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

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Presentation on theme: "SRI LANKA SUSTAINABLE ENERGY AUTHORITY Sri Lanka Sustainable Energy Authority Resource Allocation for On-grid Renewable Energy Project Development : an."— Presentation transcript:

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

2 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

3 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Background Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants 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Renewable Energy Projects Regulation 2009 published in Gazette No. 1599/6 of 27 th April 2009 is to be amended (not repealed as contemplated earlier) – A new regulation with new schedules was gazetted on 31 May 2011 (Gazette No.1705/22 of 10 th May 2011) – Effective date 10May, 2011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

4 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Background Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants Granting EP Effects of Delays PPA and Tariffs Cancelled PA and EP

5 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Applying for PA Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants 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

6 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Applying for PA Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants 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

7 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Applying for PA Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants 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 thereofLKR 100,000 Each additional 1,000 kW LKR 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 ?

8 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants 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 DGs recommendation to PAC – The success will be based on a comprehensive marking scheme

9 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants Granting EP Effects of Delays PPA and Tariffs Cancelled PA and EP Pass Project Aspect InvestigatedMarksMark How far the Developer has proceeded2310/23 Provisional Approval status : Extension requested2 Extension for Provisional Approval obtained3 Letter of Intent from CEB obtained5 Divisional Secretarys no objection obtained2 Local Authority approval realised2 National Water Supply & Drainage Board approval obtained2 Department of Agrarian Services approval obtained1 Department of Irrigation / Coast Conservation approval obtained2 Forest Department approval obtained2 Department of Wild Life Conservation approval obtained2 Environmental Clearance10 Registration5 Terms of Reference obtained3 Environmental approval issued2 Level of effort of Developer 5020/50 Initial survey carried out5 Pre-feasibility study report available2 Detailed survey plans available8 Full feasibility study report available9 Layout confirmed after site inspection2 Full weather cycle resource assessment report available8 IEE or IEA report submitted to approving authority5 Land acquisition / vesting completed8 Land ownership identified / tenement list submitted to SEA3 How optimally the resource has been harnessed3 Installed capacity accurately calculated1 Energy yield accurately estimated2 Financial and technical capability14 Equity support documents provided5 Bank references provided3 Audited accounts / sound bank statements provided3 Volume of transactions of partners declared3 Total10030/100

10 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Results of the Evaluation Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants Granting EP Effects of Delays PPA and Tariffs Cancelled PA and EP Marks %No of ProjectsMW > >87187 Total

11 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Pre-feasibility and Consultants Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants 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 ?

12 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Granting PA Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants Granting EP Effects of Delays PPA and Tariffs Cancelled PA and EP A Provisional Approval will be granted by PAC, based on the DGs recommendation DGs 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.

13 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Granting PA Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants Granting EP Effects of Delays PPA and Tariffs Cancelled PA and EP A three phase approach is proposed

14 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Granting PA Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants 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

15 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Granting EP Reapplications Background Applying for PA Prefeasibility & Consultants 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 Granting PA

16 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Effects of Delays Accrued Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants 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

17 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Power Purchase and Tariffs Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants 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

18 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Cancelled PA and EP Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants Granting EP Effects of Delays PPA and Tariffs Cancelled PA and EP 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

19 SRI LANKA SUSTAINABLE ENERGY AUTHORITY Cancelled PA and EP Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants Granting EP Effects of Delays PPA and Tariffs Cancelled PA and EP 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 project Aspect InvestigatedMarks Quality of bid20 Quality of proposal3 Implementation timeline5 Qualifications of key people2 Local value addition ratio10 How optimally the resource has been harnessed10 Installed capacity accurately calculated5 Energy yield accurately estimated5 Financial strength15 Equity support documents5 Bank references3 Strong audited accounts5 Volume of transactions of partners2 Past experience15 In similar projects (documented)10 In project management (documented)5 Financial consideration40 NPV of revenue stream40 Total100 Table 3 : Marking Scheme (Auction Process) Note:Information provided by applicants is subject to validation by directly contacting reference sources provided by the applicant.

20 SRI LANKA SUSTAINABLE ENERGY AUTHORITY In Summary Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants Granting EP Effects of Delays PPA and Tariffs Cancelled PA and EP Cancelled PA and EP Application Identify site Mark on map Pre-feasibility study and report Proof of financial strength Grid connection point Application fee Omissions ? RegistrationR 1 xxxx x Number Consult CEB Site inspection Presentation 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 Reje ction Approval by line agencies Proceed to Grant Energy Permit EP 3 xxxx x Number Reapplication Feasibility Study Access to Land Resources Progress of Statutory Approvals Environmental Approval Auction Process Site inspection Presentation to Expert Committee PAC Meeting Provisional ApprovalPA 2 xxxx x Number Token Number Evaluation

21 SRI LANKA SUSTAINABLE ENERGY AUTHORITY In Summary Reapplications Granting PA Background Applying for PA Prefeasibility & Consultants Granting EP Effects of Delays PPA and Tariffs Cancelled PA and EP Cancelled PA and EP Registration of bidders Jun / Dec every year Project Proofing Project Brief Return Bid Bonds to Unsuccessful Bidders Invitation of Bids Deregister Resource Site Cancelled Resource Sites Land Acquisition Statutory Approvals Grid 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

22 Thank You! Call us on: us to: Visit us at:www.energy.gov.lk Drop in at:3G 17, BMICH, Bauddhaloka Mawatha Colombo 00700, Sri Lanka


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