Experience in Conducive RE & EC Policies for      Project Implementation from Various                   Countries         ...
Annual Power and Energy OutlookAgenda• Top 10 Global Energy Trends for 2020• Global and Asia Pacific Renewable Energy Tren...
Annual Power and Energy OutlookTop 10 Energy Market Trends for the Decade    Power Demand                                C...
China Leads the World in terms of Renewable EnergyInvestmentsNew Investments in Renewable Energy 2007-2011                ...
Whilst wind and hydro will still be the leading technologies, the growth in solar will be dramaticOutlook for the Energy &...
Asia will lead in clean energy consumption by 2020         350.0                        Clean Energy Consumption by Region...
Global Policy PrimerRenewable Energy                                                             Applied in               ...
JAPAN – Policies and Regulations           Japan has introduced its FiT scheme effectove July 2012. Proposed rates for the...
MALAYSIA – Policies and Regulations               In April 2011, Malaysia adopted a system of Advanced Renewable  Advanced...
MALAYSIA – Growth Forecasts     SOLAR FORECAST                 BIOGAS FORECAST    BIOMASS FORECAST      Feed-in Tariff Rat...
CHINA – Policies and Regulations                             Feed in Tariff                   Golden Sun                  ...
CHINA – Policies and RegulationsFeed in Tariff • First nationwide feed-in tariff incentive scheme for photovoltaic (PV) so...
China Market Forecasts                         13
China Market Forecasts                         14
INDIA - Policies and Regulations                                                       IndiaNational Solar MissionThe Nati...
INDIA - Policies and RegulationsNational Tariff Policy, 2006Grid-interactive renewable power projects based on wind power,...
India Energy Demand to Grow to 429 GW by 2020;Renewables to account for 72 GW                                             ...
THAILAND – Policies and Regulations       What are Adders?                                 Incentive Programs             ...
South Africa - Policies and Regulations                                                      South AfricaSouth Africas (SA...
GERMANY          Source: Deutsche Bank Group                                        20
Germany - Policies and Regulations                                                 GermanyThe German parliament passed the...
Germany - Policies and Regulations• The amended Renewable Energy Sources Act (EEG) entered into force in January 2009, inc...
USA - Policies and Regulations                                                    USA• The country does not have a nationa...
USA - Policies and Regulations•· Eliminate the $2,000 monetary cap for residential solar electric installations, creating ...
Indonesia Per Capita Electricity Consumption – Way to Go!The power consumption per capita is the lowest in the region desp...
Indonesia - Geothermal dominates RE sourced power electricity production and will continue doing so up to 2016            ...
Indonesia - Implications for Market Participants    Java Bali                        The interconnection will drive more e...
Summary of Opportunities for Indonesia    Potential investment for power1   generation is about US$33.5 billion by    2017...
Q&ARavi Krishnaswamykravi@frost.com                          29
Upcoming SlideShare
Loading in …5
×

Experience in Conducive RE & EC policies for project implementation from various countries.f&s.ravi.july172012

1,405 views

Published on

Frost & Sullivan's analysis on Conducive RE & EC for Project Implementation from Various Countries delivered by Ravi K, Vice President for Energy Practice - Asia Pacific, at EBTKE CONEX 2012 in Jakarta - Indonesia, July 17th, 2012.

