energy under these regulations shall consist of the actual loss suffered by Transmission Licensee or DISCO as the case may be. 27 Proposed Competitive Bidding – Tariff Regulation 7 Days Relevant Agency Distribution Companies Transmission Licensee Functionary of Provincial Gov. Functionary of Federal Gov. Registrar RFP Content of RFP Generation Tariff ‐ Quantity of Energy To be purchased in MW ‐ Tariff Structure for expected life of project ‐ Summary of type of project, fuel type, availability, plant size, location, details of system interconnection, ‐ Expected date of commencement of supply Transmission Tariff ‐ Voltage Level ‐ Quantum of Energy Tobe transferred ‐ Length of Transmission line ‐ Level of losses and design specifications ‐ Technical specifications of conductors and wires Proposed term of contract Proposed price mechanism and cost parameters Construction milestone Model of PPA,EPA or TSA Condition and criteria for bid disqualification Bidding Methodology and bid evaluation methodology Authority Apply for Tariff 15 Days Approved RFP Benchmark Tariff Bidding By RA Published in ‐ 5 Newspapers wide nation circulation ‐ 3 Newspapers wide international circulation ‐ Relevant international & local procurement websites Bidding Process Biding Methods: ‐ Seal bid ‐ Descending clock ‐ Hybrid ‐ Combinational ‐ Two sided Method Successful bidder NEPRA Bid Evaluation Report By RA to Registrar 28 Way Forward.. 1. Agree on 2nd Stage EPC Consultancy/Assistance with Permitting & Economical Land Procurement. 2. Internal Approval 3. Finance Arrangement 4. Award EPC Contract. 5. Make 1st Payment as per Contract. 6. Establish a Liaison Group to coord progress with EPC via Consultants. 7. Milestones Assessment & Attached Payments. 8. Testing & Commissioning Acceptance. 9. Handing Over 10. COD. EMPLOYERS TASK CONSULTANTS TASK 1. Agree on 2nd Stage EPC Consultancy/Assistance with Permitting & Economical Land Procurement. 2. Site Finalisation after Last Latest Site Analysis as to Suitability to Wheeling Network. 3. Site Procurement 4. Initiation of Dialogue with MEPCO for Wheeling Assistance. 5. Start of Wheeling Application Process. 6. EPC Coy Selection 7. Final Equipment List Approval as per latest available models. 8. Establish Site Office General/Practical Steps to PARCO PVSF 29 Questions & Discussion 30