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,405
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
11
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Experience in Conducive RE & EC policies for project implementation from various countries.f&s.ravi.july172012

  1. 1. Experience in Conducive RE & EC Policies for Project Implementation from Various Countries EBTKE CONEX 2012 INDONESIA 17TH JULY 2012RAVI KRISHNASWAMYVICE PRESIDENTENERGY PRACTICEFROST & SULLIVAN
  2. 2. Annual Power and Energy OutlookAgenda• Top 10 Global Energy Trends for 2020• Global and Asia Pacific Renewable Energy Trends• Global Policy Primer• Policy and Regulations in various countries including Malaysia, Thailand, India and China• Status and Outlook for Indonesia 2
  3. 3. Annual Power and Energy OutlookTop 10 Energy Market Trends for the Decade Power Demand Continued Growth Investment in Renewables New Age for The 10 Most Energy Natural Gas Efficiency Critical Trends that Will Clean Coal Shape the Energy Storage Commercial- isation Global Power & Energy Power Plant Industry till Market Decommissioning 2020 Liberalisation Smart Energy Nuclear Power? Source: Frost & Sullivan 3
  4. 4. China Leads the World in terms of Renewable EnergyInvestmentsNew Investments in Renewable Energy 2007-2011 • Global investment in renewable energy increased 17% in 2011 to $257 billion, which is 94% higher than 120 the pre-crisis levels in 2007 100 • China was still the market leader in 2011 with US$52.2 80 billion investments even 60 20… though US closed the gap 40 20… at US$50.8 billion 20… 20 • India was the fastest 20… 0 20… growing market at 62% year USA Rest of Europe MEA India China on year 2011, with a total Americas Rest of Asia investment of US$12 billion 2007 2008 2009 2010 2011 Source: UNEP 4
  5. 5. Whilst wind and hydro will still be the leading technologies, the growth in solar will be dramaticOutlook for the Energy & Power Industry: Evolution of Renewable Installed Capacity (World), 2009 and 2015 North America Europe Asia Pacific Rest of the World 2009 2015 2009 2015 2009 2015 2009 2015Wind 127 153 198 34 73 37 12Power, GW 2Solar Power(PV + CSP), 2 15 13 80 3 23 2 10GWBiomassPower, GW 9 11 16 21 10 15 18 25LargeHydropower, 171 174 178 190 237 308 299 329GWNote: The graph is illustrative and is not drawn to scale.*- Islandsbanki estimates based on data by IGA, Bertani, GEA^- Geothermal Energy Association**- Frost & Sullivan estimates Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan 5
  6. 6. Asia will lead in clean energy consumption by 2020 350.0 Clean Energy Consumption by Region Asia Pacific 300.0 250.0 Europe 200.0 MTOE 150.0 NA 100.0 50.0 Africa LA ME 0.0 1990 1995 2000 2005 2010 2015 2020 2025 2030 Source: BP Statistical Review of World Energy 6
  7. 7. Global Policy PrimerRenewable Energy Applied in Incentive ProvidedFinancial Incentives Europe Asia USACapital cost rebates Provide money to customers based on Italy Taiwan, California the size of a customer‟s solar power China systemFeed-in tariffs Utilities to pay customers for solar Germany, Japan, California power system generation based on France, South (Performance kilowatt hours produced, at a rate Italy, Korea, Based generally guaranteed for a period of Spain, UK China, Incentives), time. Malaysia HawaiiTax credits USANet metering Power generated by the solar power Thailand California, system in excess of a consumer‟s Oregon power consumption will spin the existing home or business electricity meter backwards by such excess amount, effectively reducing the customer‟s electricity bill. Source: Frost & Sullivan analysis. 7
  8. 8. JAPAN – Policies and Regulations Japan has introduced its FiT scheme effectove July 2012. Proposed rates for the program are $0.53/kWh (JPY 40/kWh) for PV plants larger than 10 kW, and $0.52/kWh (JPY 42/kWh)Feed-in for residential PV plants smaller than 10 kW. PV plants larger than 10 kW would be eligibleTariff for 20-year contracts, and smaller than 10 kW would be eligible for 10-year contracts, with the FIT paid for excess power production in smaller systems Renewables Portfolio Standards is a special measures law on the Use of New Energy by Electric Utilities. Introduced in April 2003, this law obliges electric utilities to use a RPS fixed amount of new energy toward the aim of promoting the introduction of new energies. Utilization target (electricity to be produced from new energy) was established for the fiscal year 2014 at 16.00 billion kWh. The country has set a target to improve EE by 30.0 percent relative to 2003 levels by 2030. EE To achieve this, the government offers diverse incentive mechanisms for both the industrial and commercial sector through the National Energy Plan, Government Direct Transfers,Policies financial incentives, and voluntary measures. 8
  9. 9. MALAYSIA – Policies and Regulations In April 2011, Malaysia adopted a system of Advanced Renewable Advanced Tariffs and renewable energy targets differentiated by technology by year on a first come basis. For instance, 2011 Malaysias quota for Renewable solar PV is 29 MW and in 2012 the target is an additional 46 MW. A Tariffs lot of interest is shown for Solar PV and biomass projects in Malaysia. • Pioneer Status - Tax exemption of 100.0 percent of statutory income for 10 years. Renewable • Investment Tax Allowance (ITA) -ITA of 100.0 per cent on the Energy qualifying capital expenditure within a period of five years Incentives • Import duty and sales tax exemption are provided for equipment used in such RE activities. For locally produced equipment, sales tax exemptions are given. Green Technology Financing Scheme (GTFS) is a fund amounting to RM1.5 billion set up as an effort to improve the supply and utilization of Green Technology in Malaysia. The scheme is managed by GTFS Malaysian Green Technology Corporation (MGTC) and aims to benefit companies who are producers and users of green technology. 9
  10. 10. MALAYSIA – Growth Forecasts SOLAR FORECAST BIOGAS FORECAST BIOMASS FORECAST Feed-in Tariff Rates RM 1.23 (US cents 40.5)/kWh for solar (up to 4 kW); RM 0.31 (US cents 10.2)/kWh for biomass (up to 10 MW); RM 0.32 (US cents 10.5)/kWh for biogas (up to 4 MW). Tariffs reduce for higher capacity 10
  11. 11. CHINA – Policies and Regulations Feed in Tariff Golden Sun 11
  12. 12. CHINA – Policies and RegulationsFeed in Tariff • First nationwide feed-in tariff incentive scheme for photovoltaic (PV) solar installations introduced in Aug 2011 • Solar PV projects approved before 1 July 2011 or completed by the end of 2011 will receive 1.15 yuan per kilowatt hour • Those approved after the above date will be paid 1 yuan per kilowatt-hour • China has set a new target of 21 GW of solar installations by 2015Golden Sun Program •In July 2009, the PRC Ministry of Finance announced the Golden Sun Program to support the demonstration and application of the PV industry in China. •Under this program, on-grid PV systems will be subsidized at 50.0% of total investment costs while off-grid PV systems installed in remote regions with no access to grid will be subsidized at 70.0% of total investment costs. However the government has been making changes to the program to make it viable based on current market conditions •The tariffs will be reduced to 5.5 yuan ($0.87) a watt, down from the 7 yuan set in February, because of the huge drop in module prices •Developments under this year‟s (2012) programme had to be a minimum size of 2MW compared with 300kW in previous years •The government has approved 1.7GW of solar projects, well above 600MW approved in 2011 12
  13. 13. China Market Forecasts 13
  14. 14. China Market Forecasts 14
  15. 15. INDIA - Policies and Regulations IndiaNational Solar MissionThe National Solar Mission (NSM) under India‟s National Action Plan (NAP) for climate change aims tomake the country a leader in the field of solar energy. The targets or outlays, according to the plan, are inthree phases:•Phase one: 2009 – 2012•Phase two: 2012 – 2017•Phase three: 2017 – 2022 Primary Goals Application Funding Requirements till 2030 Increase installed solar power • Utility scale grid connected ground • Incentive for 18,000 MW of solar power capacity to 20 GW by 2022, 100 mounted systems – 12,000 MW. – INR 819,830 million. GW by 2030 and 200 GW by • Off-grid, on-grid building mounted – • Grant for demo projects – INR 45,000 2050. 3,000 MW. million. Increase solar PV domestic • Off-grid rural and industrial – 5,000 • Grant for R&D and R&D capacity production to 4 GW – 5 GW per MW. building – INR 48,000 million. year by 2020. • Solar lighting for 20 million • Grant for rural electrification/ solar Achieve grid parity by 2022 households and 20 million square lighting – INR 12,000 million. Achieve parity with coal-based meter for solar heating applications power in 2030. 15
  16. 16. INDIA - Policies and RegulationsNational Tariff Policy, 2006Grid-interactive renewable power projects based on wind power, biomass, small hydro and solar are mainlyprivate investment driven, with favourable tariff policy regimes established by State Electricity RegulatoryCommissions (SERC), and almost all-renewable power capacity addition during the year has come throughthis route.State Electricity Regulatory Commissions (SERCs) to fix minimum percentage for purchase of energy fromrenewable energy sources taking into account availability of such resources in the region and its impact onretail tariffs.Rural Electrification Policy, 2006The policy recognized that non-conventional energy sources can be appropriately and optimally utilized tomake reliable supply of electricity to each and every household.State PoliciesSeveral states in India have RE policies that focuses either on one renewable energy technology or acombination of RE technologies and these are revised on a periodical basis. 16
  17. 17. India Energy Demand to Grow to 429 GW by 2020;Renewables to account for 72 GW 17
  18. 18. THAILAND – Policies and Regulations What are Adders? Incentive Programs • Very Small Power Producers (VSPP) regulations: for generatorsThailand market offers tariffs that sized less than or equal to 10 MW • Small Power Producers (SPP)are called „adders‟ that are paid regulations: for generators sizedover the retail price of the greater than 10 MW and less thanelectricity. The eligible 90 MWparticipants enter into long-termcontracts with the local utility to ADDERS The existing adder for solar insell renewable electricity at a Thailand is $0.3 per Kilowatt hourpre-specified tariff for a pre- (kWh) (8.0 baht/kWh) for 10 years.specified period of time. The However, currently, the government is contemplating on introducing aprogram is implemented through new conservative FiT with an adderThailand‟s three electric utilities: of $0.2/kWh (5.94 Baht/kWh) for 20EGAT, MEA, and PEA. years. It is estimated that this new tariff would be effective for a number of new application proposals. 18
  19. 19. South Africa - Policies and Regulations South AfricaSouth Africas (SA) National Energy Regulator (NERSA) introduced Renewable Energy Feed-In Tariffs(REFITs) in 2009. SA aimed to produce 10 TWh of electricity per year by 2013. However, in 2012, a newREFIT was introduced with significant cuts. The tariffs for all technologies are proposed to be reduced,and in some cases the reduction is more than 40 per cent (landfill gas and photovoltaic). 2009 REFIT and 2011 Revised REFIT with project consumer price index adjustments for years 2012-13 for solar PV: REFIT REFIT REFIT REFIT Percentage change 2009 2011 2012 2013 2011/20091 Technology R/kWh R/kWh R/kWh R/kWh Photovoltaic ≥ 1 MW 3.94 2.311 2.325 2.338 -41.3% ground mountedAlthough this project is large and shows initiative within South Africa to harvest the great amount of sunenergy it receives, it is actually the first major solar project in this country. Up until recently solar energyhad been neglected as the economy uses coal to generate 90% of its power.South Africa is therefore waiting for the technology to advance to the stage where the price of PVequipment, installation and purchase is much lower, and the price of coal is much higher. This will makesolar electricity a much more attractive proposition in the country in comparison to coal. 19
  20. 20. GERMANY Source: Deutsche Bank Group 20
  21. 21. Germany - Policies and Regulations GermanyThe German parliament passed the bill for revised solar feed-in-tariff (FIT) at the end of March 2012.The policy went into effect on April 1, 2012. Decrease %age FIT 2012 (EUR/kWh) Rooftop solar PV Systems Less than 10 kW 20% 0.195 10 kW to 1 MW 25-30% 0.165 Above 1 MW 0.135 Ground-Mounted Systems 0.135• From May-October 2012, FITs for all systems will be reduced by 1% every month.• The new policy includes limits to the FITs. For systems smaller than 10kW, only 80% of the electricity generated can obtain subsidies. For systems larger than 10kW and smaller than 1MW, only 90% of electricity generated can be eligible for subsidies. All electricity generated by systems larger than 1MW is eligible for subsidies.• The policy indicates that the target for new installations in 2012-2013 is 2.5-3.5GW. After 2013, the targets for new installations are to fall by 400MW every year. By 2017, the annual new installation target is 900-1,900MW. 21
  22. 22. Germany - Policies and Regulations• The amended Renewable Energy Sources Act (EEG) entered into force in January 2009, including an increased initial tariff for onshore wind energy - EUR 9.2 cent/kWh (USD 12.5 cent), up from 8.7 cent/kWh. The basic tariff was set at 5.02 cent/kWh. There is an annual digression of 1% for new installations. Hence, since 1 January 2010, the initial tariff for onshore wind was 9.02 cent/ kWh.• The tariff for offshore wind energy was increased to 13 cent/ kWh, plus an additional “sprinter bonus” of 2 cents/kWh for projects which start operation before the end of 2015. The initial 15 cents/kWh will be paid for a period of 12 years, and then decreased to 3.5 cent/kWh. There is an additional prolongation if the offshore site is located in deep waters and at a large distance from the coast. Offshore tariffs will annually decrease by 5% for new installations starting in 2015• The new government announced that it will shorten the periods between EEG amendments from four to three years, and a new amendment is now expected in 2012. 22
  23. 23. USA - Policies and Regulations USA• The country does not have a national feed-in-tariff (FiT) policy for renewable energy but has state-wise renewable portfolio standards and other state specific programs.Renewable Portfolio Standards (RPS)State-level renewable portfolio standards (RPS) mandate utilities to generate a certain percentage of theirelectricity generation from RE sources by a certain time period. Currently, 29 states have an RPS in placeand 6 additional states have non-binding state level renewable portfolio goals. Some states have a solar“carve-out” that requires a certain percentage of a utility‟s generation is derived from solar power. RPSpolicy designs vary significantly among the states. RPS allows flexibility to choose whichever RE sourcesare most appropriate for their states.11 states undertook several modifications to their RPS programs in 2007 mainly to strengthen pre-existing RPS requirements by increasing RE targets, removing supplier exemptions, or adding resource–specific set asides. RPS is the major driver for utility scale solar power plants in the USA.Investment Tax Credit (ITC)The solar tax credits were originally enacted in 2005. In Oct 2008, the ITC for solar got an extension for a8-year period till the end of 2016, providing a medium-term deadline to invest. The 30.0 percent tax crediton the capital cost of a PV project installation applies to both residential and commercial solarinstallations. The solar ITC provisions will - 23
  24. 24. USA - Policies and Regulations•· Eliminate the $2,000 monetary cap for residential solar electric installations, creating a true 30-percenttax credit (effective for property placed in service after December 31, 2008);•· Eliminate the prohibition on utilities from benefiting from the credit;•·Allow Alternative Minimum Tax (AMT) filers, both businesses and individuals, to take the credit;•·Authorize $800 million for clean energy bonds for renewable energy generating facilities, including solar.California Solar Initiative (CSI)• The CSI program has a total budget of $2.167 billion between 2007 and 2016 and a goal to install approximately 1,940 MW of new solar generation capacity.• The CSI-Thermal portion of the program has a total budget of $250 million between 2010 and 2017, and a goal to install 200,000 new solar hot water systems.• The CSI program is funded by electric ratepayers and the CSI-Thermal portion of the program is funded by gas ratepayers. The CSI program is overseen by the California Public Utilities Commission and rebates are offered through the Program Administrators. 24
  25. 25. Indonesia Per Capita Electricity Consumption – Way to Go!The power consumption per capita is the lowest in the region despite the abundantnatural resources present 14000 12000 10000 8000 kWh per capita 6000 4000 2000 0 Indonesia Vietnam Philippines Thailand Malaysia Singapore India China USA Source: World Bank 25
  26. 26. Indonesia - Geothermal dominates RE sourced power electricity production and will continue doing so up to 2016 Electricity Generation Mix Using Renewable Energy: Total Installed Capacity (MW) • Geothermal usage is100%= 1537 1728 1932 2390 2608 2914 3256 Solar expected to increase and Wind would become the 1% 1% 1% 1% 2% 1% 2% 1% 2% 1% 2% Biogas 12% 12% 14% Indonesia‟s largest 13% 15% 16% 17% Biomass renewable energy electricity 9% 11% source that connected to 12% 12% 13% the main grid 15% 16% Co- • Biomass and cogeneration generationl is in second and third place providing significant electricity renewable energy source to Indonesian main 78% grid 76% 72% 72% 69% • Wind ,Solar and Biogas is 65% 62% not yet connected to main grid and each capacity is Geothermal below 2 % of total national RE capacity as it is in early stage of development. 2010 2011 2012 2013 2014 2015 2016 Source: Frost & Sullivan 26
  27. 27. Indonesia - Implications for Market Participants Java Bali The interconnection will drive more efficiency into the system and help to better Sumatra manage the discrepancies in demand supply with the anticipated growthinterconnection Geothermal With average project cost at $2.4 to $3.2 per MW, which is lower than the power international costs, Indonesia can attract significant investments with more favorable development government policy support Disbursed Since it is impossible to extend the grid to all far flung regions of Indonesia, small Renewables scale off grid renewable energy generation should form a key part of Indonesian policy Other Other regional markets like Vietnam and now Myanmar are vying for international Regional financing in power sector. Without more liberalization of the power sector Indonesia risks Markets loosing out to other countries. 27
  28. 28. Summary of Opportunities for Indonesia Potential investment for power1 generation is about US$33.5 billion by 2017 Capital expenditure on T&D expansion2 about US$11.1 billion Increasing bilateral cooperation for3 renewable energy development (i.e. Finland and New Zealand) With a 30% renewable energy objective by 2030, the medium term4 opportunity us about US$12.4 billion by 2020 Country investment rating upgrades5 generating more interest among global investors Source: Frost & Sullivan analysis. 28
  29. 29. Q&ARavi Krishnaswamykravi@frost.com 29

×